CHORDIANT SOFTWARE, INC.

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is entered into as of
August 16, 2000, by and between IMPERIAL BANK ("Bank") and CHORDIANT SOFTWARE,
INC., formerly known as J. FRANK CONSULTING, INC. ("Borrower").

RECITALS

Bank and Borrower are parties to that certain Security and Loan Agreement
(Accounts Receivable) dated September 10, 1996, as amended from time to time
(the "Original Agreement"). Borrower and Bank wish to amend and restate the
terms of the Original Agreement. 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:

DEFINITIONS AND CONSTRUCTION
.
Definitions
. As used in this Agreement, the following terms shall have the following
definitions:

"Accounts" means all presently existing and hereafter arising accounts, contract
rights, 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, whether or not
earned by performance, and any and all credit insurance, guaranties, and other
security therefor, as well as all merchandise returned to or reclaimed by
Borrower and Borrower's Books relating to any of the foregoing.

"Advance" or "Advances" means a cash advance or cash advances under the
Revolving Facility.

"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: reasonable costs or expenses (including reasonable
attorneys' fees and expenses) incurred in connection with the preparation,
negotiation, administration, and enforcement of the Loan Documents; reasonable
Collateral audit fees; and Bank's reasonable attorneys' fees and expenses
incurred in amending, enforcing or defending the Loan Documents (including fees
and expenses of appeal), incurred before, during and after an Insolvency
Proceeding, whether or not suit is brought.

"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 eighty percent (80%) of Eligible
Accounts, as determined by Bank with reference to the most recent Borrowing Base
Certificate delivered by Borrower.

"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.

"Change in Control" shall mean a transaction 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, 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.

"Closing Date" means the date of this Agreement.

"Code" means the California Uniform Commercial Code.

"Collateral" means the property described on Exhibit A attached hereto.

"Committed Revolving Line" means a credit extension of up to Eleven Million Five
Hundred Thousand Dollars ($11,500,000).

"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 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
designated 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 Extension" means each Advance, Equipment Advance, Term Advance, Letter
of Credit or any other extension of credit by Bank for the benefit of Borrower
hereunder.

"Current Assets" means, as of any applicable date, all amounts that should, in
accordance with GAAP, be included as current assets on the consolidated balance
sheet of Borrower and its Subsidiaries as at such date.

"Current Liabilities" means, as of any applicable date, all amounts that should,
in accordance with GAAP, be included as current liabilities on the consolidated
balance sheet of Borrower and its Subsidiaries, as at such date, plus, to the
extent not already included therein, all outstanding Credit Extensions made
under this Agreement, including all Indebtedness that is payable upon demand or
within one year from the date of determination thereof unless such Indebtedness
is renewable or extendible at the option of Borrower or any Subsidiary to a date
more than one year from the date of determination.

"Daily Balance" means the amount of the Obligations owed at the end of a given
day.

"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 5.4, including, but not limited to,
maintenance revenue subject to a renewal rate of at least eighty-five percent
(85%) and certified on a quarterly basis; provided, that standards of
eligibility may be fixed and revised from time to time by Bank as a consequence
of any Collateral audits done pursuant to Section 6.3 in Bank's reasonable
judgment and upon notification thereof to Borrower in accordance with the
provisions hereof. Unless otherwise agreed to by Bank, Eligible Accounts shall
not include the following:

 a.  Accounts that the account debtor has failed to pay within ninety (90) days
     of invoice date;
 b.  Accounts with respect to an account debtor, twenty-five percent (25%) of
     whose Accounts the account debtor has failed to pay within ninety (90) days
     of invoice date;
 c.  Accounts with respect to which the account debtor is an officer, employee,
     or agent of Borrower;
 d.  Accounts with respect to which goods are placed on consignment, guaranteed
     sale, sale or return, sale on approval, bill and hold, or other terms by
     reason of which the payment by the account debtor may be conditional;
 e.  Accounts with respect to which the account debtor is an Affiliate of
     Borrower;
 f.  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;
 g.  Accounts with respect to which the account debtor is the United States or
     any department, agency, or instrumentality of the United States;
 h.  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;
 i.  Accounts with respect to an account debtor, including Subsidiaries and
     Affiliates, whose total obligations to Borrower exceed twenty-five percent
     (25%) of all Accounts, to the extent such obligations exceed the
     aforementioned percentage, except as approved in writing by Bank;
 j.  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; and
 k.  Accounts the collection of which Bank reasonably determines to be doubtful.
     
     "Eligible Foreign Accounts" means Accounts with respect to which the
     account debtor does not have its principal place of business in the United
     States and that (i) are supported by one or more letters of credit in an
     amount and of a tenor, and issued by a financial institution, acceptable to
     Bank, or (ii) that Bank approves on a case-by-case basis.
     
     "Equipment" means all present and future machinery, equipment, tenant
     improvements, furniture, fixtures, vehicles, tools, parts and attachments
     in which Borrower has any interest.
     
     "Equipment Advance" has the meaning set forth in Section 2.1(b).
     
     "Equipment Line" means a credit extension of up to Two Million Dollars
     ($2,000,000).
     
     "Equipment Maturity Date" means June 30, 2003.
     
     "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.
     
     "GAAP" means generally accepted accounting principles as in effect from
     time to time.
     
     "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 and
     (d) all Contingent Obligations.
     
     "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 Collateral" means all of Borrower's right, title,
     and interest in and to the following:

 l.  Copyrights, Trademarks and Patents;
 m.  Any and all trade secrets, and any and all intellectual property rights in
     computer software and computer software products now or hereafter existing,
     created, acquired or held;
 n.  Any and all design rights which may be available to Borrower now or
     hereafter existing, created, acquired or held;
 o.  Any and all claims for damages by way of past, present and future
     infringement of any of the rights included above, with the right, but not
     the obligation, to sue for and collect such damages for said use or
     infringement of the intellectual property rights identified above;
 p.  All licenses or other rights to use any of the Copyrights, Patents or
     Trademarks, and all license fees and royalties arising from such use to the
     extent permitted by such license or rights;
 q.  All amendments, renewals and extensions of any of the Copyrights,
     Trademarks or Patents; and
 r.  All proceeds and products of the foregoing, including without limitation
     all payments under insurance or any indemnity or warranty payable in
     respect of any of the foregoing.
     
     "Interest Period" means for each LIBOR Rate Advance, a period of
     approximately one, two, three or six months as Borrower may elect, provided
     that the last day of an Interest Period for a LIBOR Rate Advance shall be
     determined in accordance with the practices, of the LIBOR interbank market
     as from time to time in effect, provided, further, in all cases such period
     shall expire not later than the applicable Revolving Maturity Date.
     
     "Inventory" means all present and future inventory in which Borrower has
     any interest, including merchandise, raw materials, parts, supplies,
     packing and shipping materials, work in process and finished products
     intended for sale or lease or to be furnished under a contract of service,
     of every kind and description now or at any time hereafter owned by or in
     the custody or possession, actual or constructive, of Borrower, including
     such inventory as is temporarily out of its custody or possession or in
     transit and including any returns upon any accounts or other proceeds,
     including insurance proceeds, resulting from the sale or disposition of any
     of the foregoing and any documents of title representing any of the above,
     and Borrower's Books relating to any of the foregoing.
     
     "Investment" means any beneficial ownership of (including stock,
     partnership 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.
     
     "LIBOR Base Rate" means, for any Interest Period for a LIBOR Rate Advance,
     the rate of interest per annum determined by Bank to be the per annum rate
     of interest at which deposits in United States Dollars are offered to Bank
     in the London interbank market in which Bank customarily participates at
     11:00 a.m. (local time in such interbank market) three (3) Business Days
     before the first day of such Interest Period for a period approximately
     equal to such Interest Period and in an amount approximately equal to the
     amount of such Advance.
     
     "LIBOR Rate" shall mean, for any Interest Period for a LIBOR Rate Advance,
     a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%)
     equal to (i) the LIBOR Base Rate for such Interest Period divided by (ii) 1
     minus the Reserve Requirement for such Interest Period.
     
     "LIBOR Rate Advances" means any Advances made or a portion thereof on which
     interest is payable based on the LIBOR Rate in accordance with the terms
     thereof.
     
     "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 agreement entered into between Borrower
     and Bank in connection with this Agreement, all as amended or extended from
     time to time.
     
     "Material Adverse Effect" means a material adverse effect on (i) the
     business operations or condition (financial or otherwise) of Borrower and
     its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay
     the Obligations or otherwise perform its obligations under the Loan
     Documents.
     
     "Negotiable Collateral" means all of Borrower's present and future letters
     of credit of which it is a beneficiary, notes, drafts, instruments,
     securities, documents of title, and chattel paper, and Borrower's Books
     relating to any of the foregoing.
     
     "New Equity" means the receipt by Borrower of cash proceeds from the sale
     or issuance of its equity securities to investors or Subordinated Debt.
     
     "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:

 s.  Indebtedness of Borrower in favor of Bank arising under this Agreement or
     any other Loan Document;
 t.  Indebtedness existing on the Closing Date and disclosed in the Schedule;
 u.  Indebtedness 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; and
 v.  Subordinated Debt.
     
     "Permitted Investment" means:

 w.  Investments existing on the Closing Date disclosed in the Schedule; and
 x.  (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 Corporation or Moody's Investors Service, (iii) certificates of
     deposit maturing no more than one (1) year from the date of investment
     therein issued by Bank and (iv) Bank's money market accounts.
     
