Exhibit 10.30

LOAN AND SECURITY AGREEMENT

    THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of May 21, 2013
(the "Effective Date") between SILICON VALLEY BANK, a California corporation
("Bank"), and AUGME TECHNOLOGIES, INC., a Delaware corporation, HIPCRICKET,
INC., a Delaware corporation, and GEOS COMMUNICATIONS IP HOLDINGS, INC., a
Delaware corporation (each a "Co-Borrower" and collectively "Co-Borrowers"),
provides the terms on which Bank shall lend to Co-Borrowers and Co-Borrowers
shall repay Bank. The parties agree as follows:

    1  ACCOUNTING  AND OTHER TERMS

    Accounting terms not defined in this Agreement shall be construed following
GAAP. Calculations and determinations must be made following GAAP. Capitalized
terms not otherwise defined in this Agreement shall have the meanings set forth
in Section 13. All other terms contained in this Agreement, unless otherwise
indicated, shall have the meaning provided by the Code to the extent such terms
are defined therein.

    2  LOAN AND TERMS OF PAYMENT
 
    2.1  Promise to
Pay.  Co-Borrowers  hereby  unconditionally  promise  to  pay  Bank  the  outstanding
principal amount of all Credit Extensions and accrued and unpaid interest
thereon as and when due in accordance with this Agreement.

    2.2  Revolving Advances.

       (a)  Availability. Subject to the terms and conditions of this Agreement
and to deduction of Reserves, Bank shall make Advances not exceeding the
Availability Amount. Amounts bmrnwed under  the Revolving Line may be repaid
and, prior to the Revolving Line Maturity Date, reborrowed, subject to the
applicable terms and conditions precedent herein.

       (b)  Termination; Repayment.  The Revolving Line terminates on the
Revolving Line Maturity Date, when the principal amount of all Advances, the
unpaid interest thereon, and all other Obligations relating to the Revolving
Line shall be immediately due and payable.

    2.3  Overadvances.  If, at any time, the outstanding principal amount of any
Advances exceeds the lesser of either the Revolving Line or the Borrowing Base,
Co-Borrowers shall immediately pay to Bank in cash the amount of such excess
(such excess, the "Overadvance"). Without limiting Co-Borrowers' obligation to
repay Bank any Overadvance, Co-Borrowers agree to pay Bank interest on the
outstanding amount of any Overadvance, on demand, at the Default Rate.

    2.4  Intentionally Omitted.

    2.5  Payment of Interest on the Credit Extensions.

       (a)  Advances. Subject to Section 2.5(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a floating per
annum rate equal to (a) at all times when a Streamline Period is in effect,
three quarters of one percentage point (0.75%) above the Prime Rate, and (b) at
all  times  when  a Streamline Period is not in effect, one and one quaiter
percentage points (1.25%) above the Prime Rate, which interest shall be payable
monthly in accordance with Section 2.5(d) below.

       (b)  Default Rate.  Immediately upon the occurrence and during the
continuance of an Event of Default, Obligations shall bear interest at a rate
per annum which is five percentage points (5.0%) above the rate that
is  otherwise applicable thereto (the "Default Rate"). Fees and  expenses which
are required to be paid by Co-Borrowers pursuant to the Loan Documents
(including, without limitation,  Bank  Expenses)  but  are not paid when due
shall bear interest until paid at a rate equal to the highest rate applicable to
the Obligations. Payment or acceptance  of the  increased  interest  rate
provided  in this  Section 2.5(b)  is not  a permitted  alternative  to timely
payment  and shall not constitute  a waiver  of any Event of Default  or
otherwise prejudice  or limit any rights  or remedies of Bank.
 
 
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       (c)  Adjustment to Interest Rate.  Changes to the interest rate of any
Credit Extension based on changes to the Prime Rate shall be effective on the
effective date of any change to the Prime Rate and to the extent of any such
change.

       (d)  Payment; Interest Computation. Interest is payable monthly on the
first calendar day of each month and shall be computed on the basis of a 360-day
year for the actual number of days elapsed. In computing interest, (i) all
payments received after 12:00 p.m. Pacific time on any day shall be deemed
received at the opening of business on the next Business Day, and (ii) the date
of the making of any Credit Extension shall be included and the date of payment
shall be excluded; provided, however, that if any Credit Extension is repaid on
the same day on which it is made, such day shall be included in computing
interest on such Credit Extension.

    2.6  Fees.  Co-BolTowers shall pay to Ban1c:

       (a)  Commitment  Fee.  A fully earned, non-refundable commitment fee of
Twenty Five Thousand Dollars ($25,000), on the Effective Date;

       (b)  Unused Revolving Line Facility Fee. A fee (the "Unused Revolving
Line Facility Fee") in an amount equal to one quarter of one percent (0.25%) per
annum of the average unused portion of the Revolving Line, as determined by
Bank, charged quarterly in arrears. The unused portion of the Revolving Line,
for purposes of this calculation, shall be calculated on a calendar year basis
and shall equal the difference between (i) the Revolving Line, and (ii) the
average for the period of the daily closing balance of the Revolving Line
outstanding; and

       (c)  Bank Expenses. All Bank Expenses  (including reasonable attorneys'
fees and expenses for documentation and negotiation of this Agreement) incuned
through and after the Effective Date, when due (or, if no stated due date, upon
demand by Bank).

       (d)  Fees Fully Earned. Unless otherwise provided in this Agreement or in
a separate writing by Bank, Co-Bonowers shall not be entitled to any credit,
rebate, or repayment of any fees earned by Bank pursuant to this Agreement
notwithstanding any termination of this Agreement or the suspension or
termination of Bank's obligation to make loans and advances hereunder. Bank may
deduct amounts owing by Co-Borrowers under the clauses of this Section 2.6
pursuant to the terms of Section 2.7(c). Bank shall provide Co-Borrowers written
notice of deductions made from the Designated Deposit Account pursuant to the
terms of the clauses of this Section 2.6.
 
    2.7  Payments; Application of Payments; Debit of Accounts.

       (a)  All payments to be made by Co-Borrowers under any Loan Document
shall be made in immediately available funds in Dollars, without setoff or
counterclaim, before 12:00 p.m. Pacific time on the date when due. Payments of
principal and/or interest received after  12:00 p.m. Pacific time are considered
received at the opening of business on the next Business Day. When a payment is
due on a day that is not a Business Day, the payment shall be due the next
Business Day, and additional fees or interest, as applicable, shall continue to
accrue until paid.

       (b)  Bank has the exclusive right to determine the order and manner in
which all payments with respect to the Obligations may be applied. Co-Borrowers
shall have no right to specify the order or the accounts to which Bank shall
allocate or apply any payments required to be made by Co-Borrowers to Bank or
otherwise received by Bank under this Agreement when any such allocation or
application is not specified elsewhere in this Agreement.

       (c)  Bank may debit any of Co-Borrowers' deposit accounts, including the
Designated Deposit Account, for principal and interest payments or any other
amounts Co-Borrowers  owe Bank when  due. These debits shall not constitute a
set-off.
 
 
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    2.8  Withholding. Payments received by Bank from  Co-Borrowers  under  this
Agreement  will be made free and clear of and without deduction for any and all
present or future taxes, levies,  imposts,  duties, deductions, withholdings,
assessments,  fees or other charges imposed  by any Governmental
Authority  (including any interest, additions to tax or penalties applicable
thereto). Specifically, however, if at any time  any Governmental Authority,
applicable law, regulation or international agreement requires Co-Borrowers to
make any withholding or deduction from any such payment or other sum payable
hereunder to Bank, Co-Borrowers hereby covenant and agree that the amount due
from Co-Borrowers with respect to such payment or other sum payable hereunder
will be increased to the extent necessary to ensure that, after the making of
such required withholding or deduction, Bank receives a net sum equal to the sum
which it would have received had no withholding or deduction been required, and
Co-Borrowers shall pay the full amount withheld or deducted to the relevant
Governmental Authority. Co-Borrowers will, upon request, furnish Bank with proof
reasonably satisfactory to Bank indicating that Co-Borrowers have made such
withholding payment; provided, however, that  Co-Borrowers need not make any
withholding payment if the amount or validity of such withholding payment is
contested in good faith by appropriate and timely proceedings and as to which
payment in full is bonded or reserved against by Co-Borrowers. The agreements
and obligations of Co-Borrowers contained in this Section 2.8 shall survive the
termination of this Agreement.

    3  CONDITIONS OF LOANS

    3.1  Conditions Precedent to Initial Advance. Bank's obligation
to  make  the  initial Advance  is subject to the condition precedent that Bank
shall have received, in form and substance satisfactory to Bank, such documents,
and completion of such other matters, as Bank may reasonably deem necessary or
appropriate, including, without limitation:

       (a)  duly executed original signatures to the Loan Documents;

       (b)  each Co-Borrower's Operating Documents and  long-form good standing
certificates of each Co-Borrower and their Subsidiaries certified by the
Secretary of State (or equivalent agency) of such Co-Borrower and such
Subsidiaries' jurisdiction of organization or formation and each jurisdiction in
which such Co-Borrower and each Subsidiary is qualified to conduct business,
each as of a date no earlier than thirty (30) days prior to the Effective Date;
 
       (c) 
duly  executed  original  signatures  to  the  completed  Borrowing  Resolutions   for  each
Co-Borrower;

       (d)  certified copies, dated as of a recent date, of financing statement
searches, as Bank may request, accompanied by written evidence (including any
UCC termination statements) that the Liens indicated in any such financing
statements either constitute Permitted Liens or have been or, in connection
with  the  initial Advance, will be terminated or released;
 
       (e)  the Perfection  Certificate of each Co-Borrower, together with the
duly executed original signatures thereto;

       (f)  the  completion  of
the  Initial  Audit  with  results  satisfactory  to  Bank  in  its  sole  and
absolute discretion; and
 
       (g)  payment of the fees and Bank Expenses then due as specified in
Section 2.6 hereof.
 
    3.2  Conditions  Precedent  to  all  Credit  Extensions. 
Bank's  obligations  to  make  each  Credit Extension, including the initial
Credit Extension, is subject to the following conditions precedent:

       (a)  timely receipt of an executed Transaction Report;

       (b)  the representations and warranties in this Agreement shall be true,
accurate, and complete in all material respects  on the date of the Transaction
Report and on the Funding Date of each Credit Extension;

provided, however, that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date, and no
Event of Default shall have occurred and be continuing or result from the Credit
Extension. Each Credit Extension is each Co-Borrower's representation and
wmTanty on that date that the representations and warranties in this Agreement
remain true, accurate, and complete in all material respects; provided, however,
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof; and provided, fu1ther that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date; and
 
 
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       (c)  Bank determines to its satisfaction that there has not been a
Material Adverse Change.

    3.3  Postclosing  Conditions.   No  later than  sixty (60) days after the
Effective Date,  Co-Borrowers shall deliver to Bank:

       (a)  a landlord's consent in favor of Bank for each leased location by
the respective landlord thereof, together with the duly executed original
signatures thereto;

       (b)  a bailee's waiver in favor of Bank for each location where a
Co-Borrower maintain property with a third party, by each such third party,
together with the duly executed original signatures thereto; and

       (c)  evidence satisfactory to Bank that the insurance policies and
endorsements required by Section 6.7 hereof are in full force and effect,
together with appropriate evidence showing lender loss payable and/or additional
insured clauses or endorsements in favor of Bank.

    3.4  Covenant to Deliver.   Co-Borrowers agree to deliver to Bank each item
required to be delivered to Bank under this Agreement as a condition precedent
to any Credit Extension.  Co-Borrowers expressly agree that a Credit Extension
made prior to the receipt by Bank of any such item shall not constitute a waiver
by Bank of Co-Borrowers' obligation to deliver such item, and the making of any
Credit Extension in the absence of a required item shall be in Bank's sole
discretion.

    3.5  Procedures for Borrowing.   Subject to the prior satisfaction of all
other applicable conditions to the making of an Advance set forth in this
Agreement, to obtain an Advance, Co-Borrowers shall notify  Bank (which notice
shall be irrevocable) by electronic mail by 12:00 p.m. Pacific time on the
Funding  Date  of the Advance. In connection with such notification, Co-BmTOwers
must promptly deliver to Bank by electronic mail a completed Transaction Report
executed by an Authorized Signer together with such other reports and
information, including without limitation, sales journals, cash receipts
journals, accounts receivable aging reports, as Bank may request in its sole
discretion. Bank shall credit proceeds of an Advance to the Designated Deposit
Account.  Bank may make Advances under this Agreement based on instructions from
an Authorized Signer or without instructions ifthe Advances are necessary to
meet Obligations which have become due.

    4  CREATION OF SECURITY INTEREST.

    4.1  Grant of Security Interest. Co-Borrowers hereby grant
Bank,  to  secure  the  payment  and performance in full of all of the
Obligations, a continuing security interest in, and pledges to Bank, the
Collateral, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof.

