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

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
TANISYS TECHNOLOGY, INC.

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

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

TABLE OF CONTENTS

  1    ACCOUNTING AND OTHER TERMS   4   2    LOAN AND TERMS OF PAYMENT  4  
      2.1    Advances  4         2.2    Overadvances  4         2.3    Interest
Rate, Payments  5         2.4    Fees  5   3    CONDITIONS OF LOANS  6  
      3.1    Conditions Precedent to Initial Advance   6  
      3.2    Conditions Precedent to all Advances   6   4    CREATION OF
SECURITY INTEREST  6         4.1    Grant of Security Interest  6  
5    REPRESENTATIONS AND WARRANTIES  6         5.1    Due Organization and
Authorization   6         5.2    Collateral  6         5.3    Litigation  7  
      5.4    No Material Adverse Change in Financial Statements  7  
      5.5    Solvency  7         5.6    Regulatory Compliance  7  
      5.7    Subsidiaries  7         5.8    Full Disclosure  7  
6    AFFIRMATIVE COVENANTS  8         6.1    Government Compliance  8  
      6.2    Financial Statements, Reports, Certificates  8  
      6.3    Inventory; Returns  8         6.4    Taxes  8  
      6.5    Insurance  9         6.6    Primary Accounts  9  
      6.7    Financial Covenants  9         6.8    Registration of Intellectual
Property Rights  9         6.9    Further Assurances  9   7    NEGATIVE
COVENANTS  9         7.1    Dispositions  9         7.2    Changes in Business,
Ownership, Management or Business Locations  10         7.3    Mergers or
Acquisitions  10         7.4    Indebtedness  10         7.5    Encumbrance  10
        7.6    Distributions; Investments  10         7.7    Transactions with
Affiliates  10         7.8    Subordinated Debt  10         7.9    Compliance 
10   8    EVENTS OF DEFAULT  11         8.1    Payment Default  11  
      8.2    Covenant Default  11         8.3    Material Adverse Change  11  
      8.4    Attachment  11         8.5    Insolvency  11         8.6    Other
Agreements  11         8.7    Judgments  12         8.8    Misrepresentations 
12  

2

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

9    BANK’S RIGHTS AND REMEDIES  12         9.1    Rights and Remedies  12  
      9.2    Power of Attorney  12         9.3    Accounts Collection  13  
      9.4    Bank Expenses  13         9.5    Bank’s Liability for Collateral  
13         9.6    Remedies Cumulative  13         9.7 Demand Waiver  13  
10   NOTICES  13   11   CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER  13  
12   GENERAL PROVISIONS  14          12.1    Successors and Assigns  14  
       12.2    Indemnification  14          12.3    Time of Essence  14  
       12.4    Severability of Provision  14          12.5    Amendments in
Writing, Integration  14          12.6    Counterparts  14  
       12.7    Survival  14          12.8    Confidentiality  15  
       12.9    Effect of Amendment and Restatement  15  
       12.10    Attorneys’ Fees, Costs and Expenses  15   13   DEFINITIONS  15  
        13.1    Definitions  15  

3

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

          This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated September
19, 2000, between SILICON VALLEY BANK (“Bank”), whose address is 3003 Tasman
Drive, Santa Clara, California 95054 with a loan production office located at
9020 Capital of Texas Hwy. North, Austin, Texas 78759 and TANISYS TECHNOLOGY,
INC. (“Borrower”), whose address is 12201 Technology Boulevard, Suite 125,
Austin, Texas 78727 provides the terms on which Bank will lend to Borrower and
Borrower will repay Bank. The parties agree as follows:

RECITALS

           A.    Bank and Borrower are parties to that certain Accounts
Receivable Financing Agreement dated April 3, 2000, as amended (collectively,
the “Original Agreement”).

           B.   Borrower and Bank desire in this Agreement to set forth their
agreement with respect to a working capital loan and to amend and restate in its
entirety without novation the Original Agreement in accordance with the
provisions herein.

1       ACCOUNTING AND OTHER TERMS

          Accounting terms not defined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term “financial statements” includes the notes and schedules. The terms
“including” and “includes” always mean “including (or includes) without
limitation,” in this or any Loan Document. This Agreement shall be construed to
impart upon Bank a duty to act reasonably at all times.