     "Permitted Liens" means the following:

 y.  Any Liens existing on the Closing Date and disclosed in the Schedule or
     arising under this Agreement or the other Loan Documents;
 z.  Liens for taxes, fees, assessments or other governmental charges or levies,
     either not delinquent or being contested in good faith by appropriate
     proceedings, provided the same have no priority over any of Bank's security
     interests;
 aa. Liens (i) upon or in any equipment 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
     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;
 ab. 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.

"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.

"Prime Rate" means the variable rate of interest, per annum, most recently
announced by Bank, as its "prime rate," whether or not such announced rate is
the lowest rate available from Bank.

"Quick Assets" means, at any date as of which the amount thereof shall be
determined, the unrestricted cash and cash-equivalents, accounts receivable and
investments with maturities not to exceed 90 days, of Borrower determined in
accordance with GAAP.

"Reserve Requirement" means, for any Interest Period, the average maximum rate
at which reserves (including any marginal, supplemental or emergency reserves)
are required to be maintained during such Interest Period under Regulation D
against "Eurocurrency liabilities" (as such term is used in Regulation D) by
member banks of the Federal Reserve System. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves required to
be maintained by Bank by reason of any regulatory change against (i) any
category of liabilities which includes deposits by reference to which the LIBOR
Rate is to be determined as provided in the definition of "LIBOR Base Rate" or
(ii) any category of extensions of credit or other assets which include
Advances.

"Responsible Officer" means each of the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer and the Controller of Borrower.

"Revolving Facility" means the facility under which Borrower may request Bank to
issue Advances, as specified in Section 2.1(a) hereof.

"Revolving Maturity Date" means the day immediately preceding the first
anniversary of the Closing Date.

"Schedule" means the schedule of exceptions attached hereto, if any.

"Subordinated Debt" means any debt incurred by Borrower that is subordinated 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, company or partnership in which (i) any
general partnership interest or (ii) more than 50% of the stock or other units
of ownership which by the terms thereof has the 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.

"Tangible Net Worth" means at any date as of which the amount thereof shall be
determined, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficit) of Borrower and its
Subsidiaries minus Total Liabilities and intangible assets, plus Subordinated
Debt, on a consolidated basis determined in accordance with GAAP.

"Total Liabilities" means at any date as of which the amount thereof shall be
determined, all obligations that should, in accordance with GAAP be classified
as liabilities on the consolidated balance sheet of Borrower, including in any
event all Indebtedness.

"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. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP and all
calculations made hereunder shall be made in accordance with GAAP. When used
herein, the terms "financial statements" shall include the notes and schedules
thereto.

LOAN AND TERMS OF PAYMENT
.
 1. Credit Extensions.
    
    Borrower promises to pay to the order of Bank, in lawful money of the United
    States of America, the aggregate unpaid principal amount of all Credit
    Extensions made by Bank to Borrower hereunder. Borrower shall also pay
    interest on the unpaid principal amount of such Credit Extensions at rates
    in accordance with the terms hereof.
    
    a. Revolving Advances.
       i.  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 (i) the Committed Revolving Line or (ii) the
           Borrowing Base minus the aggregate face amount of all outstanding
           Letters of Credit and availability used under the Committed Revolving
           Line for FX Forward Contracts; provided, however, that Borrower may
           request Advances in an aggregate outstanding amount of Three Million
           Dollars ($3,000,000) without regard to the Borrowing Base; provided
           further that once outstanding Advances, including the face amount of
           all outstanding Letters of Credit and availability used under the
           Committed Revolving Line for FX Forward Contracts, exceed Three
           Million Dollars ($3,000,000), then all outstanding and future Credit
           Extensions under the Committed Revolving Line shall be subject to the
           Borrowing Base. Subject to the terms and conditions of this
           Agreement, amounts borrowed pursuant to this Section 2.1(a) may be
           repaid and reborrowed at any time prior to the Revolving Maturity
           Date, at which time all Advances under this Section 2.1(a) shall be
           immediately due and payable. Borrower may prepay any Advances without
           penalty or premium.
       ii. Whenever Borrower desires an Advance, Borrower will notify Bank by
           facsimile transmission or telephone no later than 3:00 p.m. Pacific
           time, 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 B hereto. 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 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(a) to Borrower's deposit account.
    b. Equipment Advances.
       i.   Subject to and upon the terms and conditions of this Agreement, at
            any time from the date hereof through the Revolving Maturity Date,
            Bank agrees to make advances (each an "Equipment Advance" and,
            collectively, the "Equipment Advances") to Borrower in an aggregate
            outstanding amount not to exceed the Equipment Line provided that
            the aggregate amount of all Equipment Advances for software shall
            not exceed the lesser of (A) thirty percent (30%) of the aggregate
            amount of the outstanding Equipment Advances, or (B) Five Hundred
            Thousand Dollars ($500,000). Each Equipment Advance shall not exceed
            one hundred percent (100%) of the invoice amount of equipment,
            furniture, software license and corporate purposes approved by Bank
            from time to time (which Borrower shall, in any case, have purchased
            within 90 days of the date of the corresponding Equipment Advance),
            excluding taxes, shipping, warranty charges, freight discounts, soft
            costs, and installation expense, provided that the initial Equipment
            Advance (which must be requested by Borrower on or before September
            15, 2000) shall not exceed one hundred percent (100%) of the invoice
            amount of equipment, furniture, software license and corporate
            purposes approved by Bank from time to time (which Borrower shall,
            in any case, have purchased within 180 days of the date of the
            corresponding Equipment Advance), excluding taxes, shipping,
            warranty charges, freight discounts, soft costs, and installation
            expense.
       ii.  Interest shall accrue from the date of each Equipment Advance at the
            rate specified in Section 2.3(a), and shall be payable monthly on
            the fifteenth (15th) day of each month through August 15, 2003. Any
            Equipment Advances that are outstanding on September 15, 2000, shall
            be payable in thirty-five (35) equal monthly installments of
            principal, plus all accrued interest, beginning on September 15,
            2000, and continuing on the same day of each month thereafter
            through August 15, 2003. Any Equipment Advances that are outstanding
            on December 31, 2000 (which are not outstanding on September 15,
            2000) shall be payable in thirty (30) equal monthly installments of
            principal, plus all accrued interest, beginning on January 15, 2001,
            and continuing on the same day of each month thereafter through
            August 15, 2003. Any Equipment Advances that are outstanding on
            June 30, 2001 (which were not outstanding on September 15, 2000 or
            December 31, 2000) shall be payable in twenty-four (24) equal
            monthly installments of principal, plus all accrued interest,
            beginning on July 15, 2001, and continuing on the same day of each
            month thereafter through the Equipment Maturity Date, at which time
            all amounts due under this Section 2.1(b) and any other amounts due
            under this Agreement shall be immediately due and payable. Equipment
            Advances, once repaid, may not be reborrowed. Notwithstanding the
            foregoing, all Equipment Advances used for software license purposes
            must be requested by Borrower on or prior to June 30, 2001 and shall
            each be payable in twenty-four (24) equal monthly installments of
            principal, plus all accrued interest, but in any event shall be
            immediately due and payable no later than the Equipment Maturity
            Date. Borrower may prepay any Equipment Advances without penalty or
            premium.
       iii. When Borrower desires to obtain an Equipment Advance, Borrower shall
            notify Bank (which notice shall be irrevocable) by facsimile
            transmission to be received no later than 3:00 p.m. Pacific time one
            (1) Business Day before the day on which the Equipment Advance is to
            be made. Such notice shall be substantially in the form of
            Exhibit B. The notice shall be signed by a Responsible Officer or
            its designee and include a copy of the invoice for any Equipment to
            be financed.
    c. Letters of Credit
       i.  Subject to the terms and conditions of this Agreement, Bank agrees to
           issue or cause to be issued letters of credit for the account of
           Borrower (each, a "Letter of Credit" and collectively, the "Letters
           of Credit") in an aggregate outstanding face amount not to exceed
           Four Million Dollars ($4,000,000). 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 of
           standard application and letter of credit agreement, including any
           then-applicable fee. On any drawn but unreimbursed Letter of Credit,
           the unreimbursed amount shall be deemed an Advance under Section
           2.1(a).
       ii. The obligation of Borrower to immediately reimburse Bank for drawings
           made under Letters of Credit shall be absolute, unconditional and
           irrevocable, and shall be performed strictly in accordance with the
           terms of this Agreement and such Letters of Credit, under all
           circumstances whatsoever. Borrower shall indemnify, defend, protect,
           and hold Bank harmless from any loss, cost, expense or liability,
           including, without limitation, reasonable attorneys' fees, arising
           out of or in connection with any Letters of Credit, except for
           expenses caused by Bank's gross negligence or willful misconduct.
    d. Foreign Exchange Sublimit. If there is availability under the Committed
       Revolving Line, Borrower may enter in foreign exchange forward contracts
       with the Bank under which Borrower commits to purchase from or sell to
       Bank a set amount of foreign currency more than one business day after
       the contract date (the "FX Forward Contract"). Bank will subtract 10% of
       each outstanding FX Forward Contract from the foreign exchange sublimit
       which is a maximum of $2,500,000 (the "FX Sublimit"). Such subtracted
       amount shall be deducted from availability under the Committed Revolving
       Line for other Credit Extensions. The total FX Forward Contracts at any
       one time may not exceed 10 times the amount of the FX Sublimit. Bank may
       terminate the FX Forward Contracts if an Event of Default occurs.
    e. Term Advances. "Equipment Advances" in the aggregate principal amount of
       $1,310,663 were made to Borrower under the Original Agreement (which
       shall be referred to hereunder as the "Term Advances"). Borrower shall
       not request or receive any further Term Advances. Interest shall accrue
       on such Term Advances at the rate set forth in Section 2.3(a). All Term
       Advances shall continue to be paid on the terms set forth in the Original
       Agreement. All Term Advances under this Section 2.1(e) shall be
       immediately due and payable on or before January 21, 2002. Term Advances
       once repaid, may not be reborrowed. Borrower may prepay all Term Advances
       without penalty or premium.
 2. Overadvances. If the aggregate amount of the outstanding Advances exceeds
    the lesser of the Committed Revolving Line or the Borrowing Base at any
    time, Borrower shall immediately pay to Bank, in cash, the amount of such
    excess.
 3. Interest Rates, Payments, and Calculations.
    a. Interest Rates.
       Advances
       . Except as set forth in Section 2.3(b), the Advances shall bear
       interest, on the outstanding daily balance thereof, at a rate equal to
       the Prime Rate; provided, however, upon Borrower's election, Advances
       shall bear interest on the outstanding daily balance thereof, as provided
       in Section 2.5 below.
       