    Each Co-Borrower acknowledges that it previously has entered, and/or may in
the future enter, into Bank Services Agreements with Bank. Regardless of the
terms of any Bank  Services  Agreement, Co-Borrowers agree that any amounts
Co-Borrowers owe Bank thereunder shall be deemed to be  Obligations hereunder
and that it is the intent of Co-Borrowers and Bank to have all such Obligations
secured by the first priority perfected security interest in the Collateral
granted herein (subject only to Permitted Liens that are permitted pursuant to
the terms of this Agreement to have superior priority to Bank's Lien in this
Agreement).

    If this Agreement is terminated, Bank's Lien in the Collateral shall
continue until the Obligations (other than inchoate indemnity obligations) are
repaid in full in cash. Upon payment in full  in  cash  of the Obligations
(other than inchoate indemnity obligations) and at such time as Bank's
obligation to make Credit Extensions has terminated, Bank shall, at the sole
cost and expense of Co-Borrowers, release its Liens in the Collateral and all
rights therein shall revert to Co-Borrowers. In the event (x) all Obligations
(other than inchoate indemnity obligations), except for Bank Services, are
satisfied in full, and (y) this Agreement is terminated, Bank shall terminate
the security interest granted herein upon Co-Borrowers providing cash collateral
acceptable to Bank in its good faith business judgment for Bank Services, if
any. In the event such Bank Services consist of outstanding Letters of Credit,
Co-Borrowers shall provide to Bank cash collateral in an amount equal to (x) if
such Letters of Credit are denominated in Dollars, then at least one hundred
five percent (105.0%); and (y) if such Letters of Credit are denominated in a
Foreign Currency, then at least one hundred ten percent (110.0%), of the Dollar
Equivalent of the face amount of all such Letters of Credit plus all interest,
fees, and costs due or to become due in connection therewith (as estimated by
Bank in its business judgment), to secure all of the Obligations relating  to
such  Letters of Credit.

 
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    4.2  Priority of Security Interest. Co-Borrowers represent, warrant, and
covenant that the security interest granted herein is and shall at all times
continue to be a first priority perfected security interest in the Collateral
(subject only to Permitted Liens that are permitted pursuant to the terms of
this Agreement to have superior priority to Bank's Lien under this Agreement).
If any Co-Borrower shall acquire a commercial tort claim, such Co-Bmrnwer shall
promptly notify Bank in a writing signed by Co-Borrower of the general details
thereof and grant to Bank in such writing a security interest therein and in the
proceeds  thereof, all upon the terms  of this Agreement, with such writing to
be in form and substance reasonably satisfactory to Bank.

    4.3  Authorization to File Financing Statements. Co-Borrowers hereby
authorize Bank  to  file financing statements, without notice to Co-Borrowers,
with all appropriate jurisdictions to perfect or protect Bank's interest or
rights hereunder, including a notice that any disposition of the Collateral, by
any Co-Borrower or any other Person, shall be deemed to violate the rights of
Bank under the Code. Such fmancing statements may indicate the Collateral as
"all assets of the Debtor" or words of similar effect, or as being of an equal
or lesser scope, or with greater detail, all in Bank's discretion.

    5  REPRESENTATIONS  AND WARRANTIES

    Each Co-Borrower represents and warrants as follows:

    5.1  Due Organization, Authorization; Power and Authority.   Co-Borrower  is
duly  existing and  in good standing as a Registered Organization in its
jurisdiction of formation and is qualified and  licensed to do business and is
in good standing in any jurisdiction in which the conduct of its business or its
ownership of property requires that it be qualified except where the failure to
do so could not reasonably be expected to have a material adverse effect on
Co-Bmrnwer's business.   In connection with this Agreement, Co-Borrower has
delivered to Bank a completed certificate signed by Co-Borrower, entitled
"Perfection Certificate". Co-Borrower  represents  and warrants to Bank that (a)
Co-Borrower's exact legal name is that indicated on the Perfection Certificate
and on the signature page hereof; (b) Co-Borrower is an organization of the type
and are organized in the jurisdiction  set forth in the Perfection Certificate;
(c) the Perfection Ce1tificate accurately sets forth Co-Borrower's
organizational identification number or accurately states that Co-Borrower has
none; (d) the Perfection Certificate accurately sets fmth Co-Borrower's place of
business, or, if more than one, its chief executive office as well as
Co-Borrower's mailing address (if different than its chief executive office);
(e) Co-Borrower (and each of its predecessors) has not, in the past five (5)
years, changed its jurisdiction of formation, organizational strncture or type,
or any organizational number assigned by its jurisdiction; and (f) all other
information set forth on the  Perfection Certificate pertaining to Co-Borrower
and each of its Subsidiaries is accurate and complete (it being understood and
agreed that Co-Borrower may from time to time update ce1tain information in the
Perfection  Certificate after the Effective Date to the extent permitted by one
or more specific provisions in this Agreement). If Co-Borrower is not now a
Registered Organization but later become one, Co-Borrower shall promptly notify
Bank of such occurrence and provide Bank with Co-Borrower's organizational
identification number.

    The execution, delivery and performance by Co-Borrower of the Loan Documents
to which it is a party have been duly authorized, and do not (i) conflict with
any of Co-Borrower's organizational documents, contravene, conflict with,
constitute a default under or violate any material Requirement of Law, (iii)
contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by
which Co-Borrower or any of its Subsidiaries or any of their property or assets
may be bound or affected, (iv) require any action by, filing, registration, or
qualification with, or Governmental Approval from, any Governmental Authority
(except such Governmental Approvals which have already been obtained and are in
full force and effect or (v) conflict with, contravene, constitute a default or
breach under, or result in or permit the termination or acceleration of, any
material agreement  by which Co-Borrower is bound. Co-Borrower is not in default
under any agreement to which it is a party or by which it is bound in which the
default could reasonably be expected to have a material adverse effect on
Co-Borrower's business.

    5.2  Collateral. Co-Borrower has good title to, rights in, and the power to
transfer each item of the Collateral upon which  it purports to grant a Lien
hereunder, free and clear of any and all Liens except Permitted Liens.
Co-Borrower has no Collateral Accounts at or with any bank or
financial  institution other than Bank or Bank's Affiliates except for the
Collateral Accounts described in the Perfection Certificate delivered to
Bank  in connection herewith and which Co-Borrower has taken such actions as are
necessary to give Bank a perfected security interest therein, pursuant to the
term of Section 6.8. The Accounts are bona fide, existing obligations of the
Account Debtors.

    The Collateral is not in the possession of any third party bailee (such as a
warehouse) except as otherwise provided in the Perfection Certificate. None of
the components of the Collateral shall be maintained at locations other than as
provided in the Perfection Certificate or as permitted pursuant to Section 7.2.
 
 
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    All Inventory is in all material respects of good and marketable quality,
free from material defects.

    Co-Borrower is the sole owner of the Intellectual Property which it owns or
purp01ts to own except for (a) non-exclusive licenses granted to its customers
in the ordinary course of business, (b) over-the-counter software that is
commercially available to the public, and (c) material Intellectual Property
licensed to Co-Borrower and noted on the Perfection Certificate. Each Patent
which it owns or purports to own and which is material to Co-Borrower's business
is valid and enforceable, and no part of the Intellectual Property which
Co-Borrower owns or purports to own and which is material to Co-Borrower's
business has been judged invalid or unenforceable, in whole or in part. To the
best of Co-Borrower's knowledge, no claim has been made that any pait of the
Intellectual Property violates the rights of any third party except to the
extent such claim would not reasonably be expected to have a material adverse
effect on Co-Borrower's business.

    Except as noted on the Perfection Certificate, Co-Borrower is not a party
to, nor is it bound by, any Restricted License.

    5.3  Accounts Receivable.

       (a)  For each Account with respect to which Advances are requested, on
the date each Advance is requested and made, such Account shall be an Eligible
Account.

       (b)  All statements made and all unpaid balances appearing in all
invoices, instruments and other documents evidencing the Eligible Accounts are
and shall be true and conect and all such invoices, instruments and other
documents, and all of Co-Borrower's Books are genuine and in all respects what
they purp01t to be. All sales and other transactions underlying or giving rise
to each Eligible Account shall comply in all material respects with all
applicable laws and governmental rules and regulations. Co-Borrower has no
knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor
whose accounts are Eligible  Accounts in any Transaction Report. To the best of
Co-Borrower's knowledge, all signatures and endorsements on all documents,
instruments, and agreements relating to all Eligible Accounts are genuine, and
all such documents, instruments and agreements are legally enforceable in
accordance with their terms.

    5.4  Litigation. There are no actions or proceedings pending or, to the
knowledge of any Responsible Officer, threatened in writing by or against
Co-Borrower or any of its Subsidiaries involving more than, individually or in
the aggregate, One Hundred Thousand Dollars ($100,000).

    5.5  Financial Statements; Financial Condition. All consolidated financial
statements for Co-Borrower and any of its Subsidiaries  delivered  to Bank
fairly present in all material respects Co-Borrower's consolidated financial
condition and Co-Borrower's consolidated results of operations. There has  not
been any material deterioration in Co-Borrower's consolidated financial
condition since the date of the most recent financial statements submitted to
Bank.

    5.6  Solvency. The fair salable value of Co-B01rower's consolidated assets
(including goodwill minus disposition costs) exceeds the fair value of
Co-Borrower's liabilities; Co-Borrower is not left with unreasonably small
capital after the h·ansactions in this Agreement; and Co-Borrower is able to pay
its debts (including h·ade debts) as they mature.

    5.7  Regulatory Compliance. Co-Borrower is not an  "investment
company"  or  a  company "controlled" by an "investment company" under the
Investment Company Act of 1940, as amended.   Co-BolTower is not engaged as one
of its imp01tant activities in extending credit for margin stock (under
Regulations X, T and U of the Federal Reserve Board of Governors). Co-Borrower
(a) has complied in all material respects with all Requirements of Law, and (b)
has not violated any Requirements of Law the violation of which could reasonably
be expected to have a material adverse effect on its business. None of
Co-Borrower's or any of its Subsidiaries' properties or assets has been used by
Co-Borrower or any Subsidiary or, to the best of Co-Borrower's knowledge, by
previous Persons, in disposing, producing, storing, treating, or h·anspo1ting
any hazardous substance other than legally. Co-B01rnwer and each of its
Subsidiaries have obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all Government
Authorities that are necessary to continue their respective businesses as
currently conducted.

    5.8  Subsidiaries; Investments.  Co-Borrower does not own any stock,
paitnership,  or  other ownership interest or other equity securities except for
Permitted Investments.

    5.9  Tax Returns and Payments; Pension Contributions. Co-Borrower has timely
filed all required tax returns and reports, and Co-Borrower has timely paid all
foreign, federal, state and local taxes, assessments, deposits and contributions
owed by Co-Borrower  except (a) to the extent such taxes are being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted, so long as such reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor, or (b)
if such taxes, assessments, deposits and contributions do not, individually or
in the aggregate, exceed One Hundred Thousand Dollars ($100,000).
 
 
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    To the extent Co-Borrower defers payment of any contested taxes, Co-Borrower
shall (i) notify Bank in writing of the commencement of, and any material
development in, the proceedings, and (ii) post bonds or take any other steps
required to prevent the governmental authority levying such contested taxes from
obtaining a Lien upon any of the Collateral that is other than a "Permitted
Lien." Co-Borrower is unaware of any claims or adjustments proposed for any of
Co-Borrower's prior tax years which could result in additional taxes becoming
due and payable by Co-Borrower in excess of One Hundred Thousand Dollars
($100,000). Co-Borrower has paid all  amounts necessary to fund all present
pension, profit sharing and deferred compensation plans in accordance with their
terms, and Co-Borrower has not withdrawn from participation in, and has not
permitted partial or complete termination of, or permitted the occurrence of any
other event with respect to, any such plan which could reasonably be expected to
result in any liability of Co-Borrower, including any liability to the Pension
Benefit Guaranty Corporation or its successors or any other governmental agency.

    5.10  Use of Proceeds. Co-Borrower shall use the proceeds of the Credit
Extensions solely as working capital and to fund its general business
requirements and not for personal, family, household  or  agricultural purposes.

    5.11  Full Disclosure. No written representation, warranty or other
statement of Co-Borrower in any certificate or written statement given to Bank,
as of the date such representation, warranty, or other statement was made, taken
together  with all such written certificates and written statements given to
Bank, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained in the ce1tificates or
statements not misleading (it being recognized by Bank that the projections and
forecasts provided by Co-Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or
periods covered by such projections and forecasts may differ from the projected
or forecasted results).

    5.12  Definition of "Knowledge." For purposes of the Loan Documents,
whenever a representation or warranty is made to Co-Borrower's knowledge or
awareness, to the "best of' Co-Borrower's knowledge, or with a similar
qualification, knowledge or awareness means the actual knowledge, after
reasonable investigation, of any Responsible Officer.