2       LOAN AND TERMS OF PAYMENT

2.1    ADVANCES.

          Borrower will pay Bank the unpaid principal amount of all Advances and
interest on the unpaid principal amount of the Advances.

2.1.1 REVOLVING ADVANCES.

          (a) Bank will make Advances not exceeding the lesser of (A) the
Committed Revolving Line or (B) the Borrowing Base. Amounts borrowed under this
Section may be repaid and reborrowed during the term of this Agreement.

          (b) To obtain an Advance, Borrower must notify Bank by facsimile or
telephone by 3:00 p.m. Pacific time on the Business Day the Advance is to be
made. Borrower must promptly confirm the notification by delivering to Bank the
Payment/Advance Form attached as Exhibit B. Bank will credit Advances to
Borrower’s deposit account. Bank may make Advances under this Agreement based on
instructions from a Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations which have become
due. Bank may rely on any telephone notice given by a person whom Bank believes
is a Responsible Officer or designee. Borrower will indemnify Bank for any loss
Bank suffers due to such reliance.

          (c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Advances are immediately payable.

2.2    OVERADVANCES.

          If Borrower’s Obligations under Section 2.1.1 exceed the lesser of
either (i) the Committed Revolving Line or (ii) the Borrowing Base, Borrower
must immediately pay Bank the excess.

4

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

2.3    INTEREST RATE, PAYMENTS.

          (a) Interest Rate. Advances accrue interest on the outstanding
principal balance at a per annum rate of 1.50 percentage points above the Prime
Rate, decreasing to a per annum rate of 1.00 percentage point above the Prime
Rate, effective the first day of the month following Borrower maintaining a
Quick Ratio (as described in Section 6.7) of at least 1.50 to 1.00 for 3
consecutive months. The interest rate increases or decreases when the Prime Rate
changes. Interest is computed on a 360 day year for the actual number of days
elapsed. Bank will not compute the interest in a manner that would cause Bank to
contract for, charge or receive interest that would exceed the Maximum Lawful
Rate or the Maximum Lawful Amount. After an Event of Default, Obligations accrue
interest at the Default Interest Rate. The Default Interest Rate is, at the
Bank’s options, (i) the Maximum Lawful Rate, if the Maximum Lawful rate is
established by applicable law, or (ii) the interest rate applicable immediately
prior to the occurrence of the Event of Default plus 5 percentage points, if no
Maximum Lawful Rate law has been established by applicable law; or (iii) 18% per
annum; or (iv) such lesser rate of interest as Bank in its sole discretion may
choose to charge; but in no event more than the Maximum Lawful Rate.

          (b) Spreading of Interest. Due to irregular periodic balances of
principal, the variable nature of the interest rate, or prepayment, the total
interest that will accrue under this Agreement cannot be determined in advance.
Bank does not intend to contract for, charge or receive more than the Maximum
Lawful Rate or Maximum Lawful Amount permitted by applicable state or federal
law, and to prevent such an occurrence Bank and Borrower agree that all amounts
of interest, whenever contracted for, charged or received by Bank, with respect
to the Obligations, will be spread, prorated or allocated over the full period
of time the Obligations are unpaid, including the period of any renewal or
extension thereof. If the maturity of the Obligations is accelerated for any
reason whether as a result of an Event of Default or otherwise prior to the full
stated term, the total amount of interest contracted for, charged or received to
the time of such demand shall be spread, prorated or allocated along with any
interest thereafter accruing over the full period of time that the Obligations
thereafter remain unpaid for the purpose of determining if such interest exceeds
the Maximum Lawful Amount.

          (c) Excess Interest. At maturity (whether by acceleration or
otherwise) or on earlier final payment of the Obligations, Bank will compute the
total amount of interest that has been contracted for, charged or received by
Bank or payable by Borrower hereunder and compare such amount to the Maximum
Lawful Amount that could have been contracted for, charged or received by Bank.
If such computation reflects that the total amount of interest that has been
contracted for, charged or received by Bank or payable by Borrower exceeds the
Maximum Lawful Amount, then Bank shall apply such excess to the reduction of the
principal balance, such excess shall be refunded to Borrower. This provision
concerning the crediting or refund of excess interest shall control and take
precedence over all other agreements between Borrower and Bank so that under no
circumstances shall the total interest contracted for, charged or received by
Bank exceed the Maximum Lawful Amount.