    b. Equipment Advances. Except as set forth in Section  2.3(b), the Equipment
       Advances shall bear interest, on the outstanding daily balance thereof,
       at a rate equal to the Prime Rate.
    c. Term Advances. Except as set forth in Section  2.3(b), the Term Advances
       shall bear interest, on the outstanding daily balance thereof, at a rate
       equal to one-quarter of one percent (0.25%) above the Prime Rate.
 4. Late Fee; Default Rate. If any payment is not made within ten (10) days
    after the date such payment is due, Borrower shall pay Bank a late fee equal
    to the lesser of (i) five percent (5%) of the amount of such unpaid amount
    or (ii) the maximum amount permitted to be charged under applicable law. All
    Obligations shall bear interest, from and after the occurrence and during
    the continuance of an Event of Default, at a rate equal to five (5)
    percentage points above the interest rate applicable immediately prior to
    the occurrence of the Event of Default.
 5. Payments. Interest hereunder shall be due and payable on the fifteenth
    (15th) calendar day of each month during the term hereof. 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 Committed
    Revolving Line, in which case 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.
 6. Computation. In the event the Prime Rate is changed from time to time
    hereafter, the applicable rate of interest hereunder shall be increased or
    decreased, effective as of the day the Prime Rate is changed, by an amount
    equal to such change in the Prime Rate. All interest chargeable under the
    Loan Documents shall be computed on the basis of a three hundred sixty (360)
    day year for the actual number of days elapsed.

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 of an Event of Default,
the receipt by Bank of any wire transfer of funds, check, or other item of
payment shall be immediately applied to conditionally reduce Obligations, but
shall not be considered a payment on account 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.
Libor/Prime Rate Advances
. Whenever Borrower desires an Advance, Borrower will notify Bank by facsimile
transmission or telephone no later than 11:00 a.m. Pacific time, on the Business
Day that a Prime Advance is to be made, and noon Pacific time on the Business
Day that is three (3) Business Days prior to the Business Day on which a LIBOR
Rate Advance is made. Each such notification shall be promptly confirmed by a
Payment/Advance Form in substantially the form of Exhibit B-2 hereto. Bank is
authorized to make Advances under this Agreement, based upon instructions
received from a Responsible Officer, or a designee of a Responsible Officer
designated in writing and signed by such 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 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 to
a Borrower's deposit account, as specified by such Borrower.

Each such notice shall specify:

 i.   the date such Advance is to be made, which shall be a Business Day;
 ii.  the amount of such Advance;
 iii. whether such Advance is to be a Prime Rate Advance or a LIBOR Rate
      Advance; and
 iv.  if the Advance is to be a LIBOR Rate Advance, the Interest Period for such
      Advance;

Each written request for an Advance, and each confirmation of a telephone
request for such an Advance, shall be in substantially the form of Exhibit B-2
hereto executed by Borrower.

Prime Rate Advances
. Each Prime Rate Advance shall be in an amount of not less than Twenty-Five
Thousand Dollars ($25,000). The outstanding principal balance of each Prime Rate
Advance shall bear interest until principal is due (computed daily on the basis
of a 360 day year and actual days elapsed), at a rate per annum equal to the
Prime Rate. Prime Rate Advances shall be payable as set forth in Section 2.3(c),
with the entire outstanding principal amount of all Prime Rate Advances due and
payable on the Revolving Maturity Date.
LIBOR Rate Advances
. Each LIBOR Rate Advance shall be in an amount of not less than Five Hundred
Thousand Dollars ($500,000). The outstanding principal balance of each LIBOR
Rate Advance shall bear interest until principal is due (computed daily on the
basis of a 360 day year and actual days elapsed) at a rate per annum equal to
the LIBOR Rate plus 250 basis points for such LIBOR Rate Advance. The entire
outstanding principal amount of each LIBOR Rate Advance shall be due and payable
on the earlier of (i) the last day of the LIBOR Rate Interest Period for such
LIBOR Rate Advance, and (ii) Revolving Maturity Date.
Prepayment of the Advances
. Borrower may at any time prepay any Prime Rate Advance or any LIBOR Rate
Advance, in full or in part. Each partial prepayment for a LIBOR Rate Advance
shall be in an amount not less than Twenty-Five Thousand Dollars ($25,000). Each
prepayment shall be made upon the irrevocable written or telephone notice of
Borrower received by Bank not later than 10:00 a.m. California time on the date
of the prepayment of a Prime Rate Advance, and not less than three (3) Business
Days prior to the date of the prepayment of a LIBOR Rate Advance. The notice of
prepayment shall specify the date of the prepayment, the amount of the
prepayment, and the Advance or Advances prepaid. Each prepayment of a LIBOR Rate
Advance shall be accompanied by the payment of accrued interest on the amount
prepaid and any amount required by Section 2.8.

Fees
. Borrower shall pay to Bank the following:
 a. Facility Fee.
    Committed Revolving Line
    . On the Closing Date, a Facility Fee equal to $15,000, which shall be
    non-refundable.
    
 b. Equipment Line. On the Closing Date, a Facility Fee equal to $4,000, which
    shall be non-refundable.

Bank Expenses
. On the Closing Date, all Bank Expenses incurred through the Closing Date,
including reasonable attorneys' fees and expenses and, after the Closing Date,
all Bank Expenses, including reasonable attorneys' fees and expenses, as and
when they become due.

Conversion/Continuation of Advances
.
 a. A Borrower may from time to time submit in writing a request that Prime Rate
    Advances be converted to LIBOR Rate Advances or that any existing LIBOR Rate
    Advances continue for an additional Interest Period. Such request shall
    specify the amount of the Prime Rate Advances which will constitute LIBOR
    Rate Advances (subject to the limits set forth below) and the Interest
    Period to be applicable to such LIBOR Rate Advances. Each written request
    for a conversion to a LIBOR Rate Advance or a continuation of a LIBOR Rate
    Advance shall be substantially in the form of a Libor Rate
    Conversion/Continuation Certificate as set forth on Exhibit B-3, which shall
    be duly executed by a Responsible Officer. Subject to the terms and
    conditions contained herein, three (3) Business Days after Bank's receipt of
    such a request from Borrower, such Prime Rate Advances shall be converted to
    LIBOR Rate Advances or such LIBOR Rate Advances shall continue, as the case
    may be provided that:
    i.   no Event of Default or event which with notice or passage of time or
         both would constitute an Event of Default exists;
    ii.  no party hereto shall have sent any notice of termination of the
         Agreement;
    iii. Borrower shall have complied with such customary procedures as Bank has
         established from time to time for Borrower's requests for LIBOR Rate
         Advances;
    iv.  the amount of a LIBOR Rate Advance shall be $500,000 or such greater
         amount which is an integral multiple of $50,000; and
    v.   Bank shall have determined that the Interest Period or LIBOR Rate is
         available to Bank as of the date of the request for such LIBOR Rate
         Advance (no more than four Interest Periods may be in effect at any one
         time under the Revolving Line).
    
    Any request by Borrower to convert Prime Rate Advances to LIBOR Rate
    Advances or continue any existing LIBOR Rate Advances shall be irrevocable.
    Notwithstanding anything to the contrary contained herein, Bank shall not be
    required to purchase United States Dollar deposits in the London interbank
    market or other applicable LIBOR Rate market to fund any LIBOR Rate
    Advances, but the provisions hereof shall be deemed to apply as if Bank had
    purchased such deposits to fund the LIBOR Rate Advances.

 b. Any LIBOR Rate Advances shall automatically convert to Prime Rate Advances
    upon the last day of the applicable Interest Period, unless Bank has
    received and approved a complete and proper request to continue such LIBOR
    Rate Advance at least three (3) Business Days prior to such last day in
    accordance with the terms hereof. Any LIBOR Rate Advances shall, at Bank's
    option, convert to Prime Rate Advances in the event that an Event of Default
    shall exist. Borrower shall pay to Bank, upon demand by Bank any amounts
    required to compensate Bank for any loss (including loss of anticipated
    profits), cost or expense incurred by such person, as a result of the
    conversion of LIBOR Rate Advances to Prime Rate Advances pursuant to any of
    the foregoing.