    6  AFFIRMATIVE  COVENANTS

    Co-Borrowers shall do all of the following:

    6.1  Government  Compliance.

       (a)  Maintain their and all their Subsidiaries' legal existence and good
standing in their respective jurisdictions of formation and maintain
qualification in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on a Co-Borrower's
business or operations. Each Co-Borrower shall comply, and have each Subsidiary
comply, in all material respects, with all laws, ordinances and regulations to
which it is subject.

       (b)  Obtain all of the Governmental Approvals necessary for the
performance by Co-B01Towers of their obligations under the Loan Documents to
which it is a party and the grant of a security interest to Bank in all of its
property. Co-Borrowers shall promptly provide copies of any such obtained
Governmental Approvals to Bank.

    6.2  Financial Statements, Reports, Certificates.  Provide Bank with the
following:

       (a)  a Transaction Report (and any  schedules related thereto) (i) with
each request for an Advance, and (ii) within twenty (20) days after the end of
each month;

       (b)  within twenty (20) days after the end of each month,  (A) monthly
accounts receivable agings, aged by invoice date, (B) monthly accounts payable
agings, aged by invoice date, and outstanding or held check registers, if any,
and (C) monthly reconciliations of accounts receivable agings (aged by invoice
date), transaction reports, and general ledger;

       (c)  as soon as available, but no later than thirty (30) days after the
last day of each month, a company prepared consolidated balance
sheet  and  income  statement  covering  Co-Borrowers'  consolidated operations
for such month certified by a Responsible Officer and in a form acceptable to
Bank (the "Monthly Financial    Statements");
 
 
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       (d)  within thirty (30) days after the last day of each month and
together with the Monthly Financial Statements, a duly completed Compliance
Certificate signed by a Responsible Officer, ce1tifying that as of the end of
such month, Co-Borrowers were in full compliance with all of the terms and
conditions of  this Agreement, and setting forth calculations showing compliance
with the financial covenants set forth in this Agreement and such other
information as Bank may reasonably request, including, without limitation, a
statement that at the end of such month there were no held checks;

       (e)  within thirty (30) days  after the end of each fiscal year of
Co-Borrowers, (A) annual operating budgets (including income statements, balance
sheets and cash flow statements, by month) for the upcoming fiscal year of
Co-Borrowers, and (B) annual financial projections for the following fiscal year
(on a quarterly basis) as approved by each Co-Borrowers' board of directors,
together with any related business forecasts used in the preparation of such
annual financial projections;

       (f)  as soon as available, and in any event within one hundred twenty
(120) days following the end of Co-Borrowers' fiscal year, audited consolidated
financial statements prepared under GAAP, consistently applied, together with an
unqualified opinion on the financial statements from an independent certified
public accounting firm reasonably acceptable to Bank;

       (g)  in the event that a Co-Borrower becomes subject to the reporting
requirements under the Exchange Act within five (5) days of filing, copies of
all periodic and other reports, proxy statements and other materials filed by
such Co-Borrower with the SEC, any Governmental Authority succeeding to any or
all of the functions of the SEC or with any national securities exchange, or
distributed to its shareholders, as the case may be. Documents required to be
delivered pursuant to the terms hereof (to the extent any such documents are
included in materials otherwise filed with the SEC) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date on which such Co-Bonower posts such documents, or provides a link
thereto, on Co-Bonower's website on the Internet at
such  Co-Bonower's  website  address;  provided,  however,  Co-Bonower shall
promptly notify Bank in writing (which may be by electronic mail) of the posting
of any such documents;

       (h)  within five (5) days of delivery, copies of all statements, reports
and notices made available to each Co-Bonower's security holders or to any
holders of Subordinated Debt;

       (i)  prompt report of any legal actions pending or threatened
in  writing  against  a Co-Borrower or any of its Subsidiaries that could result
in damages or costs to such Co-Bonower or any of its Subsidiaries of,
individually or in the aggregate, One Hundred Thousand Dollars ($100,000) or
more; and

       (j)  other financial information reasonably requested by Bank.

    6.3  Accounts Receivable.

       (a)  Schedules and Documents Relating to Accounts. Co-Bonowers shall
deliver to Bank transaction reports and schedules of collections, as provided in
Section 6.2, on Bank's standard foims; provided, however, that Co-Bonowers'
failure to execute and deliver the same shall not affect or limit Bank's Lien
and other rights in all of Co-Borrowers' Accounts, nor shall Bank's failure to
advance or lend against a specific Account affect or limit Bank's Lien and other
rights therein. If requested by Bank, Co-Bonowers shall furnish Bank with copies
(or, at Bank's request, originals) of all contracts, orders, invoices, and other
similar documents, and all shipping instructions, delivery receipts, bills of
lading, and other evidence of delivery, for any goods the sale or disposition of
which gave rise to such Accounts. In addition, Co-Bonowers shall deliver to
Bank, on its request, the originals of all instruments, chattel paper, security
agreements, guarantees and other documents and property evidencing or securing
any Accounts, in the same form as received, with all necessary indorsements, and
copies of all credit memos.

       (b)  Disputes. Co-Borrowers shall promptly notify Bank of all disputes or
claims relating to Accounts. Co-Borrowers may forgive (completely or partially),
compromise, or settle any Account for less than payment in full, or agree to do
any of the foregoing so long as (i) Co-Borrowers do so in good faith, in a
commercially reasonable manner, in the ordinary course of business, in
arm's-length transactions, and report the same to Bank in the regular repmts
provided to Bank; (ii) no Event of Default has occmred and is continuing; and
after taking into account all such discounts, settlements and forgiveness, the
total outstanding Advances will not exceed the lesser of the Revolving Line or
the Borrowing Base.
 
 
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       (c)  Collection of Accounts. Co-Borrowers shall have the right to collect
all Accounts, unless and until an Event of Default has occuned and is
continuing. Bank shall require that, no later than ninety (90) days after the
Effective Date, and at all times thereafter, Co-Borrowers direct Account Debtors
to deliver or transmit all proceeds of Accounts into a lockbox account, or via
electronic deposit capture into a "blocked account" as specified by Bank (either
such account, the "Cash Collateral Account"), pursuant to a blocked account
agreement in form and substance satisfactory to as Bank. If such proceeds are
not delivered or transmitted into the Cash Collateral Account within sixty (60)
days of the Effective Date, Co-Bonowers shall provide evidence, in form and
substance satisfactory to Bank, that Co-Borrowers have directed Account Debtors
to deliver or transmit proceeds of Accounts into such Cash Collateral Account.
Whether or not an Event of Default has occuned and is continuing, Co-Borrowers
shall immediately deliver all payments on and proceeds of Accounts to the Cash
Collateral Account
to  be  applied  to  immediately  reduce  the  Obligations  when  a  Streamline  Period  is  not  effect,  or  (ii)
to  be transfened on a daily basis to Co-Borrowers' operating account with Bank
when a Streamline Period is in effect.
 
       (d)  Returns. Provided no Event of Default has occurred and is
continuing, if any Account Debtor returns any Inventory to a Co-Borrower, such
Co-Borrower shall promptly (i) determine the reason for such return, (ii) issue
a credit memorandum to the Account Debtor in the appropriate amount, and (iii)
provide a copy of such credit memorandum to Bank, upon request  from Bank. In
the event any attempted return occurs after the occurrence and during the
continuance of any Event of Default, such Co-Borrower shall hold the returned
Inventory in trust for Bank, and immediately notify Bank of the return of the
Inventory.

       (e)  Verification. Bank may, from time to time, verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Accounts, either in the name of the relevant Co-Borrower or Bank or such
other name as Bank may choose, and notify any Account Debtor of Bank's security
interest in such Account.

       (f)  No Liability. Bank shall not be responsible or liable for any
shmtage or discrepancy in, damage to, or loss or destruction of, any goods, the
sale or other disposition of which gives rise to an Account, or for any error,
act, omission, or delay of any kind occurring in the settlement, failure to
settle, collection or failure to collect any Account, or for settling any
Account in good faith for less than the full amount thereof, nor shall Bank be
deemed to be responsible for any of Co-Borrowers' obligations under any contract
or agreement giving rise to an Account. Nothing herein shall,  however, relieve
Bank from liability for its own gross negligence or willful misconduct.

    6.4  Remittance of Proceeds. Except as otherwise provided in Section 6.3(c),
deliver, in kind, all proceeds arising from the disposition of any Collateral to
Bank in the original form in which received by Co-Borrower not later than the
following Business Day after receipt by Co-Borrower, to be applied to the
Obligations (a) prior to an Event of Default, pursuant to the terms of Section
2.7(b) hereof, and (b) after the occmTence and during the continuance of an
Event of Default, pursuant to the terms of Section 9.4 hereof; provided that, if
no Event of Default has occurred and is continuing, Co-Borrowers shall not be
obligated to remit to Bank the proceeds of the sale of worn out or obsolete
Equipment disposed of by Co-Borrowers in good faith in an arm's length
transaction for an aggregate purchase price of Twenty Five Thousand Dollars
($25,000) or less (for all such transactions in any fiscal year). Each
Co-Borrower agrees that it will not commingle proceeds of Collateral with any of
Co-Borrower's other funds or property, but will hold such proceeds separate and
apart from such other funds and property and in an express trust for Bank.
Nothing in this Section limits the restrictions on disposition of Collateral set
fmth elsewhere in this Agreement.

    6.5  Taxes; Pensions. Timely file all  required tax returns and repmis  and
timely  pay  all  foreign, federal, state and local taxes, assessments, deposits
and contributions owed by a Co-Borrower, except for deferred payment of any
taxes contested pursuant to the terms of Section 5.9 hereof, and shall deliver
to Bank, on demand, appropriate certificates attesting to such payments, and pay
all amounts necessary to fund all present pension, profit sharing and defe1Ted
compensation plans in accordance with their terms.

    6.6  Access to Collateral; Books and Records.
At  reasonable  times,  on  one  (1) Business  Day's notice (provided no notice
is required if an Event of Default has occurred and is continuing), Bank, or its
agents, shall have the right to inspect the Collateral and the right to audit
and copy each Co-Borrower's Books. The foregoing inspections and audits shall be
conducted at such Co-Borrower's expense and no more often than once every six
(6) months unless an Event of Default has occurred and is continuing in which
case such inspections and audits shall occur as often as Bank shall determine is
necessary. The charge therefor shall be Eight Hundred Fifty Dollars ($850) per
person per day (or such higher amount as shall represent Bank's then-current
standard charge for the same), plus reasonable out-of-pocket  expenses. In the
event a Co-Borrower and Bank schedule an audit more than ten (10) days in
advance, and such Co-Borrower cancels or seeks to reschedule the audit with less
than ten (10) days written notice to Bank, then (without limiting any of Bank's
rights or remedies) Co-BmTOwers shall pay Bank a fee of One Thousand Dollars
($1,000) plus any out-of-pocket expenses incurred by Bank to compensate Bank for
the anticipated costs and expenses of the cancellation or rescheduling.

 
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    6.7  Insurance.

       (a)  Keep its business and the Collateral insured for risks and in
amounts standard for companies in Co-Borrowers' industry and location and as
Bank may reasonably request.  Insurance policies shall be in a form, with
financially sound and reputable insurance companies that are not Affiliates of
Co-Borrowers, and in amounts that are satisfactory to Bank. All property
policies shall have a lender's loss payable endorsement showing Bank as an
additional lender loss payee. All liability policies shall show, or have
endorsements showing, Bank as an additional insured. Bank shall be named as
lender loss payee and/or additional insured with respect to any such insurance
providing coverage in respect of any Collateral.

       (b)  Ensure that proceeds payable under any property policy are, at
Bank's option, payable to Bank on account of the Obligations.

       (c)  At Bank's request, Co-Borrowers shall deliver ce1tified copies of
insurance policies and evidence of all premium payments. Each provider of any
such insurance required under this Section 6.7 shall agree, by endorsement upon
the policy or policies issued by it or by independent instruments furnished to
Bank, that it will give Bank thiity (30) days prior written notice before any
such policy or policies shall be materially altered or canceled. If Co-Borrowers
fail to obtain insurance as required under this  Section 6.7 or to
pay  any  amount  or furnish any required proof of payment to third persons and
Bank, Bank may make all or pait of such payment  or obtain such insurance
policies required in this Section 6.7, and take any action under the policies
Bank deems prndent.
 
    6.8  Operating Accounts. No later than sixty (60) days after the Effective
Date and  at  all  times thereafter, maintain all of their and their
Subsidiaries operating and other deposit accounts with Bank and securities
accounts with Bank and Bank's Affiliates.
 