          (d) Payments. Interest due on the Committed Revolving Line is payable
on the 18th of each month. Bank may debit any of Borrower’s deposit accounts
including Account Number ______________________ for principal and interest
payments owing or any amounts Borrower owes Bank. Bank will promptly notify
Borrower when it debits Borrower’s accounts. These debits are not a set-off.
Payments received after 12:00 noon 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 is due the next Business Day and
additional fees or interest accrue.

2.4    FEES.

          Borrower will pay:

          (a) Facility Fee. A fully earned, non-refundable Facility Fee of
$5,000 due on the Closing Date;

          (b) Bank Expenses. All Bank Expenses (including reasonable attorneys’
fees and reasonable expenses) incurred through and after the date of this
Agreement, are payable when due; and

5

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

          (c) Non-Usage Fee. A non-usage fee equal to the daily unused portion
under the Committed Revolving Line, multiplied by a per annum rate of 0.50%,
calculated and payable quarterly in arrears.

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 it receive the agreements, documents and fees it
requires.

          The purpose of the initial Advance shall be to pay off any and all
outstandings under that certain Accounts Receivable Financing Agreement, dated
April 3, 2000, by and between Borrower and Bank.

3.2    CONDITIONS PRECEDENT TO ALL ADVANCES.

          Bank’s obligations to make each Advance, including the initial
Advance, is subject to the following:

          (a) timely receipt of any Payment/Advance Form; and

          (b) the representations and warranties in Section 5 must be materially
true on the date of the Payment/Advance Form and on the effective date of each
Advance and no Event of Default may have occurred and be continuing, or result
from the Advance. Each Advance is Borrower’s representation and warranty on that
date that the representations and warranties of Section 5 remain true.

4       CREATION OF SECURITY INTEREST

4.1    GRANT OF SECURITY INTEREST.

          Borrower continues to grant Bank a continuing security interest in all
presently existing and later acquired Collateral to secure all Obligations and
performance of each of Borrower’s duties under the Loan Documents. Except for
Permitted Liens, any security interest will be a first priority security
interest in the Collateral. Bank may place a “hold“on any deposit account
pledged as Collateral. If this Agreement is terminated, Bank’s lien and security
interest in the Collateral will continue until Borrower fully satisfies its
Obligations.

5       REPRESENTATIONS AND WARRANTIES

          Borrower represents and warrants as follows:

5.1    DUE ORGANIZATION AND AUTHORIZATION.

          Borrower and each Subsidiary is duly existing and in good standing in
its state of formation and qualified and licensed to do business in, and in good
standing in, any state 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 cause a Material Adverse Change.

          The execution, delivery and performance of the Loan Documents have
been duly authorized, and do not conflict with Borrower’s formation documents,
nor constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in default under any agreement to which or by
which it is bound in which the default could reasonably be expected to cause a
Material Adverse Change.

5.2    COLLATERAL.

          Borrower has good title to the Collateral, free of Liens except
Permitted Liens. The Accounts are bona fide, existing obligations, and the
service or property has been performed or delivered to the account debtor or its
agent for immediate shipment to and unconditional acceptance by the account
debtor. Borrower has no notice of any actual or imminent Insolvency Proceeding
of any account debtor whose accounts are an Eligible Account in any Borrowing
Base Certificate. All Inventory is in all material respects of good and
marketable quality, free from material defects. Borrower is the sole owner of
the Intellectual Property, except for non-exclusive licenses granted to its
customers in the ordinary course of business. Each Patent is valid and
enforceable and no part of the Intellectual Property has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part of
the Intellectual Property violates the rights of any third party, except to the
extent such claim could not reasonably be expected to cause a Material Adverse
Change.

6

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

5.3    LITIGATION.

          Except as shown in the Schedule, there are no actions or proceedings
pending or, to the knowledge of Borrower’s Responsible Officers and legal
counsel, threatened by or against Borrower or any Subsidiary in which a likely
adverse decision could reasonably be expected to cause a Material Adverse
Change.