Additional Requirements/Provisions Regarding LIBOR Rate Advances
.
 a. If for any reason (including voluntary or mandatory prepayment or
    acceleration, other than under section 2.8(e), Bank receives all or part of
    the principal amount of a LIBOR Rate Advance prior to the last day of the
    Interest Period for such LIBOR Rate Advance, Borrower shall on demand by
    Bank, pay Bank the amount (if any) by which (i) the additional interest
    which would have been payable on the amount so received had it not been
    received until the last day of such Interest Period or term exceeds (ii) the
    interest which would have been recoverable by Bank by placing the amount so
    received on deposit in the certificate of deposit markets or the offshore
    currency interbank markets or United States Treasury investment products, as
    the case may be, for a period starting on the date on which it was so
    received and ending on the last day of such Interest Period or term at the
    interest rate determined by Bank. Bank's determination as to such amount
    shall be presumptive evidence of such additional costs and binding for all
    purposes if made reasonably and in good faith.
 b. Borrower shall pay to Bank, upon demand by Bank, from time to time such
    amounts as Bank may reasonably determine to be necessary to compensate it
    for any costs incurred by Bank that Bank determines are attributable to its
    making or maintaining of any amount receivable by Bank hereunder in respect
    of any Advances relating thereto (such increases in costs and reductions in
    amounts receivable being herein called "Additional Costs"), in each case
    resulting from any regulatory change that:
    i.   changes the basis of taxation of any amounts payable to Bank under this
         Agreement in respect of any Advances (other than changes which affect
         taxes measured by or imposed on the overall net income of Bank by the
         jurisdiction in which Bank has its principal office); or
    ii.  imposes or modifies any reserve, special deposit or similar
         requirements relating to any extensions of credit or other assets of,
         or any deposits with or other liabilities of Bank (including any
         Advances or any deposits referred to in the definition of "LIBOR Base
         Rate"); or
    iii. imposes any other material condition affecting this Agreement (or any
         of such extensions of credit or liabilities).
    
    Bank will notify Borrower of any event occurring after the date of the
    Agreement which will entitle Bank to compensation pursuant to this section
    as promptly as practicable after it obtains knowledge thereof and determines
    to request such compensation. Bank will furnish Borrower with a statement
    setting forth the basis and amount of each request by Bank for compensation
    under this Section 2.8. Determinations and allocations by Bank for purposes
    of this Section 2.8 of the effect of any regulatory change on its costs of
    maintaining its obligations to make Advances or of making or maintaining
    Advances or on amounts receivable by it in respect of Advances, and of the
    additional amounts required to compensate Bank in respect of any Additional
    Costs, shall be conclusive absent manifest error.

 c. Borrower shall pay to Bank, upon the request of Bank, such amount or amounts
    as shall be sufficient (in the sole good faith opinion of Bank) to
    compensate it for any reasonable loss, costs or expense incurred by it as a
    result of any failure by Borrower to borrow a LIBOR Rate Advance on the date
    for such borrowing specified in the relevant notice of borrowing hereunder.
 d. If Bank shall determine that the adoption or implementation of any
    applicable law, rule, regulation or treaty regarding capital adequacy, or
    any change therein, or any change in the interpretation or administration
    thereof by any governmental authority, central bank or comparable agency
    charged with the interpretation or administration thereof, or compliance by
    Bank (or its applicable lending office) with any respect or directive
    regarding capital adequacy (whether or not having the force of law) of any
    such authority, central bank or comparable agency, has or would have the
    effect of reducing the rate of return on capital of Bank or any person or
    entity controlling Bank (a "Parent") as a consequence of its obligations
    hereunder to a level below that which Bank (or its Parent) could have
    achieved but for such adoption, change or compliance (taking into
    consideration its policies with respect to capital adequacy) by an amount
    deemed by Bank to be material, then from time to time, within 15 days after
    demand by Bank, Borrower shall pay to Bank such additional amount or amounts
    as will compensate Bank for such reduction. A statement of Bank claiming
    compensation under this Section and setting forth the additional amount or
    amounts to be paid to it hereunder shall be conclusive absent manifest
    error.
 e. If at any time Bank, in its sole and absolute discretion, determines that:
    (i) the amount of the LIBOR Rate Advances for periods equal to the
    corresponding Interest Periods or any other period are not available to Bank
    in the offshore currency interbank markets, or (ii) the LIBOR Rate does not
    accurately reflect the cost to Bank of lending the LIBOR Rate Advance, then
    Bank shall promptly give notice thereof to Borrower, and upon the giving of
    such notice Bank's obligation to make the LIBOR Rate Advances shall
    terminate, unless Bank and Borrower agree in writing to a different interest
    rate applicable to LIBOR Rate Advances. If it shall become unlawful for Bank
    to continue to fund or maintain any Advances, or to perform its obligations
    hereunder, upon demand by Bank, Borrower shall prepay the Advances in full
    with accrued interest thereon and all other amounts payable by Borrower
    hereunder.

Term
. This Agreement shall become effective on the Closing Date and, subject to
Section 12.7, shall continue in full force and effect for a term ending on the
Equipment Maturity Date. 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. Notwithstanding termination, Bank's Lien on the Collateral
shall remain in effect for so long as any Obligations are outstanding.

CONDITIONS OF LOANS.
    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;
     b. a certificate of the Secretary of Borrower with respect to incumbency
        and resolutions authorizing the execution and delivery of this
        Agreement;
     c. a financing statement (Form UCC-1);
     d. an intellectual property security agreement;
     e. agreement to provide insurance;
     f. payment of the fees and Bank Expenses then due specified in Section 2.6
        hereof;
     g. an audit of the Collateral, the results of which shall be satisfactory
        to Bank; and
     h. such other documents, and completion of such other matters, as Bank may
        reasonably deem necessary or appropriate.

 1. 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
    b. the representations and warranties contained in Section 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.

CREATION OF SECURITY INTEREST.
    Grant of Security Interest
    . Borrower grants and pledges to Bank a continuing security interest in all
    presently existing and hereafter acquired or arising Collateral in order to
    secure prompt repayment of any and all Obligations and in order 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 Collateral acquired after the date hereof.
 1. Delivery of Additional Documentation Required. Borrower shall from time to
    time execute and deliver to Bank, at the request of Bank, all Negotiable
    Collateral, all financing statements and other documents that Bank may
    reasonably request, in form satisfactory to Bank, to perfect and continue
    perfected Bank's security interests in the Collateral and in order to fully
    consummate all of the transactions contemplated under the Loan Documents.
 2. 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 once 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.

REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants as follows:

Due Organization and Qualification
. Borrower and each Subsidiary is a corporation duly existing under the laws of
its state of incorporation 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.

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 Certificate of Incorporation or Bylaws, nor will they constitute an
event of default under any material agreement to which Borrower is a party or by
which Borrower is bound. Borrower is not in default under any agreement to which
it is a party or by which it is bound, which default could have a Material
Adverse Effect. No Prior Encumbrances. Borrower has good and marketable title to
the Collateral, free and clear of Liens, except for Permitted Liens. Bona Fide
Eligible Accounts. The Eligible Accounts are bona fide existing obligations. The
property and services giving rise to such Eligible Accounts has been delivered
or rendered to the account debtor or to the account debtor's agent for immediate
and unconditional acceptance by the account debtor. Borrower has not received
notice of actual or imminent Insolvency Proceeding of any account debtor that is
included in any Borrowing Base Certificate as an Eligible Account. Merchantable
Inventory. All Inventory is in all material respects of good and marketable
quality, free from all material defects, except for Inventory for which adequate
reserves have been made. Intellectual Property Collateral. Borrower is the sole
owner of the Intellectual Property Collateral, except for non-exclusive licenses
granted by Borrower to its customers in the ordinary course of business. Each of
the Patents is valid and enforceable, and no part of the Intellectual Property
Collateral has been judged invalid or unenforceable, in whole or in part, and no
claim has been made that any part of the Intellectual Property Collateral
violates the rights of any third party. Borrower's rights as a licensee of
intellectual property do not give rise to more than five percent (5%) of its
gross revenue in any given month, including without limitation revenue derived
from the sale, licensing, rendering or disposition of any product or service.
Except as set forth in the Schedule, Borrower is not a party to, or bound by,
any agreement that restricts the grant by Borrower of a security interest in
Borrower's rights under such agreement. Name; Location of Chief Executive
Office. Except as disclosed in the Schedule, Borrower has not done business
under any name other than that specified on the signature page hereof. The chief
executive office of Borrower is located at the address indicated in Section 10
hereof. Litigation. Except as set forth in the Schedule, there are no actions or
proceedings pending by or against Borrower or any Subsidiary before any court or
administrative agency in which an adverse decision could have a Material Adverse
Effect, or a material adverse effect on Borrower's interest or Bank's security
interest in the Collateral. No Material Adverse Change in Financial Statements.
All consolidated financial statements related to Borrower and any Subsidiary
that are delivered by Borrower to Bank fairly present in all material respects
Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended. There
has not been a material adverse change in the consolidated financial condition
of Borrower since the date of the most recent of such financial statements
submitted to Bank. Solvency, Payment of Debts. Borrower is solvent and able to
pay its debts (including trade debts) as they mature. Regulatory Compliance.
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
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 and
U of the Board of Governors of the Federal Reserve System). Borrower has
complied with all the provisions of the Federal Fair Labor Standards Act.
Borrower has not violated any statutes, laws, ordinances or rules applicable to
it, violation of which could have a Material Adverse Effect. Environmental
Condition. Except as disclosed in the Schedule, none of Borrower's or any
Subsidiary's properties or assets has ever been used by Borrower or any
Subsidiary or, to the best of Borrower's knowledge, by previous owners or
operators, in the disposal of, or to produce, store, handle, treat, release, or
transport, any hazardous waste or hazardous substance other than in accordance
with applicable law; to the best of Borrower's knowledge, none of Borrower's
properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a hazardous waste or
hazardous substance disposal site, or a candidate for closure pursuant to any
environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste
or hazardous substances into the environment. Taxes. 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. Subsidiaries. Borrower does not own any stock,
partnership interest or other equity securities of any Person, except for
Permitted Investments. 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, the failure to obtain which could have a Material Adverse Effect.
Investment Accounts. None of Borrower's property is maintained or invested with
a Person other than Bank. Full Disclosure. No representation, warranty or other
statement made by Borrower in any certificate or written statement 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. AFFIRMATIVE COVENANTS.