    6.9  Financial Covenants. Maintain at all times, subject to
periodic  reporting  as of the  last  day of each month, unless otherwise noted,
on a consolidated basis with respect to Co-Borrowers:

       (a)  Tangible Net Worth. A Tangible  Net W01th of at least negative
One  Million  Two Hundred Fifty Thousand Dollars ($1,250,000), increasing (i) at
the end of each month by fifty percent (50%) of the proceeds of issuances of
equity securities and the principal amount of Subordinated Debt
received  during  such month, (ii) at the end of each calendar qumter by fifty
percent (50%) of Net Income for such quarter (with no adjustments for net
losses) and (iii) immediately by one and one half times (l .5x) the cash
received by a Co­ Borrower from the sale of any Intellectual Property minus any
realized gain or plus any realized loss associated with the sale of such
Intellectual Property.

    6.10  Protection of Intellectual Property Rights.

       (a)  (i) Protect, defend and maintain the validity and enforceability of
its Intellectual Property; promptly advise Bank in writing of material
infringements or any other event that could reasonably be expected to materially
and adversely affect the value of its Intellectual Property; and (iii) not allow
any Intellectual Property material to a Co-Borrower's business to be abandoned,
forfeited or dedicated to the public without Bank's written consent.

       (b)  Provide written notice to Bank within ten (10) days of entering or
becoming bound by any Restricted License (other than over-the-counter software
that is commercially available to the public). Co-Borrowers shall take such
steps as Bank requests to obtain the consent of, or waiver by, any person whose
consent or waiver is necessary for (i) any Restricted License to be deemed
"Collateral" and for Bank to have a security interest in it that might otherwise
be restricted or prohibited by law or by the terms of any such Restricted
License, whether now existing or entered into  in the future, and (ii) Bank to
have the ability in the event of a liquidation of any Collateral to dispose of
such Collateral in accordance with Bank's rights and remedies under this
Agreement and the other Loan Documents.

    6.11  Litigation Cooperation. From the date hereof and continuing through
the  termination of this Agreement, make available to Bank, without expense to
Bank, Co-Borrowers and their officers,  employees and agents and each
Co-Borrower's books and records, to the extent that Bank may deem them
reasonably necessary to prosecute or defend any third-party suit or proceeding
instituted by or against Bank with respect to any Collateral or relating to a
Co-Borrower.
 
 
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    6.12  Formation or Acquisition of Subsidiaries. Notwithstanding and without
limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the
time that a Co-BmTower forms any direct or indirect Subsidiary or acquires any
direct or indirect Subsidiary after the Effective Date, such Co-Borrower shall
(a) cause such new Subsidiary to provide to Bank a joinder to the Loan Agreement
to cause such Subsidiary to become a Co-Borrower hereunder, together with such
appropriate financing statements and/or Control Agreements, all in form and
substance satisfactory to Bank (including being sufficient to grant Bank a first
priority  Lien  (subject  to Permitted Liens) in and to the assets of such newly
formed or acquired Subsidiary), (b) provide to Bank appropriate certificates and
powers and financing statements, pledging all of the direct or beneficial
ownership interest in such new Subsidiary, in form and substance satisfactory to
Bank, and (c) provide to Bank all other documentation in form and substance
satisfactmy to Bank, including one or more opinions of counsel satisfactory to
Bank, which in its opinion is appropriate with respect to the execution and
delivery of the applicable documentation referred to above. Any document,
agreement, or instrument executed or issued pursuant to this Section 6.12 shall
be a Loan Document.

    6.13  Further Assurances. Execute any further instruments and take further
action as Bank reasonably requests to perfect or continue Bank's Lien in the
Collateral or to effect the purposes of this Agreement. Deliver to Bank, within
five (5) days after the same are sent or received, copies of all con-espondence,
reports, documents and other filings with any Governmental Authority regarding
compliance with or maintenance  of Governmental Approvals or Requirements of Law
or that could reasonably be expected to have a material effect on any of the
Governmental Approvals or otherwise on the operations ofCo-Bon-owers or any of
their Subsidiaries.

    7  NEGATIVE COVENANTS

    Co-Borrowers shall not do any of the following without Bank's prior written
consent:

    7.1  Dispositions. Convey, sell, lease, transfer, assign, or
otherwise  dispose  of  (collectively, "Transfer"), or permit any of their
Subsidiaries to Transfer, all or any part of their businesses or property,
except for Transfers (a) of Inventory in the ordinary course of business; (b) of
worn-out or obsolete Equipment that is, in the reasonable judgment of a
Co-Borrower, no longer economically practicable to maintain or useful in the
ordinary course of business of a Co-Borrower; (c) consisting of Permitted Liens
and Permitted Investments; (d) consisting of the sale or issuance of any stock
of a Co-BmTower permitted under Section 7.2 of this Agreement; (e) consisting of
a Co-Borrower's use or transfer of money or Cash Equivalents in the ordinary
course of its business for the payment of ordinary course business expenses in a
manner that is not prohibited by the terms of this Agreement or the other Loan
Documents; and (t) of non-exclusive licenses for the use of the property of a
Co-Borrower or its Subsidiaries in the ordinary course of business and licenses
that could not result in a legal transfer of title of the licensed property but
that may be exclusive in respects other than ten-itory and that may be exclusive
as to territory only as to discreet geographical areas outside of the United
States.

    7.2  Changes in Business,
Management,  Ownership,  or  Business  Locations.  (a) Engage   in  or permit
any of their Subsidiaries to engage in any business other than the businesses
currently engaged in by Co-Borrowers and their Subsidiaries, as applicable, or
reasonably related thereto; (b) liquidate or dissolve; or (c) (i) fail to
provide notice to Bank of any Key Person depmting from or ceasing to be employed
by a Co-Borrower within five (5) days after his departure from such Co-Bon-ower;
or (ii) enter into any transaction or series ofrelated transactions in which the
stockholders of a Co-Borrower who were not stockholders immediately prior to the
first such transaction own more than forty percent (40%) of the voting stock of
such Co-Borrower immediately after giving effect to such transaction or related
series of such transactions (other than by the sale of such Co-Borrower's equity
securities in a public offering or to venture capital or private equity
investors so long as such Co-BmTower identifies to Bank the venture capital or
private equity investors at least seven (7) Business Days prior to the closing
of the transaction and provides to Bank a description of the material terms of
the transaction).
 
    No Co-Borrower shall, without at least thhty (30) days prior written notice
to Bank: (1) add any  new offices or business locations, including warehouses
(unless such new offices or business locations contain less than One Hundred
Thousand Dollars ($100,000) in such Co-Borrower's assets or prope1ty) or deliver
any portion of the Collateral valued, individually or in the aggregate, in
excess of One Hundred Thousand Dollars ($100,000) to a bailee at a location
other than to a bailee and at a location already disclosed in the Perfection
Certificate, (2) change its jurisdiction   of  organization,  (3)
change  its  organizational  structure  or  type,  (4)  change  its  legal  name,  or
(5) change any organizational number (if any) assigned by its jurisdiction of
organization. If Co-Borrower intends to deliver any pmtion of the Collateral
valued, individually or in the aggregate, in excess of One Hundred Thousand
Dollars ($100,000) to a bailee, and Bank and such bailee are not already paities
to a bailee agreement governing both the Collateral and the location to which
Co-Borrower intends to deliver the Collateral, then Co-Borrower will first
receive the written consent of Bank, and such bailee shall execute and deliver a
bailee agreement in form and substance satisfactory to Bank.
 
 
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    7.3  Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property  of another Person (including, without limitation, by
the formation of any Subsidimy). A Subsidiary may merge or consolidate into
another Subsidiary or into a Co-Borrower.

    7.4  Indebtedness.  Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiaiy to do so, other than Permitted
Indebtedness.

    7.5  Encumbrance. Create, incur, allow, or suffer any Lien on any of its
property, or assign or convey any right to receive income, including the sale of
any Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, permit any Collateral not to be subject to the first priority security
interest granted herein, or enter into any agreement, document, instrument or
other arrangement (except with or in favor of Bank) with any Person which
directly or indirectly prohibits or has the effect of prohibiting any
Co-Borrower from assigning, mmtgaging, pledging, granting a security interest in
or upon, or encumbering any of a  Co-Borrower's  Intellectual  Property, except
as is otherwise permitted in Section 7. 1hereof and the definition of "Permitted
Liens" herein.

    7.6  Maintenance of Collateral Accounts. Maintain any
Collateral  Account  except pursuant  to the terms of Section 6.8 hereof.

    7.7  Distributions; Investments. (a) Pay any dividends or make
any  distribution  or  payment  or redeem, retire or purchase any capital stock,
provided that (i) Co-Borrower may convert any of its conve1tible securities into
other securities pursuant to the terms of such conve1tible securities or
otherwise in exchange thereof, (ii) Co-Borrower may pay dividends solely in
common stock; and (iii) Co-Borrower may repurchase the stock of former employees
or consultants pursuant to stock repurchase agreements so long as an Event of
Default does not exist at the time of such repurchase and would not exist after
giving effect to such repurchase, provided that the aggregate amount of all such
repurchases does not exceed Fifty Thousand Dollars ($50,000) per fiscal year; or
(b) directly or indirectly make any Investment (including, without limitation,
by the formation of any Subsidiary) other than Permitted Investments, or permit
any of its Subsidiaries to do so.

    7.8  Transactions with Affiliates. Directly or indirectly enter into or
permit to exist  any material transaction with any Affiliate of a Co-Bonower,
except for transactions that are in the ordinary course of a Co-Borrower's
business, upon fair and reasonable terms that are no less favorable to such
Co-Borrower than would be obtained in an arm's length transaction with a
non-affiliated Person.

    7.9  Subordinated Debt. (a) Make or permit  any payment  on
any  Subordinated  Debt, except under the terms of the subordination,
intercreditor, or other similar agreement to which such Subordinated Debt is
subject, or (b) amend any provision in any document relating to the Subordinated
Debt which would increase the amount thereof, provide for earlier or greater
principal, interest, or other payments thereon, or adversely affect the
subordination thereof to Obligations owed to Bank.

    7.10  Compliance. Become an "investment company" or a company controlled by
an "investment company", under the Investment Company Act of 1940, as amended,
or undertake as one of its important activities extending credit to purchase or
carry margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System), or use the proceeds of any Credit Extension for that
purpose; fail to (a) meet the minimum funding requirements of ERISA, (b) prevent
a Reportable Event or Prohibited Transaction as defined in ERISA, or (c) comply
with the Federal Fair Labor Standards Act, the failure of any of the conditions
in clauses (a) through (c) which could reasonably  be expected to have a
material adverse effect on Co-Borrower's business, or violate any other law or
regulation, if the violation could reasonably be expected to have a material
adverse effect  on Co­ Borrower's business or permit any Subsidiaries to do so;
withdraw or permit any Subsidiary to withdraw from participation  in, permit
partial or complete termination of, or permit the occunence of any other event
with respect to, any present pension, profit sharing and defelTed compensation
plan which could reasonably be expected to result in any liability of
Co-BolTower, including any liability to the Pension Benefit Guaranty Corporation
or its successors or any other governmental agency.