Borrower covenants and agrees that, until payment in full of all outstanding
Obligations, and for so long as Bank may have any commitment to make a Credit
Extension hereunder, Borrower shall do all of the following:

Good Standing
. Borrower shall maintain its and each of its Subsidiaries' corporate existence
in its jurisdiction of incorporation and maintain qualification in each
jurisdiction in which the failure to so qualify could have a Material Adverse
Effect. Borrower shall maintain, and shall cause each of its Subsidiaries to
maintain, in force all licenses, approvals and agreements, the loss of which
could have a Material Adverse Effect.

Government Compliance. 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, and shall cause each
Subsidiary to comply, with all statutes, laws, ordinances and government rules
and regulations to which it is subject, noncompliance with which could have a
Material Adverse Effect, or a material adverse effect on the Collateral or the
priority of Bank's Lien on the Collateral. Financial Statements, Reports,
Certificates. Borrower shall deliver to Bank: (a) 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 consolidated operations during such period, prepared in accordance
with GAAP, consistently applied, in a form acceptable to Bank and certified by a
Responsible Officer; (b) as soon as available, but in any event within one
hundred twenty (120) days after the end of Borrower's fiscal year, an annual
report and audited consolidated financial statements of Borrower prepared in
accordance with GAAP, consistently applied, together with an unqualified opinion
on such financial statements of an independent certified public accounting firm
reasonably acceptable to Bank; (c) 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 within five (5) days of
filing (or 95 days of calendar quarter end for the from 10-K or 50 days of
calendar quarter end for the form 10-Q); (d) promptly upon receipt of notice
thereof, a report of any legal actions pending or threatened against Borrower or
any Subsidiary that could result in damages or costs to Borrower or any
Subsidiary of One Hundred Thousand Dollars ($100,000) or more; (e) such budgets,
sales projections, operating plans or other financial information as Bank may
reasonably request from time to time generally prepared by Borrower in the
ordinary course of business; and (f) within thirty (30) days of the last day of
each fiscal quarter, 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, including but not limited to any subsequent
ownership right of Borrower in or to any Trademark, Patent or Copyright not
specified in Exhibits A, B, and C of the Intellectual Property Security
Agreement delivered to Bank by Borrower in connection with this Agreement.

If Advances under the Committed Revolving Line, including Letters of Credits and
availability used under the Committed Revolving Line for FX Forward Contracts,
exceed Three Million Dollars ($3,000,000), then within twenty (20) 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 C hereto, together with aged listings of accounts receivable and
accounts payable and a report of deferred revenue.

Borrower shall deliver to Bank with the 10-Q reports a Compliance Certificate
signed by a Responsible Officer in substantially the form of Exhibit D hereto.

Bank shall have a right from time to time hereafter to audit Borrower's Accounts
and appraise Collateral at Borrower's expense, provided that such audits will be
conducted no more often than every twelve (12) months unless an Event of Default
has occurred and is continuing; provided, however, that if Advances under the
Committed Revolving Line, including Letters of Credit and availability used
under the Committed Revolving Line for FX Forward Contracts, exceed Three
Million Dollars ($3,000,000), then such audits may be conducted no more often
than every six (6) months unless an Event of Default has occurred and is
continuing.

Inventory; Returns. Borrower shall keep all Inventory in good and marketable
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 usual customary practices of Borrower, as they exist at the time of the
execution and delivery of this Agreement. Borrower shall promptly notify Bank of
all returns and recoveries and of all disputes and claims, where the return,
recovery, dispute or claim involves more than Fifty Thousand Dollars ($50,000).
Taxes. Borrower shall make, and shall 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, and will execute and
deliver to Bank, on demand, appropriate certificates attesting to the payment or
deposit thereof; and Borrower will make, and will cause each Subsidiary to make,
timely payment or deposit of all material tax payments and withholding taxes
required of it by applicable laws, including, but not limited to, those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Bank with proof satisfactory to
Bank indicating that Borrower or a Subsidiary has made such payments or
deposits; 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. 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 insurance relating
   to Borrower's business and ownership and use of the Collateral 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 such 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 thereof,
   and all liability insurance policies shall show the Bank as an additional
   insured and shall 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 such policies of
   insurance and evidence of the payments of all premiums therefor. All proceeds
   payable under any such policy shall, at the option of Bank, be payable to
   Bank to be applied on account of the Obligations.
Principal Depository. Borrower shall maintain its principal depository and
operating accounts with Bank. Quick Ratio. Borrower shall maintain, as of the
last day of each calendar quarter, a ratio of Quick Assets to Current
Liabilities less deferred revenue of at least 2.50 to 1.00. Tangible Net Worth.
Borrower shall maintain, as of the last day of each fiscal quarter, a Tangible
Net Worth of not less than Twenty-Five Million Dollars ($25,000,000) plus sixty
percent (60%) of any New Equity. Registration of Intellectual Property Rights.
a. Borrower shall register or cause to be registered on an expedited basis (to
   the extent not already registered) with the United States Patent and
   Trademark Office or the United States Copyright Office, as applicable:
   (i) those intellectual property rights listed on Exhibits A, B and C to the
   Intellectual Property Security Agreement delivered to Bank by Borrower in
   connection with this Agreement, within thirty (30) days of the date of this
   Agreement, (ii) all registerable intellectual property rights Borrower has
   developed as of the date of this Agreement but heretofore failed to register,
   within thirty (30) days of the date of this Agreement, and (iii) those
   additional intellectual property rights developed or acquired by Borrower
   from time to time in connection with any product or service, prior to the
   sale or licensing of such product or the rendering of such service to any
   third party, and prior to Borrower's use of such product (including without
   limitation major revisions or additions to the intellectual property rights
   listed on such Exhibits A, B and C). Borrower shall give Bank notice of all
   such applications or registrations.
b. Borrower shall execute and deliver such additional instruments and documents
   from time to time as Bank shall reasonably request to perfect Bank's security
   interest in the Intellectual Property Collateral.
c. Borrower shall (i) protect, defend and maintain the validity and
   enforceability of the Trademarks, Patents and Copyrights, (ii) use its best
   efforts to detect infringements of the Trademarks, Patents and Copyrights and
   promptly advise Bank in writing of material infringements detected and
   (iii) not allow any material Trademarks, Patents or Copyrights to be
   abandoned, forfeited or dedicated to the public without the written consent
   of Bank, which shall not be unreasonably withheld.
d. Bank may audit Borrower's Intellectual Property Collateral to confirm
   compliance with this Section, provided such audit may not occur more often
   than once per year, unless an Event of Default has occurred and is
   continuing. Bank shall have the right, but not the obligation, to take, at
   Borrower's sole expense, any actions that Borrower is required under this
   Section to take but which Borrower fails to take, after fifteen (15) days'
   notice to Borrower. Borrower shall reimburse and indemnify Bank for all
   reasonable costs and reasonable expenses incurred in the reasonable exercise
   of its rights under this Section.
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. NEGATIVE
COVENANTS.

Borrower covenants and agrees that, so long as any credit hereunder shall be
available and until payment in full of the outstanding Obligations or for so
long as Bank may have any commitment to make any Credit Extensions, Borrower
will not do any of the following:

Dispositions
. Convey, sell, lease, transfer or otherwise dispose of (collectively, a
"Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, other than: (i) Transfers of Inventory in the ordinary
course of business; (ii) Transfers of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; or (iii) Transfers of surplus, worn-out or obsolete
Equipment.

Change in Business; Change in Control or Executive Office. Engage in any
business, or permit any of its Subsidiaries to engage in any business, other
than the businesses currently engaged in by Borrower and any business
substantially similar or related thereto (or incidental thereto). Borrower will
not suffer or permit a Change in Control or without thirty (30) days prior
written notification to Bank, relocate its chief executive office. Borrower will
not change the date on which its fiscal year ends without Bank's prior written
consent. Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person
(collectively, "Merger and Acquisition Activities"). Notwithstanding the
foregoing, Borrower may engage in Merger and Acquisition Activities in which (i)
such Merger and Acquisition Activities are generally in Borrower's industry and
do not exceed an aggregate consideration of Seventy-Five Million Dollars
($75,000,000) through the Revolving Maturity Date, (ii) Borrower is the
surviving entity as a result of such transaction and there is no substantial
change in Borrower's executive management and (iii) the consideration consists
of its common stock or cash, provided that the aggregate amount of cash paid in
connection with Merger and Acquisition Activity may not exceed Ten Million
Dollars ($10,000,000) through the Revolving Maturity Date (and Twenty Million
Dollars ($20,000,000) per calendar year during the term of this Agreement) and
further provided that Borrower may not engage in any Merger and Acquisition
Activity if an Event of Default has occurred and is continuing at the time of
such a proposed transaction or if an Event of Default would exist after giving
effect to such transaction. Indebtedness. Create, incur, assume or be or remain
liable with respect to any Indebtedness, or permit any Subsidiary so to do,
other than Permitted Indebtedness. Encumbrances. Create, incur, assume or suffer
to exist 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.
Distributions. Pay any dividends (other than dividends payable in stock) or make
any other distribution or payment on account of or in redemption, retirement or
purchase of any capital stock (in excess of Five Hundred Thousand Dollars
($500,000) per fiscal year), or permit any of its Subsidiaries to do so, except
that Borrower may repurchase the stock of former employees 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.
Investments. Directly or indirectly acquire or own, or make any Investment in or
to any Person, or permit any of its Subsidiaries so to do, other than Permitted
Investments. Maintain or invest any of its property with a Person other than
Bank unless such Person has entered into a control agreement with Bank, in form
and substance satisfactory to Bank. Transactions with Affiliates. Directly or
indirectly enter into or permit to exist any material transaction with any
Affiliate of Borrower except for 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. 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, or amend any
provision contained in any documentation relating to the Subordinated Debt
without Bank's prior written consent. Inventory and Equipment. Store the
Inventory or the Equipment with a bailee, warehouseman, or similar party unless
Bank has received a pledge of the warehouse receipt covering such Inventory.
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 only at the location set forth in Section 10 hereof and
such other locations of which Borrower gives Bank prior written notice and as to
which Borrower signs and files a financing statement where needed to perfect
Bank's security interest. Compliance. Become an "investment company" 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. Fail to meet the minimum funding requirements of ERISA, permit
a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur,
fail to comply with the Federal Fair Labor Standards Act or violate any law or
regulation, which violation could have a Material Adverse Effect, or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral, or permit any of its Subsidiaries to do any of the foregoing.
Negative Pledge Agreements. Permit the inclusion in any contract to which it
becomes a party of any provisions that could restrict or invalidate the creation
of a security interest in Borrower's rights and interests in any Collateral.
EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an Event of Default by
Borrower under this Agreement:

Payment Default
. If Borrower fails to pay, when due, any of the Obligations;

Covenant Default. If Borrower fails to perform any obligation under Article 6 or
violates any of the covenants contained in Article 7 of this Agreement, or fails
or neglects to perform, keep, or observe any other material term, provision,
condition, covenant, or agreement 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, covenant
or agreement that can be cured, has failed to cure such default within ten (10)
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 ten (10) day period or cannot after diligent attempts by
Borrower be cured within such ten (10) 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, and within such reasonable time period the failure
to have cured such default shall not be deemed an Event of Default (provided
that no Credit Extensions will be required to be made during such cure period);
Material Adverse Change. If there occurs a material adverse change in Borrower's
business or financial condition, or if there is a material impairment of the
prospect of repayment of any portion of the Obligations or a material impairment
of the value or priority of Bank's security interests in the Collateral;
Attachment. If any material portion of Borrower's 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 ten (10) days, or if Borrower 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
assets, or if a notice of lien, levy, or assessment is filed of record with
respect to any of Borrower's 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 ten (10) days
after Borrower 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 (provided
that no Credit Extensions will be required to be made during such cure period);
Insolvency. If Borrower becomes insolvent, or if an Insolvency Proceeding is
commenced by Borrower, or if an Insolvency Proceeding is commenced against
Borrower 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); Other Agreements. If there is a default in any agreement to which
Borrower 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 Fifty Thousand Dollars ($50,000) or
that could have a Material Adverse Effect; Subordinated Debt. If Borrower makes
any payment on account of Subordinated Debt, except to the extent such payment
is allowed under any subordination agreement entered into with Bank; Judgments.
If a judgment or judgments for the payment of money in an amount, individually
or in the aggregate, of at least Fifty Thousand Dollars ($50,000) shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period
of ten (10) days (provided that no Credit Extensions will be made prior to the
satisfaction or stay of such judgment); or 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. BANK'S RIGHTS AND
REMEDIES.
 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, all Obligations shall become immediately due and payable
       without any action by Bank);
    b. 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;
    c. Settle or adjust disputes and claims directly with account debtors for
       amounts, upon terms and in whatever order that Bank reasonably considers
       advisable;
    d. 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. 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;
    e. Set off and apply to the Obligations any and all (i) balances and
       deposits of Borrower held by Bank, or (ii) indebtedness at any time owing
       to or for the credit or the account of Borrower held by Bank;
    f. 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;
    g. Dispose of the Collateral 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;
    h. Bank may credit bid and purchase at any public sale; and
    i. Any deficiency that exists after disposition of the Collateral as
       provided above will be paid immediately by Borrower.
 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; (g) to modify, in its sole
    discretion, any intellectual property security agreement entered into
    between Borrower and Bank without first obtaining Borrower's approval of or
    signature to such modification by amending Exhibits A, B, and C, thereof, as
    appropriate, to include reference to any right, title or interest in any
    Copyrights, Patents or Trademarks acquired by Borrower after the execution
    hereof or to delete any reference to any right, title or interest in any
    Copyrights, Patents or Trademarks in which Borrower no longer has or claims
    to have any right, title or interest; (h) to 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; and (i) to transfer the Intellectual Property Collateral
    into the name of Bank or a third party to the extent permitted under the
    California Uniform Commercial Code; provided Bank may exercise such power of
    attorney to sign the name of Borrower on any of the documents described in
    Section 4.2 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 have been fully repaid and performed and Bank's
    obligation to provide Credit Extensions hereunder is terminated.
 3. Accounts Collection. At any time during the term of this Agreement, 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.
 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 a Facility in Section 2.1 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 6.6 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.
 5. Bank's Liability for Collateral. So long as Bank complies with reasonable
    banking practices, Bank shall not in any way or manner be liable or
    responsible for: (a) the safekeeping of the Collateral; (b) any loss or
    damage thereto occurring or arising in any manner or fashion from any cause;
    (c) any diminution in the value thereof; or (d) any act or default of any
    carrier, warehouseman, bailee, forwarding agency, or other person
    whomsoever. All risk of loss, damage or destruction of the Collateral shall
    be borne by Borrower.
 6. 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.
 7. Demand; Protest. Borrower waives demand, protest, notice of protest, notice
    of default or dishonor, notice of payment and nonpayment, notice of any
    default, nonpayment at maturity, release, compromise, settlement, extension,
    or renewal of accounts, documents, instruments, chattel paper, and
    guarantees at any time held by Bank on which Borrower may in any way be
    liable.

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, or by
telefacsimile to Borrower or to Bank, as the case may be, at its addresses set
forth below:

If to Borrower: Chordiant Software, Inc.
20400 Stevens Creek Boulevard, Suite 400
Cupertino, CA 95014
Attn: Chief Financial Officer/Chief Executive Officer
FAX: (408) 517-0270

If to Bank: Imperial Bank
226 Airport Parkway
San Jose, CA 95110-1024
Attn: Corporate Banking Center
FAX: (408) 451-8586

with a copy to: Imperial Bank
3000 El Camino Real, 8th Floor
Palo Alto, CA 94301
Attn: Robin W. Steinbach
FAX: (650) 213-1710

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.

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 County of Santa
Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