    8  EVENTS OF DEFAULT

    Any one of the following shall constitute an event of default (an "Event of
Default") under this Agreement:
 
 
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    8.1  Payment Default.  Co-Borrowers  fail to (a) make any payment  of
principal  or interest on any Credit Extension when due, or (b) pay any other
Obligations within three (3) Business Days after such Obligations are due and
payable (which three (3) Business Day cure period shall not apply to payments
due on the Revolving Line Maturity Date). During the cure period, the failure to
make or pay any payment specified under clause (b) hereunder is not an Event of
Default (but no Credit Extension will be made during the cure period);

    8.2  Covenant Default.

       (a)  Co-Borrowers fail or neglect to perform any obligation in Sections
6.2, 6.5, 6.7, 6.8, 6.9, 6.1O(b), 6.12, 6.13 or violate any covenant in Section
7; or

       (b)  Co-Borrowers fail or neglect to perform, keep, or observe any other
term, provision, condition, covenant or agreement contained in this Agreement or
any Loan Documents, and as to any default (other than those specified in this
Section 8) under such other term, provision, condition, covenant or agreement
that can be cured, have failed to cure the default within ten (10) days after
the occulTence thereof; provided, however, that ifthe default cannot by its
nature be cured within the ten (10) day period or cannot after diligent attempts
by Co-Borrowers be cured within such ten (10) day period, and such default is
likely to be cured within a reasonable time, then Co-Borrowers shall have an
additional 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 cure the default shall not be deemed an Event of Default (but no Credit
Extensions shall be made during such cure period). Cure periods provided under
this section shall not apply, among other things, to financial covenants or any
other covenants set forth in clause (a) above;

    8.3  Material Adverse Change.  A Material Adverse Change occurs;

    8.4  Attachment; Levy; Restraint on Business.

       (a)  (i) The service of process seeking to attach, by trustee or similar
process, any funds of a Co-BolTower or of any entity under the control of a
Co-BolTower (including a Subsidiary), or (ii) a notice of lien or levy is filed
against any of a Co-BotTower's assets by any Governmental Authority, and the
same under subclauses (i) and (ii) hereof are not, within ten (1O) days after
the occutTence thereof, discharged or stayed (whether through the posting of a
bond or otherwise); provided, however, no Credit Extensions shall be made during
any ten (10) day cure period; or

       (b)  (i) any material portion of a Co-BotTower's assets is attached,
seized, levied on, or comes into possession of a trustee or receiver, or (ii)
any court order enjoins, restrains, or prevents a Co-Borrower from conducting
all or any material part of its business;

    8.5  Insolvency.   (a) a Co-BotTower is unable to pay its debts (including
trade debts) as they become due or otherwise becomes insolvent; (b) a
Co-Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is
begun against a Co-Borrower and is not dismissed or stayed within thirty (30)
days (but no Credit Extensions shall be made while any of the conditions
described in clause (a) exist and/or until any Insolvency Proceeding is
dismissed);

    8.6  Other Agreements.   There is, under any agreement to which any
Co-BolTower or any Guarantor is a party with a third party or parties, (a) any
default resulting in a right by such third party or parties, whether or not
exercised, to accelerate the maturity of any Indebtedness in an amount
individually or in the aggregate in excess of Fifty Thousand Dollars ($50,000);
or (b) any breach or default by a Co-Borrower or Guarantor, the result of which
could have a material adverse effect on such Co-BoITower's or any Guarantor's
business;

    8.7  Judgments; Penalties. One or more fines, penalties or final judgments,
orders or decrees for the payment of money in an amount, individually or in the
aggregate, of at least Fifty Thousand Dollars ($50,000) (not covered by
independent third-party insurance as to which liability has been accepted by
such insurance caITier) shall be rendered against a Co-B01Tower by any
Governmental Authority, and the same are not, within ten (10) days after the
entry, assessment or issuance thereof, discharged, satisfied, or paid, or after
execution thereof, stayed or bonded pending appeal, or such judgments are not
discharged prior to the expiration of any such stay (provided that no Credit
Extensions will be made prior to the satisfaction, payment, discharge, stay, or
bonding of such fine, penalty, judgment,  order or decree);
 
 
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    8.8  Misrepresentations. A Co-Borrower or any Person acting for a
Co-Borrower makes any representation, warranty, or other statement now or later
in this Agreement, any Loan Document or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement is incotTect in any material
respect when made;

    8.9  Subordinated Debt. Any document, instrument, or agreement evidencing
any Subordinated Debt shall for any reason be revoked or invalidated or
otherwise cease to be in full force and effect, any Person shall be in breach
thereof or contest in any manner the validity or enforceability thereof or deny
that it has any further liability or obligation  thereunder, or the  Obligations
shall for  any reason be subordinated or shall not have the priority
contemplated by this Agreement or the Subordination Agreement; or

    8.10  Governmental Approvals. Any Governmental Approval shall have been (a)
revoked, rescinded, suspended, modified in an adverse manner or not renewed in
the ordinary course for a full term or (b) subject to any decision by a
Governmental Authority that designates a hearing with respect to any
applications for renewal of any of such Governmental Approval or that could
result in the Governmental Authority taking any of the actions described in
clause (a) above, and such decision or such revocation, rescission, suspension,
modification or non­ renewal (i) causes, or could reasonably be expected to
cause, a Material Adverse Change, or (ii) adversely affects the legal
qualifications of a Co-Borrower or any of its Subsidiaries to hold such
Governmental Approval in any applicable jurisdiction and such revocation,
rescission, suspension, modification or non-renewal could reasonably be expected
to  affect the status of or legal qualifications of a Co-Borrower or any of its
Subsidiaries to hold any Governmental Approval in any other jurisdiction.

    9  BANK'S RIGHTS AND REMEDIES

    9.1  Rights and Remedies. Upon the occuITence and during the continuance of
an Event of Default, Bank may, without notice or demand, do any or all of the
following:

       (a)  declare all Obligations immediately due and payable (but if an Event
of Default described in Section 8.5 occurs all Obligations are immediately due
and payable without any action by Bank);

       (b)  stop advancing money or extending credit for Co-B01Towers' benefit
under this Agreement or under any other agreement between Co-Borrowers and Bank;

       (c)  demand that Co-Borrower (i) deposit cash with Bank in an amount
equal to at least one hundred ten percent (110%) of the Dollar Equivalent of the
aggregate face amount of all Letters of Credit remaining undrawn (plus all
interest, fees, and costs due or to become due in connection therewith (as
estimated by Bank in its good faith business judgment)), to secure all of the
Obligations relating to such Letters of Credit, as collateral security for the
repayment of any future drawings under such Letters of Credit, and Co-BoITower
shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter
of credit fees scheduled to be paid or payable over the remaining term of any
Letters of Credit;

       (d)  verify the amount of, demand payment of and performance under, and
collect any Accounts and General Intangibles, settle or adjust disputes and
claims directly with Account Debtors for amounts on terms and in any order that
Bank considers advisable, and notify any Person owing a Co-Borrower money of
Bank's security interest in such funds;

       (e)  make any payments and do any acts it considers necessary or
reasonable to protect the Collateral and/or its security interest in the
Collateral. Co-Bonowers shall assemble the Collateral if Bank requests and make
it available as Bank designates. Bank may enter premises where the Collateral is
located, take  and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior
to its security interest and pay all expenses incuned. Each Co-Borrower grants
Bank a license to enter and occupy any of its premises, without charge, to
exercise any of Bank's rights or remedies;

       (f)  apply to the Obligations any (i) balances  and deposits of a
Co-Bonower it holds, or (ii) any amount held by Bank owing to or for the credit
or the account of a Co-Borrower;

       (g)  ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell the Collateral. Bank is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge, a
Co-Bonower's labels, Patents, Copyrights, mask works, rights  of use of any
name, trade secrets, trade names, Trademarks, and adve1tising matter, or any
similar property  as it pe1tains  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, Co-Borrowers'  rights under
all licenses and all franchise agreements inure to Bank's benefit;
 
 
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       (h)  place a "hold" on any account maintained with Bank and/or deliver a
notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any Control  Agreement or similar agreements providing
control of any Collateral;

       (i)  demand and receive possession of each Co-Bonower's Books; and

       (j)  exercise all rights and remedies available to Bank under the Loan
Documents or at law or equity, including all remedies provided under the Code
(including disposal of the Collateral pursuant to the terms thereof).

    9.2  Power of Attorney. Each Co-Bonower hereby inevocably appoints Bank as
its lawful attorney- in-fact, exercisable upon the occmTence and during the
continuance of an Event of Default, to: (a) endorse Co-Bonower's name on any
checks or other forms of payment or security; (b) sign Co-Borrower's name on any
invoice or bill of lading for any Account or drafts against Account Debtors; (c)
settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle,
and adjust all claims under Co-Borrower's insurance policies; (e) pay, contest
or settle any Lien, charge, encumbrance, security interest, and adverse claim in
or to the Collateral, or any judgment based  thereon,  or otherwise take any
action to terminate or discharge the same; and (f) transfer the Collateral into
the name of Bank or a third party as the Code permits. Each Co-Bonower hereby
appoints Bank as its lawful attorney-in-fact to sign Co-Bonower's name on any
documents necessary to perfect or continue the perfection of Bank's security
interest in the Collateral regardless of whether an Event of Default has
occurred until all Obligations have been satisfied in full and Bank is under no
further obligation to make Credit Extensions hereunder. Bank's foregoing
appointment as each Co-Bonower's attorney in fact, and all of Bank's rights and
powers, coupled with an interest, are in·evocable until all Obligations have
been fully repaid and performed and Bank's obligation to provide Credit
Extensions terminates.

    9.3  Protective Payments. If a Co-Borrower fails to obtain the insurance
called for by Section 6.7 or fails to pay any premium thereon or fails to pay
any other amount which such Co-Borrower is obligated to pay under this Agreement
or any other Loan Document or which may be required to preserve the Collateral,
Bank may obtain such insurance or make such payment, and all amounts so paid by
Bank are Bank Expenses and immediately due and payable, bearing interest at the
then highest rate applicable to the Obligations, and secured by the Collateral.
Bank will make reasonable efforts to provide Co-Bonowers with notice of Bank
obtaining such insurance at the time it is obtained or within a reasonable time
thereafter. No payments by Bank are deemed an agreement to make similar payments
in the future or Bank's waiver of any Event of Default.
 
    9.4  Application of Payments and Proceeds. Pursuant to the terms of Section
6.3(c), Bank shall have the right to apply in any order any funds in its
possession, whether from Co-Borrowers' account balances, payments, proceeds
realized as the result of any collection of Accounts or other disposition of the
Collateral, or otherwise, to the Obligations. Bank shall pay any surplus to
Co-Borrowers by credit to the Designated Deposit Account or to other Persons
legally entitled thereto; Co-Borrowers shall remain liable to Bank for any
deficiency. If Bank, directly or indirectly, enters into a deferred payment or
other credit transaction with any purchaser at any sale of Collateral, Bank
shall have the option, exercisable at any time, of either reducing the
Obligations by the principal amount of the purchase price or deferring the
reduction of the Obligations until the actual receipt by Bank of cash therefor.

    9.5  Bank's Liability for Collateral. So long as Bank complies with
reasonable banking practices regarding the safekeeping of the Collateral in the
possession or under the control of Bank, Bank shall not be liable or responsible
for: (a) the safekeeping of the Collateral; (b) any loss or damage to the
Collateral; (c) any diminution in the value of the Collateral; or (d) any act or
default of any carrier, warehouseman, bailee, or other Person. Co-Borrowers bear
all risk of loss, damage or destrnction of the Collateral.

    9.6  No Waiver; Remedies Cumulative. Bank's failure, at any  time  or
times,  to  require  strict performance by Co-Borrowers of any provision of this
Agreement or any other Loan Document shall not waive, affect, or diminish any
right of Bank thereafter to demand strict performance and compliance herewith or
therewith. No waiver hereunder shall be effective unless signed by the party
granting the waiver and then is only effective for the specific instance and
purpose for which it is given. Bank's rights and remedies under this Agreement
and the other Loan Documents  are cumulative. Bank has all rights and remedies
provided under the Code, by law, or in equity. Bank's exercise of one right or
remedy is not an election and shall not preclude Bank from exercising any other
remedy under this Agreement or other remedy available at law or in equity, and
Bank's waiver of any Event of Default is not a continuing waiver. Bank's delay
in exercising any remedy is not a waiver, election, or acquiescence.
 
 
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    9.7  Demand Waiver. Each Co-Borrower waives  demand, 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 held by Bank on which such
Co-Borrower is liable.

    9.8  Co-Borrower  Liability.   Either Co-Borrower may, acting singly,
request Advances hereunder. Each Co-Borrower hereby appoints the other as agent
for the other for all purposes hereunder, including with respect to requesting
Advances hereunder. Each Co-Borrower hereunder shall be jointly and severally
obligated to repay all Advances made hereunder, regardless of which Co-Borrower
actually receives said Advance, as  if  each Co-Borrower hereunder directly
received all Advances. Each Co-Borrower waives (a) any suretyship defenses
available to it under the Code or any other applicable law, including, without
limitation, the benefit of California Civil Code Section 2815 permitting
revocation as to future transactions and the benefit of California Civil Code
Sections  1432, 2809, 2810, 2819, 2839, 2845, 2847, 2848, 2849, 2850, and 2899
and 3433, and (b) any right to require  Bank  to: (i)
proceed  against  any  Co-Borrower  or any  other person;  (ii) proceed  against
or exhaust  any security; or (iii) pursue any other remedy. Bank may exercise or
not exercise any right or remedy it has against any Co-B01rower or any security
it holds (including the right to foreclose by judicial or non-judicial sale)
without affecting any Co-Borrower's liability. Notwithstanding any other
provision of this Agreement or other related document, each Co-Borrower
irrevocably waives all rights that it may have at law or in equity (including,
without limitation, any law  subrogating Co-Borrower to the rights of Bank under
this Agreement) to seek contribution, indemnification or any other form of
reimbursement from any other Co-Borrower, or any other Person now or hereafter
primarily or secondarily liable for any of the Obligations, for any payment made
by Co-B01rower with respect to the Obligations in connection with this Agreement
or otherwise and all rights that it might have to benefit from, or to
participate in, any security for the Obligations as a result of any payment made
by Co-Borrower with respect to the Obligations in connection with this Agreement
or otherwise. Any agreement providing for indemnification, reimbursement or any
other arrangement prohibited under this Section shall be null and void. If any
payment is made to a Co-Borrower in contravention of this Section, such
Co-Borrower shall hold such payment in trust for Bank and such payment shall be
promptly delivered to Bank for application to the Obligations, whether matured
or unmatured.