GENERAL PROVISIONS.
Successors and Assigns
. This Agreement shall bind and inure to the benefit of the respective
successors and permitted assigns of each of the parties; 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.
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 (b) all losses or Bank Expenses
in any way suffered, incurred, or paid by Bank 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. Time of Essence. Time is of the
essence for the performance of all obligations set forth in this Agreement.
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. Amendments in Writing,
Integration. This Agreement cannot be amended or terminated orally. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement,
if any, are merged into this Agreement and the Loan Documents. 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. Survival. All covenants,
representations and warranties made in this Agreement shall continue in full
force and effect so long as any Obligations remain outstanding. The obligations
of Borrower to indemnify Bank with respect to the expenses, damages, losses,
costs and liabilities described in Section 12.2 shall survive until all
applicable statute of limitations periods with respect to actions that may be
brought against Bank have run. JUDICIAL REFERENCE.
 a. Other than (i) nonjudicial foreclosure and all matters in connection
    therewith regarding security interests in real or personal property; or
    (ii) the appointment of a receiver, or the exercise of other provisional
    remedies (any and all of which may be initiated pursuant to applicable law),
    each controversy, dispute or claim between the parties arising out of or
    relating to this document, which controversy, dispute or claim is not
    settled in writing within thirty (30) days after the "Claim Date" (defined
    as the date on which a party subject to this Agreement gives written notice
    to all other parties that a controversy, dispute or claim exists), will be
    settled by a reference proceeding in California in accordance with the
    provisions of Section 638 et seq. of the California Code of Civil Procedure,
    or their successor section ("CCP"), which shall constitute the exclusive
    remedy for the settlement of any controversy, dispute or claim concerning
    this Agreement, including whether such controversy, dispute or claim is
    subject to the reference proceeding and except as set forth above, the
    parties waive their rights to initiate any legal proceedings against each
    other in any court or jurisdiction other than Santa Clara County (the
    "Court"). The referee shall be a retired Judge of the Court selected by
    mutual agreement of the parties, and if they cannot so agree within
    forty-five (45) days after the Claim Date, the referee shall be promptly
    selected by the Presiding Judge of the Court (or his representative). The
    referee shall be appointed to sit as a temporary judge, with all of the
    powers for a temporary judge, as authorized by law, and upon selection
    should take and subscribe to the oath of office as provided for in Rule 244
    of the California Rules of the Court (or any subsequently enacted Rule).
    Each party shall have one peremptory challenge pursuant to CCP
    section 170.6. The referee shall (a) be requested to set the matter for
    hearing within sixty (60) days after the date of selection of the referee
    and (b) try any and all issues of law or fact and report a statement of
    decision upon them, if possible, within ninety (90) days of the Claim Date.
    Any decision rendered by the referee will be final, binding and conclusive
    and judgment shall be entered pursuant to CCP section 644 in any court in
    the State of California having jurisdiction. Any party may apply for a
    reference proceeding at any time after thirty (30) days following notice to
    any other party of the nature of the controversy, dispute or claim, by
    filing a petition for a hearing and/or trial. All discovery permitted by
    this Agreement shall be completed no later than fifteen (15) days before the
    first hearing date established by the referee. The referee may extend such
    period in the event of a party's refusal to provide requested discovery or
    unavailability of a witness due to absence or illness. No party shall be
    entitled to "priority" in conducting discovery. Depositions may be taken by
    either party upon seven (7) days written notice, and request for production
    or inspection of documents which cannot be resolved by the parties shall be
    submitted to the referee as provided herein, the Superior Court is empowered
    to issue temporary and/or provisional remedies, as appropriate.
 b. 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 all 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. The party making such a request shall have the
    obligation to arrange for and pay for the court reporter. The costs of the
    court reporter at the trial shall be borne equally by the parties.
 c. 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, to provide all
    temporary and/or provisional remedies and to enter equitable orders that
    will be binding upon the parties. The referee shall issue a single judgment
    at the close of the reference proceeding which shall dispose of all of the
    claims of the parties that are the subject of the reference. The parties
    hereto expressly reserve the right to contest or appeal from the final
    judgment or any appealable order or appealable judgment entered by the
    referee. The parties hereto expressly 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.
 d. In the event that 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 the reference
    procedure herein described will be resolved and determined by arbitration.
    The arbitration will be conducted by a retired judge of the Court, in
    accordance with the California Arbitration Act, section 1280 through
    section 1294.2 of the CCP as amended from time to time. The limitations with
    respect to discovery as set forth hereinabove shall apply to any such
    arbitration proceeding.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

    CHORDIANT SOFTWARE, INC.                 By:           Title:              
  IMPERIAL BANK                 By:           Title:      

DEBTOR CHORDIANT SOFTWARE, INC.

SECURED PARTY: IMPERIAL BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

All personal property of Borrower (herein referred to as "Borrower" or "Debtor")
whether presently existing or hereafter created, written, produced or acquired,
including, but not limited to:

(i) all accounts receivable, accounts, chattel paper, contract rights
(including, without limitation, royalty agreements, license agreements and
distribution agreements), documents, instruments, money, deposit accounts and
general intangibles, including, without limitation, returns, repossessions,
books and records relating thereto, and equipment containing said books and
records, all financial assets, all investment property, including securities and
securities entitlements;

(ii) all software, computer source codes and other computer programs
(collectively, the "Software Products"), and all common law and statutory
copyrights and copyright registrations, applications for registration, now
existing or hereafter arising, United States of America and foreign, obtained or
to be obtained on or in connection with the Software Products, or any parts
thereof or any underlying or component elements of the Software Products
together with the right to copyright and all rights to renew or extend such
copyrights and the right (but not the obligation) of Bank (herein referred to as
"Bank" or "Secured Party") to sue in its own name and/or the name of the Debtor
for past, present and future infringements of copyright;

(iii) all goods, including, without limitation, equipment and inventory
(including, without limitation, all export inventory);

(iv) all guarantees and other security therefor;

(v) all trademarks, service marks, trade names and service names and the
goodwill associated therewith;

(vi) (a) all patents and patent applications filed in the United States Patent
and Trademark Office or any similar office of any foreign jurisdiction, and
interests under patent license agreements, including, without limitation, the
inventions and improvements described and claimed therein, (b) licenses
pertaining to any patent whether Debtor is licensor or licensee, (c) all income,
royalties, damages, payments, accounts and accounts receivable now or hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (d) the right (but not the obligation) to sue for past, present and
future infringements thereof, (e) all rights corresponding thereto throughout
the world in all jurisdictions in which such patents have been issued or applied
for, and (f) the reissues, divisions, continuations, renewals, extensions and
continuations-in-part with any of the foregoing (all of the foregoing patents
and applications and interests under patent license agreements, together with
the items described in clauses (a) through (f) in this paragraph are sometimes
herein individually and collectively referred to as the "Patents"); and

(vii) all products and proceeds, including, without limitation, insurance
proceeds, of any of the foregoing.

EXHIBIT B

LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., PACIFIC TIME

TO: EMERGING GROWTH DIVISION DATE: _______________

FAX #: 650-846-6840 Attn: Compliance TIME: _______________

FROM: CHORDIANT SOFTWARE, INC.

CLIENT NAME (BORROWER)

REQUESTED BY:

AUTHORIZED SIGNER'S NAME

  AUTHORIZED SIGNATURE:   PHONE NUMBER:   FROM ACCOUNT # ______________________
TO ACCOUNT #   REQUESTED TRANSACTION TYPE REQUEST DOLLAR AMOUNT $ PRINCIPAL
INCREASE (ADVANCE) $ PRINCIPAL PAYMENT (ONLY) $ INTEREST PAYMENT (ONLY) $
PRINCIPAL AND INTEREST (PAYMENT) $   OTHER INSTRUCTIONS:   All representations
and warranties of Borrower stated in the Amended and Restated 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;
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.  

BANK USE ONLY

TELEPHONE REQUEST:   The following person is authorized to request the loan
payment transfer/loan advance on the advance designated account and is known to
me.  

Authorized Requester

Phone #

Received By (Bank)

Phone #

 

_____________________________________________

Authorized Signature (Bank)

 

 

EXHIBIT C

BORROWING BASE CERTIFICATE

Borrower: Chordiant Software, Inc. Lender: Imperial Bank

Commitment Amount: $11,500,000 *borrowing base certificate not required if
aggregate outstanding Advances are less than $3,000,000

ACCOUNTS RECEIVABLE    

1. Accounts Receivable Book Value as of ___

  $___________

2. Additions (please explain on reverse)

  $___________

3. TOTAL ACCOUNTS RECEIVABLE

  $___________       ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)    

4. Amounts over 90 days due

$___________  

5. Balance of 25% over 90 day accounts

$___________  

6. Concentration Limits

   

7. Foreign Accounts

$___________  

8. Governmental Accounts

$___________  

9. Contra Accounts

$___________  

10. Demo Accounts

$___________  

11. Intercompany/Employee Accounts

$___________  

12. Other (please explain on reverse)

$___________  

13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS

  $___________

14. Eligible Accounts (#3 minus #13)

  $___________

15. LOAN VALUE OF ACCOUNTS (80% of #14)

  $___________       BALANCES    

16. Maximum Loan Amount

  $___________

17. Total Funds Available [Lesser of #16 or #15]

  $___________

18. Present balance owing on Line of Credit

  $___________

19. Outstanding under Sublimits (Letters of Credit)

  $___________

20. Outstanding under Sublimits (Foreign Exchange)

  $___________

21. RESERVE POSITION (#17 minus #18 and #19 and #20)

   

The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Amended and
Restated Loan and Security Agreement between the undersigned and Imperial Bank.

CHORDIANT SOFTWARE, INC.                 By:    

Authorized Signer

         

 

EXHIBIT D
COMPLIANCE CERTIFICATE

TO: IMPERIAL BANK

FROM: CHORDIANT SOFTWARE, INC.

The undersigned authorized officer of CHORDIANT SOFTWARE, INC. hereby certifies
that in accordance with the terms and conditions of the Amended and Restated
Loan and Security Agreement between Borrower and Bank (the "Agreement"),
(i) Borrower is in complete compliance for the period ending _______________
with all required covenants 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. Attached herewith are the required
documents supporting the above certification. The Officer further certifies that
these are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) and are consistently applied from one period to the next except as
explained in an accompanying letter or footnotes.

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

Reporting Covenant Required

Complies

        Monthly financial statements Monthly within 30 days Yes No Annual (CPA
Audited) FYE within 120 days Yes No 10K and 10Q within 5 days of SEC filing (or
95 days/50 days of quarter end) Yes No A/R & A/P Agings, Borrowing Base Cert.
Monthly within 20 days* Yes No A/R Audit Annual or Semi-Annual* Yes No IP Report
Quarterly within 30 days Yes No *if Advances+LC+FX > $3,000,000              
Financial Covenant Required

Actual

Complies

          Maintain on a Quarterly Basis:        

Minimum Quick Ratio

2.50:1.00

_____:1.00

Yes No

Minimum Tangible Net Worth

$25,000,000 + 60% New Equity $________ Yes No                 Comments Regarding
Exceptions: See Attached. BANK USE ONLY       Received by: Sincerely,

AUTHORIZED SIGNER

      Date:     Verified: SIGNATURE

AUTHORIZED SIGNER

        Date: TITLE     Compliance Status Yes No   DATE  

SCHEDULE OF EXCEPTIONS

Permitted Indebtedness

(Section 1.1)

 

Permitted Investments

(Section 1.1)

 

Permitted Liens

(Section 1.1)

 

Prior Names

(Section 5.7)

 

Litigation

(Section 5.8)

 

CORPORATE RESOLUTIONS TO BORROW

Borrower: CHORDIANT SOFTWARE, INC.