    10  NOTICES

    All notices, consents, requests, approvals, demands, or other communication
by any party to this Agreement or any other Loan Document must be in writing and
shall be deemed to have been validly served, given, or delivered: (a) upon the
earlier of actual receipt and three (3) Business Days after deposit in the U.S.
mail, first class, registered or certified mail return receipt requested, with
proper postage prepaid; (b) upon transmission, when sent by electronic mail or
facsimile transmission;  (c) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid; or (d) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address, facsimile number, or email address indicated
below. Bank or any Co-Borrower may change its mailing or electronic mail address
or facsimile number by giving the other party written notice thereof in
accordance with the terms of this Section 10.
 

 
If to Co-Borrowers:
 
 
AUGME TECHNOLGIES, INC. (on behalf of all Borrowers)
4400 Carillon Point
Kirkland, WA 98033
       
If to Bank:
 
 
 
 
Silicon Valley Bank
901 5th Avenue, Suite 3900
Seattle, WA 98164
Attn: Nathan Sackett
Email: nsackett@svb.com

 
    11  CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE

    California law governs the Loan Documents without regard to principles of
conflicts of law. Co-Borrowers and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in Santa Clara County, California;
provided, however, that nothing in this Agreement shall be deemed to operate to
preclude Bank from bringing suit or taking other legal action in any other
jurisdiction to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of Bank.
Each Co-Borrower expressly submits and consents in advance to such jurisdiction
in any action or suit commenced in any such court, and each Co-Bonower hereby
waives any objection that it may have based upon  lack  of personal
jurisdiction,  improper venue, or forum non conveniens and hereby consents to
the granting of such legal or equitable relief as is deemed appropriate by such
court. Each Co-Borrower hereby waives personal service of the summons,
complaints, and other process issued in such action or suit and agrees that
service of such summons, complaints, and other process may be made by registered
or ce1tified mail addressed to such Co-B01TOwer at the address set forth in, or
subsequently provided by such Co-Borrower in accordance with, Section 10 of this
Agreement and that service so made shall be deemed completed upon the earlier to
occur of such Co-Bonower's actual receipt thereof or three (3) days after
deposit in the U.S. mails, proper postage prepaid.
 
 
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    TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH  CO-BORROWER AND
BANK WAIVE ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF  ACTION ARISING
OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT.   EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

    WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES' AGREEMENT TO WAIVE THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY, ifthe above waiver of the right to a trial
by jury is not enforceable, the parties hereto agree that any and all disputes
or controversies of any nature between them arising at any time shall be decided
by a reference to a private judge, mutually selected by the patties (or, if they
cannot agree, by the Presiding Judge of the Santa Clara County, California
Superior Court) appointed in accordance with California Code of Civil Procedure
Section 638 (or pursuant to comparable provisions of federal law if the dispute
falls within the exclusive jurisdiction  of the federal courts), sitting without
a jury,  in Santa Clara County, California; and the parties hereby submit to the
jurisdiction of such court. The reference proceedings shall be conducted
pursuant to and in accordance with the provisions of California Code of Civil
Procedure Sections 638 through 645.1, inclusive. The private judge shall have
the power, among others, to grant provisional relief, including without
limitation, entering temporary restraining orders, issuing preliminary and
permanent injunctions and appointing receivers. All such proceedings shall be
closed to the public and confidential and all records relating thereto shall be
permanently sealed. If during the course of any dispute, a party desires to seek
provisional relief, but a judge has not been appointed at that point pursuant to
the judicial reference procedures, then such pmty may apply to the Santa Clara
County, California Superior Cou1t for such relief. The proceeding before the
private judge shall be conducted in the same manner as it would be before a comt
under the rules of evidence applicable to judicial proceedings. The parties
shall be entitled to discovery which shall be conducted in the same manner as it
would be before a comt under the rules of discovery applicable to judicial
proceedings. The private judge shall oversee discovery and may enforce all
discovery rules and orders applicable to judicial proceedings in the same manner
as a trial court judge. The pmties agree that the selected or appointed private
judge shall have the power to decide all issues in the action or proceeding,
whether of fact or of law, and shall report a statement of decision thereon
pursuant to California Code of Civil Procedure Section 644(a). Nothing in this
paragraph shall limit the right of any party at any time to exercise self-help
remedies, foreclose against collateral, or obtain provisional remedies. The
private judge shall  also determine all issues relating to the applicability,
interpretation, and enforceability of this paragraph.

    This Section 11 shall survive the termination of this Agreement.

    12  GENERAL  PROVISIONS

    12.1  Termination Prior
to  Revolving  Line  Maturity  Date;  Survival.  All  covenants,  representations
and wananties made in this Agreement continue in full force until this Agreement
has terminated pursuant to its terms and all Obligations have been satisfied. So
long as Co-Bonowers have satisfied the Obligations (other than inchoate
indemnity obligations, and any other obligations which, by their terms, are to
survive the termination of this Agreement, and any Obligations under Bank
Services Agreements that are cash collateralized in accordance with Section 4.1
of this Agreement), this Agreement may be te1minated prior to the Revolving Line
Maturity Date by Co-Bonowers, effective three (3) Business Days after written
notice of termination is given to Bank. Those obligations that are expressly
specified in this Agreement as surviving this Agreement's termination  shall
continue to survive notwithstanding this Agreement's termination.

    12.2  Successors and Assigns. This Agreement binds and is for the benefit of
the successors and permitted assigns of each party. No Co-Borrower may assign
this Agreement or any rights or obligations under it without Bank's prior
written consent (which may be granted or withheld in Bank's discretion). Bank
has the right, without the consent of or notice to Co-Bonowers, to sell,
transfer, assign, negotiate, or grant participation in all or any part of, or
any interest in, Bank's obligations, rights, and benefits under this Agreement
and the other Loan Documents.
 
 
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    12.3  Indemnification.
 
       (a)  General Indemnification. Co-Bonowers  agree to indemnify,  defend
and hold Bank and its directors, officers, employees, agents, attorneys, or any
other Person affiliated with or representing Bank (each, an "Indemnified
Person") harmless against: (i) all obligations, demands, claims, and liabilities
(collectively, "Claims") claimed or asserted by any other party in connection
with the transactions contemplated by the Loan Documents; and (ii) all losses or
expenses (including Bank Expenses) in any way suffered, incurred, or paid by
such Indemnified Person as a result of, following from, consequential to, or
arising from transactions between Bank and Co-Borrowers (including reasonable
attorneys' fees and expenses), except for Claims and/or losses directly caused
by such Indemnified Person's gross negligence or willful misconduct.

    This Section 12.3 shall survive until all statutes of limitation with
respect to the Claims,  losses,  and expenses for which indemnity is given shall
have run.

    12.4  Time of Essence. Time is of the essence for the performance of all
Obligations  in  this Agreement.

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

    12.6  Correction of Loan Documents.  Bank may correct patent errors and fill
in any blanks  in the Loan Documents consistent with the agreement of the
parties so long as Bank provides Co-Borrowers with written notice of such
correction and allows Co-Borrower at least ten (l0) days to object to such
correction. In the event of such objection, such correction shall not be made
except by an amendment signed by both Bank and Co-Borrower.

    12.7  Amendments  in Writing;  Waiver;  Integration.   No
purported  amendment  or modification  of any Loan Document, or waiver,
discharge or termination of any obligation under any Loan Document, shall be
enforceable or admissible unless, and only to the extent, expressly set forth in
a writing signed by the pmty against which enforcement or admission is sought.
Without limiting the generality of the foregoing, no oral promise  or statement,
nor any action, inaction, delay, failure to require performance or course of
conduct shall operate as, or evidence, an amendment, supplement or waiver or
have any other effect on any Loan Document. Any  waiver granted shall be limited
to the specific circumstance expressly described in it, and shall not apply to
any subsequent or other circumstance, whether similar or dissimilar, or give
rise to, or evidence, any obligation or commitment to grant any further waiver.
The Loan Documents represent the entire agreement about  this  subject
matter  and supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties,  and negotiations between the
parties about the subject matter of the Loan Documents merge into the Loan
Documents.
 
    12.8  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, is an original, and all taken together, constitute
one Agreement.

    12.9  Confidentiality. In handling any confidential information, Bank shall
exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (a) to Bank's
Subsidiaries or Affiliates (such Subsidiaries and Affiliates, together with
Bank, collectively, "Bank Entities"); (b) to prospective transferees or
purchasers of any interest in the Credit Extensions (provided, however, Bank
shall use its best efforts to obtain any prospective transferee's or purchaser's
agreement to the terms of this provision); (c) as required by law, regulation,
subpoena, or other order; (d) to Bank's regulators or as otherwise required in
connection with Bank's examination or audit; (e) as Bank considers appropriate
in exercising remedies under the Loan Documents; and  (t) to third-pa1ty service
providers of Bank so long as such service providers have executed a
confidentiality agreement with Bank with terms no less restrictive than those
contained herein. Confidential information does not include information that is
either: (i) in the public domain or in Bank's possession  when disclosed to
Bank, or becomes pmt of the public domain (other than as a result of its
disclosure by Bank in violation of this Agreement) after disclosure to Bank; or
(ii) disclosed to Bank by a third party, if Bank does not know that the third
party is prohibited from disclosing the information.

    Bank Entities may use anonymous forms of confidential information for
aggregate datasets, for analyses or reporting, and for any other uses not
expressly prohibited in writing by Co-Borrower. The provisions of the
immediately preceding sentence shall survive termination of this Agreement.
 
 
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    12.10  Attorneys' Fees, Costs and Expenses. In any action or proceeding
between Co-Borrowers and Bank arising out of or relating to the Loan Documents,
the prevailing party shall be entitled to recover its reasonable attorneys' fees
and other costs and expenses incmTed, in addition to any other relief to which
it may be entitled.

    12.11  Electronic Execution of Documents. The words "execution," "signed,"
"signature" and words of like import in any Loan Document shall be deemed to
include electronic signatures or the keeping of records in electronic form, each
of which shall be of the same legal effect, validity and enforceability as a
manually executed signature or the use of a paper-based recordkeeping systems,
as the case may be, to the extent and as provided for in any applicable law,
including, without limitation, any state law based on the Uniform Electronic
Transactions Act.

    12.12  Captions. The headings used in this Agreement are for convenience
only and shall not affect the interpretation of this Agreement.

    12.13  Construction of Agreement. The parties mutually  acknowledge  that
they  and  their  attorneys have participated in the preparation and negotiation
of this Agreement. In cases of uncertainty this Agreement shall be construed
without regard to which of the parties caused the uncertainty to exist.

    12.14  Relationship. The relationship of the pmties to this Agreement is
determined solely by the provisions of this Agreement. The parties do not intend
to create any agency, partnership, joint venture,  trust, fiduciary or other
relationship with duties or incidents different from those of parties to an
arm's-length contract.

    12.15  Third Parties. Nothing in this Agreement, whether express or implied,
is intended to: (a) confer any benefits, rights or remedies under or by reason
of this Agreement on any persons other than the express parties to it and their
respective permitted successors and assigns; (b) relieve or discharge the
obligation or liability of any person not an express party to this Agreement; or
(c) give any person not an express party to this Agreement any right of
subrogation or action against any party to this Agreement.

    13  DEFINITIONS

    13.1  Definitions. As used in the Loan Documents, the word "shall" is
mandatory, the word "may" is permissive, the word "or" is not exclusive, the
words "includes" and "including" are not  limiting,  the  singular includes the
plural, and numbers denoting amounts that are set off in brackets are negative.
As used in this Agreement, the following capitalized terms have the following
meanings:

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

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

    "Advance" or "Advances" means a revolving credit loan (or revolving credit
loans) under the Revolving Line.

    "Affiliate" is, with respect to any Person, each other Person that owns or
controls directly or indirectly the Person, any Person that controls or is
controlled by or is under common control with the Person, and each of that
Person's senior executive officers, directors, partners and, for any Person that
is a limited liability company, that Person's managers and members.

    "Agreement" is defined in the preamble hereof.

    "Authorized Signer" is any individual listed in a Co-BotTower's BotTowing
Resolution who is authorized to execute the Loan Documents, including any
Advance request, on behalf of such Co-BotTower.

    "Availability Amount" is (a) the lesser of (i) the Revolving Line or (ii)
the amount available under the Borrowing Base minus (b) the outstanding
principal balance of any Advances.
 
 
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    "Bank" is defined in the preamble hereof.

    "Bank Entities" is defined in Section 12.9.

    "Bank Expenses" are all audit fees and expenses, costs, and expenses
(including reasonable attorneys' fees and expenses) for preparing, amending,
negotiating, administering, defending and enforcing the Loan Documents
(including, without limitation, those incurred in connection with appeals or
Insolvency  Proceedings) or otherwise incutTed with respect to Co-Borrowers.

    "Bank Services" are any products, credit services, and/or financial
accommodations previously, now, or hereafter provided to Co-BotTower or any of
its Subsidiaries by Bank or any Bank Affiliate, including, without limitation,
any letters of credit, cash management  services (including, without limitation,
merchant  services, direct deposit of payroll, business credit cards, and check
cashing services), interest rate swap arrangements, and foreign exchange
services as any such products or services may be identified in Bank's various
agreements related thereto (each,  a  "Bank Services Agreement").

    "Borrowing Base" is ninety percent (90%) of Eligible Accounts, as determined
by  Bank  from Co-Borrowers' most recent Transaction Report; provided, however,
that at all times after the earlier of (i) nine (9)months from the Effective
Date or (ii) January 31, 2014, such percentage shall be reduced to
eighty  percent (80%) and provided fmther that Bank has the right to decrease
the foregoing percentages in its good faith business judgment to mitigate the
impact of events, conditions, contingencies, or risks which may adversely affect
the Collateral or its value.

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

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

    "Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than one (1) year from the date of
acquisition; (b) commercial paper maturing no more than one ( 1) year after its
creation and having the highest rating from either Standard & Poor's Ratings
Group or Moody's Investors Service, Inc.; (c) Bank's certificates of deposit
issued maturing no more than one (I) year after issue; and (d) money market
funds at least ninety-five percent (95%) of the assets of which constitute Cash
Equivalents of the kinds described in clauses (a) tln·ough (c) of this
definition.

    "Claims" is defined in Section 12.3.

    "Co-Borrower(s)" is defined in the preamble hereof.

    "Co-Borrower's Books" are all of a Co-Borrower's books and records including
ledgers, federal and state tax returns, records regarding such Co-Borrower's
assets or liabilities, the Collateral, business operations  or financial
condition, and all computer programs or storage or any equipment containing such
information.

    "Code" is the Uniform Commercial Code, as the same may, from time to time,
be enacted and in effect in the State of California; provided, that, to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in A1ticle or Division 9 shall
govern; provided fmther, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, or priority of, or
remedies with respect to, Bank's Lien on any Collateral is governed  by the
Uniform Commercial Code  in  effect in a jurisdiction other than the State of
California, the term "Code" shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereofrelating to such attachment, perfection, priority, or remedies and for
purposes of definitions relating to such provisions.

    "Collateral" is any and all properties, rights and assets of Co-Borrowers
described on Exhibit A. "Collateral Account" is any Deposit Account,  Securities
Account, or Commodity Account.
 
 
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    "Commodity Account" is any "commodity account" as defined  in the Code with
such additions to such term as may hereafter be made.

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

    "Contingent Obligation" is, for any Person, any direct or
indirect  liability,  contingent  or  not,  of  that Person for (a) any
indebtedness, lease, dividend, letter of credit or other obligation of another
such as an obligation, in each case, directly or indirectly guaranteed,
endorsed, co-made, discounted or sold with recourse by that Person, or for which
that Person is directly or indirectly liable; (b) any obligations for undrawn
letters of credit for the account  of that Person;  and  (c)
all  obligations  from  any  interest rate,  currency  or  commodity  swap
agreement, interest rate cap or collar agreement, or other  agreement or
arrangement designated to protect a Person against fluctuation in interest
rates, currency exchange rates or commodity prices; but "Contingent Obligation"
does not include endorsements in the ordinary course of business. The amount of
a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable,
the maximum reasonably anticipated liability for it determined by the Person in
good faith; but the amount may not exceed the maximum of the obligations under
any guarantee or other support arrangement.

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

    "Copyrights" are any and all  copyright rights, copyright applications,
copyright  registrations and like protections in each work of authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret.

    "Credit Extension" is any Advance or any other extension of credit by Bank
for Co-Borrowers' benefit.

    "Default Rate" is defined in Section 2.5(b).

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

    "Designated  Deposit  Account" is the multicurrency account denominated in
Dollars, account number __________, maintained by a Co-Borrower with Bank.

    "Dollars," "dollars" or use of the sign"$" means only lawful money of the
United States and not any other currency, regardless of whether that currency
uses the "$" sign to denote its currency or may be readily converted into lawful
money of the United States.

    "Dollar Equivalent" is, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in a Foreign Currency, the equivalent amount therefor in Dollars as
determined by Bank at such time on the basis of the then-prevailing rate of
exchange in San Francisco, California, for sales of the Foreign CuITency for
transfer to the country issuing such Foreign Currency.

    "Effective Date" is defined in the preamble hereof.
 
 
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    "Eligible Accounts" means Accounts which arise in the ordinary course of a
Co-Borrower's business that meet all Co-Borrower's representations and
warranties in Section 5.3. Bank reserves the right at any time after the
Effective Date to adjust any of the criteria set forth below and to establish
new criteria in its good faith business judgment.  Unless Bank otherwise agrees
in writing, Eligible Accounts shall not include:

       (a)  Accounts for which the Account Debtor is a Co-Borrower's Affiliate,
officer, employee, or agent;

       (b)  Accounts that the Account Debtor has not paid within ninety (90)
days of invoice date regardless of invoice payment period terms;

       (c)  Accounts with credit balances over ninety (90) days from invoice
date;

       (d)  Accounts owing from an Account Debtor, including Affiliates, whose
total obligations to a Co-Borrower exceed twenty-five percent (25%) of all
Accounts, for the amounts that exceed that percentage, unless Bank approves in
writing;

       (e)  Accounts  owing from an Account Debtor if fifty percent  (50%) or
more of the Accounts owing from such Account Debtor have not been paid within
ninety (90) days of invoice date;

       (f)  Accounts owing from an Account Debtor which does not have its
principal place of business in the United States unless such Accounts are
otherwise Eligible Accounts and (i) covered in full by credit insurance
satisfactory to Bank, less any deductible, (ii) supported by letter(s) of credit
acceptable to Bank, or (iii) that Bank otherwise approves of in writing;

       (g)  Accounts billed from and/or payable to a Co-Borrower outside of the
United States unless Bank has a first priority, perfected security interest or
other enforceable Lien in such Accounts under all applicable laws, including
foreign laws (sometimes called foreign invoiced accounts);

       (h)  Accounts owing from an Account Debtor to the extent that a
Co-Borrower is indebted or obligated in any manner to the Account Debtor (as
creditor, lessor, supplier or otherwise -  sometimes  called  "contra" accounts,
accounts payable, customer deposits or credit accounts);

       (i)  Accounts owing from an Account Debtor which is a United States
government entity or any depmiment, agency, or instrumentality thereof unless a
Co-Borrower has assigned its payment rights to Bank and the assignment has been
acknowledged under the Federal Assignment of Claims Act of 1940, as amended;

       (j)  Accounts for demonstration or promotional equipment, or in which
goods are consigned, or sold on a "sale guaranteed", "sale or return", "sale on
approval", or other terms if Account Debtor's payment may be conditional;

       (k)  Accounts owing from an Account Debtor where goods or services have
not yet been rendered to the Account Debtor (sometimes called memo billings or
pre-billings);

       (l)  Accounts subject to contractual arrangements between a Co-Bonower
and an Account  Debtor where payments shall be scheduled or due according to
completion or fulfillment requirements where the Account Debtor has a right of
offset for damages suffered as a result of such Co-Borrower's failure to perform
in accordance with the contract (sometimes called contracts accounts receivable,
progress  billings,  milestone  billings,  or fulfillment contracts);

       (m)  Accounts owing from an Account Debtor the amount of which may be
subject to withholding based on the Account Debtor's satisfaction of a
Co-Borrower's complete performance (but only to the extent of the amount
withheld; sometimes called retainage billings);

       (n)  Accounts subject to trust provisions, subrogation rights of a
bonding company, or a statutory trust;

       (o)  Accounts owing from an Account Debtor that has been invoiced for
goods that have not been shipped to the Account Debtor unless Bank, the relevant
Co-Borrower, and the Account Debtor have entered into an agreement acceptable to
Bank wherein the Account Debtor acknowledges that (i) it has title to and has
ownership of the goods wherever located, (ii) a bona fide sale of the goods has
occurred, and (iii) it owes payment for such goods in accordance with invoices
from such Co-Borrower (sometimes called "bill and hold" accounts);
 
 
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       (p)  Accounts for which the Account Debtor has not been invoiced;

       (q)  Accounts that represent non-trade receivables or that are derived by
means other than in the ordinary course of a Co-Borrower's business;
 
       (r)  Accounts for which a Co-Borrower has permitted Account Debtor's
payment to extend beyond 90 days;

       (s) 
Accounts  arising  from  chargebacks,  debit  memos  or  other  payment  deductions  taken  by  an
Account Debtor;

       (t)  Accounts arising from product returns and/or exchanges (sometimes
called "warranty" or "RMA" accounts);

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

       (v)  Accounts for which Bank in its good faith business judgment
determines collection to be doubtful, including, without limitation, accounts
represented by "refreshed" or "recycled" invoices.

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

    "ERISA" is the Employee Retirement Income Security Act of 1974, and its
regulations.

    "Event of Default" is defined in Section 8.

    "Exchange Act" is the Securities Exchange Act of 1934, as amended.

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

    "Funding Date" is any date on which a Credit Extension is made to or for the
account of Co-Borrowers which shall be a Business Day.

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

    "General Intangibles" is all "general intangibles" as defined in the Code in
effect on the date hereof with such additions to such term as may hereafter be
made, and includes without limitation, all Intellectual Property, claims, income
and other tax refunds, security and other deposits, payment  intangibles,
contract rights, options to purchase or sell real or personal property, rights
in all litigation presently or hereafter pending (whether in contract, tort or
otherwise), insurance policies (including without limitation key man, property
damage, and business interruption insurance), payments of insurance and rights
to payment of any kind.

    "Governmental Approval" is any consent, authorization, approval, order,
license, franchise, permit, certificate, accreditation, registration, filing or
notice, of, issued by, from or to, or other act by or in respect of, any
Governmental Authority.

    "Governmental Authority" is any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
 
 
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    "Guarantor" is any Person providing a Guaranty in favor of Bank.

    "Guaranty" is any guarantee of all or any part of the Obligations, as the
same may from time to time be amended, restated, modified or otherwise
supplemented.

    "Indebtedness" is (a) indebtedness for borrowed money or the deferred price
of property or services, such as reimbursement and other obligations for surety
bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations, and (d)
Contingent Obligations.

    "Indemnified Person" is defined in Section 12.3.

    "Initial Audit" is Bank's inspection of Co-Borrowers' Accounts, the
Collateral, and Co-Borrowers'  Books.

    "Insolvency Proceeding" is any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

    "Intellectual Property" means, with respect to any Person, means all of such
Person's right, title, and interest in and to the following:

       (a)  its Copyrights, Trademarks and Patents;

       (b)  any and all trade secrets and trade secret rights, including,
without limitation, any rights to unpatented inventions, know-how, operating
manuals;

       (c)  any and all source code;

       (d)  any and all design rights which may be available to such Person;

       (e)  any and all claims for damages by way of past, present and future
infringement of any of the foregoing, 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; and

       (f)  all amendments, renewals and extensions of any of the Copyrights,
Trademarks or Patents.

    "Inventory" is all "inventory" as defined in the Code in effect on the date
hereof with such additions to such term as may hereafter be made, and includes
without limitation all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products, including without
limitation such inventory as is temporarily out of a Co-Borrower's custody or
possession or in transit and including any returned goods and any documents of
title representing any of the above.

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

    "Key Person" is any of a Co-Borrower's (a) Chief Executive Officer, who is
Ivan Braiker as  of the Effective Date, and (b) Chief Financial Officer, who is
Tom Virgin as of the Effective Date.

    "Letter of Credit" is a standby or commercial letter of credit issued by
Bank upon request of a Co-Borrower based upon an application, guarantee,
indemnity, or similar agreement.

    "Lien" is a claim, mmtgage, deed of trust, levy, charge, pledge, security
interest or other encumbrance of any kind, whether voluntarily incurred or
arising by operation of law or otherwise against any property.
 
 
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    "Loan Documents" are, collectively, this Agreement and any schedules,
exhibits, certificates, notices, and any other documents related to this
Agreement, any subordination agreement, any note, or notes or  guaranties
executed by a Co-Borrower or any Guarantor, and any other present or future
agreement by a Co-Borrower and/or any Guarantor with or for the benefit of Bank
in  connection with this Agreement, all as amended, restated, or otherwise
modified.

    "Material Adverse Change" is (a) a material impairment in the perfection or
priority of Bank's Lien in the Co!lateral or in the value of such Collateral;
(b) a material adverse change in the business, operations, or condition
(financial or otherwise) ofa Co-Borrower; (c) a material impairment of the
prospect ofrepayment of any portion of the Obligations; or (d) Bank determines,
based upon information available to it and in its reasonable judgment,  that
there is a reasonable likelihood that a Co-Borrower shall fail to comply with
one or more of the financial covenants in Section 6 during the next succeeding
financial reporting period.