I, the undersigned Secretary or Assistant Secretary of CHORDIANT SOFTWARE, INC.
(the "Corporation"), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of the State of Delaware.

I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true and
complete copies of the Certificate of Incorporation, as amended, and the
Restated Bylaws of the Corporation, each of which is in full force and effect on
the date hereof.

I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions
were adopted.

BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:

NAMES

POSITION

ACTUAL SIGNATURES

                             

acting for and on behalf of this Corporation and as its act and deed be, and
they hereby are, authorized and empowered:

Borrow Money

. To borrow from time to time from Imperial Bank ("Bank"), on such terms as may
be agreed upon between the officers, employees, or agents of the Corporation and
Bank, such sum or sums of money as in their judgment should be borrowed, without
limitation, including such sums as are specified in that certain Amended and
Restated Loan and Security Agreement dated as of August 16, 2000 (the "Loan
Agreement").

Execute Loan Documents

. To execute and deliver to Bank the Loan Agreement and any other agreement
entered into between Corporation and Bank in connection with the Loan Agreement,
all as amended or extended from time to time (collectively, with the Loan
Agreement, the "Loan Documents"), and also to execute and deliver to Bank one or
more renewals, extensions, modifications, refinancings, consolidations, or
substitutions for the Loan Documents, or any portion thereof.

Grant Security

. To grant a security interest to Bank in the Collateral described in the Loan
Documents, which security interest shall secure all of the Corporation's
Obligations, as described in the Loan Documents.

Negotiate Items

. To draw, endorse, and discount with Bank all drafts, trade acceptances,
promissory notes, or other evidences of indebtedness payable to or belonging to
the Corporation or in which the Corporation may have an interest, and either to
receive cash for the same or to cause such proceeds to be credited to the
account of the Corporation with Bank, or to cause such other disposition of the
proceeds derived therefrom as they may deem advisable.

Letters of Credit; Foreign Exchange

. To execute letters of credit applications, foreign exchange agreements and
other related documents pertaining to Bank's issuance of letters of credit and
foreign exchange contracts.

Further Acts

. In the case of lines of credit, to designate additional or alternate
individuals as being authorized to request advances thereunder, and in all
cases, to do and perform such other acts and things, to pay any and all fees and
costs, and to execute and deliver such other documents and agreements as they
may in their discretion deem reasonably necessary or proper in order to carry
into effect the provisions of these Resolutions.

BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set forth opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.

IN WITNESS WHEREOF, I have hereunto set my hand on August 16, 2000 and attest
that the signatures set opposite the names listed above are their genuine
signatures.

    CERTIFIED AND ATTESTED BY:                 X      

IMPERIAL BANK

Member FDIC

ITEMIZATION OF AMOUNT FINANCED

DISBURSEMENT INSTRUCTIONS

(Revolver)

Name(s): CHORDIANT SOFTWARE, INC. Date: August 16, 2000

   

$

credited to deposit account No. ___________ when Advances are requested by
Borrower   Amounts paid to others on your behalf:

$15,000

to Imperial Bank for Loan Fee

$

to Imperial Bank for Document Fee

$

to Imperial Bank for accounts receivable audit (estimate)

$

to Bank counsel fees and expenses

$

to _______________

$

to _______________

$

TOTAL (AMOUNT FINANCED)    

Upon consummation of this transaction, this document will also serve as the
authorization for Imperial Bank to disburse the loan proceeds as stated above.

       

Signature

 

Signature

     

 

IMPERIAL BANK

Member FDIC

ITEMIZATION OF AMOUNT FINANCED

DISBURSEMENT INSTRUCTIONS

(Equipment Loan)

Name(s): CHORDIANT SOFTWARE, INC. Date: August 16, 2000

   

$

credited to deposit account No. ___________ when Advances are requested by
Borrower     Amounts paid to others on your behalf:

$4,000

to Imperial Bank for Loan Fee

$

to Imperial Bank for Document Fee

$

to Imperial Bank for accounts receivable audit (estimate)

$

to Bank counsel fees and expenses

$

to _______________

$

to _______________

$

TOTAL (AMOUNT FINANCED)    

Upon consummation of this transaction, this document will also serve as the
authorization for Imperial Bank to disburse the loan proceeds as stated above.

       

Signature

 

Signature

     

 

 

AGREEMENT TO PROVIDE INSURANCE

TO: IMPERIAL BANK Date: August 16, 2000

c/o Hibernia Mitchel Insurance Services

Post Office Box 8061

Walnut Creek, CA 94596-8061 Borrower: CHORDIANT SOFTWARE, INC.

In consideration of a loan in the amount of $14,810,663, secured by all tangible
personal property including inventory and equipment.

I/We agree to obtain adequate insurance coverage to remain in force during the
term of the loan.

I/We also agree to advise the below named agent to add Imperial Bank as lender's
loss payable on the new or existing insurance policy, and to furnish Bank at
above address with a copy of said policy/endorsements and any subsequent renewal
policies.

I/We understand that the policy must contain:

1. Fire and extended coverage in an amount sufficient to cover:

(a) The amount of the loan, OR

(b) All existing encumbrances, whichever is greater,

But not in excess of the replacement value of the improvements on the real
property.

2. Lender's "Loss Payable" Endorsement Form 438 BFU in favor of Imperial Bank,
or any other form acceptable to Bank.

INSURANCE INFORMATION

Insurance Co./Agent Telephone No.:

Agent's Address:

Signature of Obligor:

Signature of Obligor:

FOR BANK USE ONLY

INSURANCE VERIFICATION: Date: Person Spoken to: Policy Number: Effective From:
To: Verified by:  

 

IMPERIAL BANK  

California's Business Banks

AUTOMATIC DEBIT AUTHORIZATION

Member FDIC

          To: Imperial Bank   Re: Loan # ___________________________________  
You are hereby authorized and instructed to charge account No.
_________________________ in the name of

CHORDIANT SOFTWARE, INC.

for principal and interest payments due on above referenced loan as set forth
below and credit the loan referenced above.  

_X_ Debit each interest payment as it becomes due according to the terms of the
note and any renewals or amendments thereof.

 

____ Debit each principal payment as it becomes due according to the terms of
the note and any renewals or amendments thereof.

  This Authorization is to remain in full force and effect until revoked in
writing.     Borrower Signature Date: August 16, 2000        

 

 

 

 

IMPERIAL BANK  

California's Business Banks

AUTOMATIC DEBIT AUTHORIZATION

Member FDIC

          To: Imperial Bank   Re: Loan # ___________________________________  
You are hereby authorized and instructed to charge account No.
_________________________ in the name of

CHORDIANT SOFTWARE, INC.

for principal and interest payments due on above referenced loan as set forth
below and credit the loan referenced above.  

_X_ Debit each interest payment as it becomes due according to the terms of the
note and any renewals or amendments thereof.

 

_X_ Debit each principal payment as it becomes due according to the terms of the
note and any renewals or amendments thereof.

  This Authorization is to remain in full force and effect until revoked in
writing.     Borrower Signature Date: August 16, 2000        

DEBTOR: CHORDIANT SOFTWARE, INC.

SECURED PARTY: IMPERIAL BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT
TO UCC-1 FINANCING STATEMENT

All personal property of Borrower (herein referred to as "Borrower" or "Debtor")
whether presently existing or hereafter created, written, produced or acquired,
including, but not limited to:

(i) all accounts receivable, accounts, chattel paper, contract rights
(including, without limitation, royalty agreements, license agreements and
distribution agreements), documents, instruments, money, deposit accounts and
general intangibles, including, without limitation, returns, repossessions,
books and records relating thereto, and equipment containing said books and
records, all financial assets, all investment property, including securities and
securities entitlements;

(ii) all software, computer source codes and other computer programs
(collectively, the "Software Products"), and all common law and statutory
copyrights and copyright registrations, applications for registration, now
existing or hereafter arising, United States of America and foreign, obtained or
to be obtained on or in connection with the Software Products, or any parts
thereof or any underlying or component elements of the Software Products
together with the right to copyright and all rights to renew or extend such
copyrights and the right (but not the obligation) of Bank (herein referred to as
"Bank" or "Secured Party") to sue in its own name and/or the name of the Debtor
for past, present and future infringements of copyright;

(iii) all goods, including, without limitation, equipment and inventory
(including, without limitation, all export inventory);

(iv) all guarantees and other security therefor;

(v) all trademarks, service marks, trade names and service names and the
goodwill associated therewith;

(vi) (a) all patents and patent applications filed in the United States Patent
and Trademark Office or any similar office of any foreign jurisdiction, and
interests under patent license agreements, including, without limitation, the
inventions and improvements described and claimed therein, (b) licenses
pertaining to any patent whether Debtor is licensor or licensee, (c) all income,
royalties, damages, payments, accounts and accounts receivable now or hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (d) the right (but not the obligation) to sue for past, present and
future infringements thereof, (e) all rights corresponding thereto throughout
the world in all jurisdictions in which such patents have been issued or applied
for, and (f) the reissues, divisions, continuations, renewals, extensions and
continuations-in-part with any of the foregoing (all of the foregoing patents
and applications and interests under patent license agreements, together with
the items described in clauses (a) through (f) in this paragraph are sometimes
herein individually and collectively referred to as the "Patents"); and

(vii) all products and proceeds, including, without limitation, insurance
proceeds, of any of the foregoing.