    "Monthly Financial Statements" is defined in Section 6.2(c).

    "Net Income" means, as calculated on a consolidated basis for Co-Borrowers
for any period as at any date of determination, the net profit (or loss), after
provision for taxes, of Co-Borrowers for such period taken as a single
accounting period.

    "Obligations" are Co-Borrowers' obligations to pay when due any debts,
principal, interest, fees, Bank Expenses, and other amounts Co-Borrowers owe
Bank now or later, whether under this Agreement, the other Loan Documents, or
otherwise, including, without limitation, all obligations relating to letters of
credit (including reimbursement obligations for drawn and undrawn letters of
credit), cash management services, and foreign exchange contracts, if any, and
including interest accruing after Insolvency Proceedings begin and debts,
liabilities, or obligations of Co-Borrowers assigned to Bank, and to perform
Co-Borrowers' duties under the Loan Documents.

    "Operating Documents" are, for any Person, such Person's formation
documents, as certified by the Secretary of State (or equivalent agency) of such
Person's jurisdiction of organization  on a date that is no earlier than thirty
(30) days prior to the Effective Date, and, (a) if such Person is a corporation,
its bylaws in cmrent form,
if such Person is a limited liability company, its limited liability company
agreement (or similar agreement), and
if such Person is a pattnership, its partnership agreement (or similar
agreement), each of the foregoing with all current amendments or modifications
thereto.

    "Overadvance" is defined in Section 2.2.

    "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.

    "Perfection Certificate" is defined in Section 5.1.

    "Permitted Indebtedness" is:

       (a)  Co-Borrowers' Indebtedness to Bank under this Agreement and the
other Loan Documents;

       (b)  Indebtedness existing on the Effective Date and shown on the
Perfection Ce1tificate;

       (c)  Subordinated Debt;

       (d)  unsecured Indebtedness to trade creditors incurred in the ordinary
course of business;

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

       (f)  Indebtedness  secured by Liens permitted under clauses (a) and (c)
of the definition of"Permitted Liens" hereunder; and

       (g)  extensions, refinancings, modifications, amendments and restatements
of any items of Permitted Indebtedness (a) through (t) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose more burdensome terms upon a Co-Borrower or its Subsidiary, as the
case may be.
 
 
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    "Permitted Investments" are:

       (a)  Investments (including, without limitation, Subsidiaries) existing
on the Effective Date and shown on the Perfection Certificate;

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

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

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

       (e)  Investments accepted in connection with Transfers permitted by
Section 7. 1;

       (f)  Investments consisting of the creation of a Subsidiary for the
purpose of consummating a merger transaction permitted by Section 7.3 of this
Agreement, which is otherwise a Permitted Investment;

       (g)  Investments (i) by a Co-Borrower in Subsidiaries not to exceed One
Hundred Thousand Dollars ($100,000) in the aggregate in any  fiscal year and
(ii) by Subsidiaries in other Subsidiaries not to exceed  One Hundred Thousand
Dollars ($100,000) in the aggregate in any fiscal year or in a Co-Borrower;

       (h)  Investments consisting of (i) travel advances and employee
relocation loans and other employee loans and advances in the ordinary course of
business, and (ii) loans to employees, officers or directors relating to the
purchase of equity securities of a Co-B01TOwer or its Subsidiaries pursuant to
employee stock purchase plans or agreements approved by such Co-Borrower's Board
of Directors;

       (i)  Investments (including debt obligations) received in connection with
the bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business; and

       (j)  Investments consisting of notes receivable of, or prepaid royalties
and other credit extensions, to customers and suppliers who are not Affiliates,
in the ordinary course of business; provided that this paragraph G) shall not
apply to Investments ofa Co-Borrower in any Subsidiary.
 
 
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    "Permitted Liens" are:

       (a)  Liens existing on the Effective Date and shown on the Perfection
Ce1iificate or arising under this Agreement and the other Loan Documents;

       (b)  Liens for taxes, fees, assessments or other government charges or
levies, either (i) not due and payable or (ii) being contested in good faith and
for which a Co-Borrower maintains adequate reserves on its Books, provided that
no notice of any such Lien has been filed or recorded under the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations adopted thereunder;

       (c)  purchase money Liens (i) on Equipment acquired or held by a
Co-Borrower incurred for financing the acquisition of the Equipment securing no
more than One Hundred Thousand Dollars ($100,000) in the aggregate amount
outstanding, or (ii) existing on Equipment when acquired, if the Lien is
confined to the property and improvements and the proceeds of the Equipment;

       (d)  Liens of carriers, warehousemen, suppliers, or other Persons that
are possessory in nature arising in the ordinary course of business so long as
such Liens attach only to Inventory, securing liabilities in the aggregate
amount not to exceed One Hundred Thousand Dollars ($100,000) and which are not
delinquent or remain payable without penalty or which are being contested in
good faith and by appropriate proceedings which proceedings have the effect of
preventing the forfeiture or sale of the prope1iy subject thereto;

       (e)  Liens to secure payment of workers' compensation, employment
insurance, old-age  pensions, social security and other like obligations
incurred in the ordinary course of business (other than Liens imposed by ERISA);

       (f)  Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase;

       (g)  leases or subleases ofreal property granted in the ordinary course
of a Co-Borrower's business (or, if referring to another Person, in the ordinary
course of such Person's business), and leases, subleases, non-exclusive licenses
or sublicenses of personal property  (other than Intellectual
Property)  granted  in the ordinary course of a
Co-Borrower's business (or, if referring to another Person, in the ordinary
course of such Person's business), if the
leases, subleases, licenses and sublicenses do not prohibit granting Bank a
security interest therein;

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

       (i)  Liens arising from attachments or judgments, orders, or decrees in
circumstances not constituting an Event of Default under Sections 8.4 and 8.7.

    "Person" is any individual, sole proprietorship, pattnership, limited
liability company, joint  venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

    "Prime Rate" is the rate of interest per annum from time to time published
in the money rates section of The Wall Street Journal or any successor
publication thereto as the "prime rate" then in effect; provided that if such
rate of interest, as set forth from time to time in the money rates section of
The Wall Street Journal, becomes unavailable for any reason as determined by
Bank, the "Prime Rate" shall mean the rate of interest per annum announced by
Bank as its prime rate in effect at its principal office in the State of
California (such Bank announced Prime Rate not being intended to be the lowest
rate of interest charged by Bank in connection with extensions of credit to
debtors).

    "Registered Organization" is any "registered organization" as defined in the
Code with such additions to such term as may hereafter be made.
 
 
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    "Regulatory Change" means, with respect to Bank, any change on or after the
date of this Agreement in United States federal, state, or foreign laws or
regulations, including Regulation D, or the adoption or making on or after such
date of any interpretations, directives, or requests  applying to a class of
lenders including Bank, of or under any United States federal or state, or any
foreign laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.

    "Requirement of Law" is as to any Person, the organizational or governing
documents of such Person, and any law (statutory or common), treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

    "Reserves" means, as of any date of determination, such amounts as Bank may
from time to time establish and revise in its good faith business judgment,
reducing the amount of  Advances  and  other  financial accommodations which
would otherwise be available to Co-Borrowers (a)
to  reflect  events,  conditions, contingencies or risks which, as determined by
Bank in its good faith business judgment, do or may adversely affect the
Collateral or any other prope1ty which is security for the Obligations or its
value (including without limitation any increase in delinquencies of Accounts),
(ii) the assets, business or prospects of a Co-Borrower or any Guarantor, or
(iii) the security interests and other rights of Bank in the Collateral
(including the enforceability, perfection and priority thereof); or (b) to
reflect Bank's reasonable belief that any collateral report
or  financial  information furnished by or on behalf of a Co-Borrower or any
Guarantor to Bank is or may have been incomplete, inaccurate or misleading in
any material respect; or (c) in respect of any state of facts which Bank
determines constitutes an Event of Default or may, with notice or passage of
time or both, constitute an Event of Default.

    "Responsible Officer" is any of the Chief Executive Officer, President,
Chief Financial Officer and Controller of a Co-Borrower.

    "Restricted License" is any material license or other agreement with respect
to which a Co-Borrower is the licensee (a) that prohibits or otherwise restricts
a Co-Borrower from granting a security interest in such Co-Borrower's interest
in such license or agreement or any other property, or (b) for which a default
under or termination of could interfere with the Bank's right to sell any
Collateral.

    "Revolving Line" is an aggregate principal amount equal to Five Million
Dollars ($5,000,000).

    "Revolving Line Maturity Date" is May_, 2015.

    "SEC" shall mean the Securities and  Exchange Commission, any successor
thereto, and  any analogous Governmental Authority.

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

    "Streamline Period" is, on and after the Effective Date, provided no Event
of Default has occurred and is continuing, the period (a) commencing on the
first day of the month following the day that a Co-Borrower provides to Bank a
written repmt that such Co-Borrower has, for each consecutive day in the
immediately preceding fiscal quarter umestricted cash at Bank plus the unused
Availability Amount, as determined by Bank in its discretion, in an amount at
all times greater than Four Million Dollars ($4,000,000) (the "Streamline
Balance"); and (b) terminating on the earlier to occur of (i) the occurrence of
an Event of Default, and (ii) the first day thereafter in which such Co-Borrower
fails to maintain the Streamline Balance, as determined by Bank in its
discretion. Upon  the termination of a Streamline Period, Co-Borrower must
maintain the Streamline Balance each consecutive day for one (1) fiscal qumter
as determined by Bank in its discretion, prior to entering into a subsequent
Streamline Period. A Co-Borrower shall give Bank prior written notice of such
Co-Borrower's election to enter into any  such Streamline Period.

    "Subordinated Debt" is indebtedness incurred by a Co-Borrower subordinated
to all  of  such Co-Borrower's now or hereafter indebtedness to Bank (pursuant
to a subordination, intercreditor, or other similar agreement in form and
substance satisfactory to Bank entered into between Bank and the other
creditor), on terms acceptable to Bank.
 
 
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    "Subsidiary" is, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, pmtnership or other entity are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless the context otherwise requires,
each reference to a Subsidiary herein shall be a reference to a Subsidiary of a
Co-Borrower.

    "Tangible Net Worth" is, on any date, the consolidated total assets of
Co-Borrowers minus (a) any net intangible assets (including capitalized software
development costs), minus (b) Total Liabilities (excluding  any deferred tax
liabilities that are directly a result of the valuation of the intangible
assets), plus (c) Subordinated Debt.

    "Total Liabilities" is on any day, obligations that should, under GAAP,
be  classified as liabilities on Co-Borrower's consolidated balance sheet,
including 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 a Co-Borrower connected
with and symbolized by such trademarks.

    "Transaction Report" is that certain report of transactions and schedule of
collections in the form attached hereto as Exhibit B.

    "Transfer" is defined in Section 7.1.

    "Unused Revolving Line Facility Fee" is defined in Section 2.6(b).

[Balance of Page Intentionally Left Blank]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date.

CO-BORROWERS:
 
AUGME TECHNOLOGIES, INC.
 
By:  /s/ Ivan Braiker
Name:  Ivan Braiker
Title:  CEO
 
 
HIPCRICKET, INC.
 
By:  /s/ Ivan Braiker
Name:  Ivan Braiker
Title:  CEO
 
 
GEOS COMMUNICATIONS IP HOLDINGS, INC.
 
By:  /s/ Ivan Braiker
Name:  Ivan Braiker
Title:  CEO
 
 
BANK:
 
SILICON VALLEY BANK
 
By:  /s/ Nathan Sackett
Name:  Nathan Sackett
Title:  VP
 
[Signature Page to Loan and Security Agreement]

 
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EXHIBIT A
 
COLLATERAL DESCRIPTION
 
    The Collateral consists of all of Co-Borrowers'  right, title and
interest in and to the following personal property:

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

    all Co-Borrower's Books relating to the foregoing, and any and all claims,
rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and  improvements  to  and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

    Notwithstanding the foregoing, the Collateral does not include any
Intellectual Property; provided, however, the Collateral shall include all
Accounts and all proceeds of Intellectual Property. If a judicial authority
(including a U.S. Bankruptcy Court) would hold that a security interest in the
underlying Intellectual Property is necessary to have a security interest in
such Accounts and such property that are proceeds of Intellectual Property, then
the Collateral shall automatically, and effective as of the Effective Date,
include the Intellectual Property to the extent necessary to pennit perfection
of Bank's security interest in such Accounts and such other prope1ty of Co­
Borrowers that are proceeds of the Intellectual Property.

    Pursuant to the terms of a certain negative pledge arrangement with Bank,
Co-Borrowers have agreed not to encumber any of its Intellectual Property
without Bank's prior written consent.