5.4    NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS.

          All consolidated financial statements for Borrower, and any
Subsidiary, delivered to Bank fairly present in all material respects Borrower’s
consolidated financial condition and Borrower’s consolidated results of
operations. There has not been any material deterioration in Borrower’s
consolidated financial condition since the date of the most recent financial
statements submitted to Bank.

5.5    SOLVENCY.

          The fair salable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; the Borrower is
not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
mature.

5.6    REGULATORY COMPLIANCE.

          Borrower is not an “investment company” or a company “controlled” by
an “investment company” under the Investment Company Act. Borrower is not
engaged as one of its important activities in extending credit for margin stock
(under Regulations T and U of the Federal Reserve Board of Governors). Borrower
has complied in all material respects with the Federal Fair Labor Standards Act.
Borrower has not violated any laws, ordinances or rules, the violation of which
could reasonably be expected to cause a Material Adverse Change. None of
Borrower’s or any Subsidiary’s properties or assets has been used by Borrower or
any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally. Borrower and each Subsidiary has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes,
except those being contested in good faith with adequate reserves under GAAP.
Borrower and each Subsidiary has 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 its business as
currently conducted, except where the failure to do so could not reasonably be
expected to cause a Material Adverse Change.

5.7    SUBSIDIARIES.

          Borrower does not own any stock, partnership interest or other equity
securities except for Permitted Investments.

5.8    FULL DISCLOSURE.

          No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Bank (taken together with all such
written certificates and written statements 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 certificates or statements not misleading. It
being recognized by Bank that the projections and forecasts provided by Borrower
in good faith and based upon reasonable assumptions are not viewed as facts and
that actual results during the period or periods covered by such projections and
forecasts may differ from the projected and forecasted results.

7

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

6       AFFIRMATIVE COVENANTS

          Borrower will do all of the following:

6.1    GOVERNMENT COMPLIANCE.

          Borrower will maintain its and all Subsidiaries’ legal existence and
good standing in its jurisdiction of formation and maintain qualification in
each jurisdiction in which the failure to so qualify would reasonably be
expected to cause a material adverse effect on Borrower’s business or
operations. Borrower will comply, and have each Subsidiary comply, with all
laws, ordinances and regulations to which it is subject, noncompliance with
which could have a material adverse effect on Borrower’s business or operations
or would reasonably be expected to cause a Material Adverse Change.

6.2    FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.

          (a) Borrower will deliver to Bank: (i) as soon as available, but no
later than 30 days after the last day of each month, a company prepared
consolidated balance sheet and income statement covering Borrower’s consolidated
operations during the period, in a form and certified by a Responsible Officer
acceptable to Bank; (ii) as soon as available, but no later than 90 days after
the last day of Borrower’s 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; (iii) a prompt report of
any legal actions pending or threatened against Borrower or any Subsidiary that
could result in damages or costs to Borrower or any Subsidiary of $100,000 or
more; (iv) budgets, sales projections, operating plans or other financial
information Bank reasonably requests; and (v) prompt notice of any material
change in the composition of the Intellectual Property, including any subsequent
ownership right of Borrower in or to any Copyright, Patent or Trademark not
shown in any intellectual property security agreement between Borrower and Bank
or knowledge of an event that materially adversely affects the value of the
Intellectual Property.

          (b) Prior to the initial Advance and at such times as Advances are
outstanding, within 20 days after the last day of each month, Borrower will
deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in
the form of Exhibit C, with aged listings of accounts receivable.

          (c) Within 30 days after the last day of each month, Borrower will
deliver to Bank with the monthly financial statements a Compliance Certificate
signed by a Responsible Officer in the form of Exhibit D.

          (d) Bank has the right to audit Borrower’s Collateral at Borrower’s
expense, but the audits will be conducted no more often than every year unless
an Event of Default has occurred and is continuing.

6.3    INVENTORY; RETURNS.

          Borrower will keep all Inventory in good and marketable condition,
free from material defects. Returns and allowances between Borrower and its
account debtors will follow Borrower’s customary practices as they exist at
execution of this Agreement. Borrower must promptly notify Bank of all returns,
recoveries, disputes and claims, that involve more than $50,000.

6.4    TAXES.

          Borrower will make, and cause each Subsidiary to make, timely payment
of all material federal, state, and local taxes or assessments and will deliver
to Bank, on demand, appropriate certificates attesting to the payment.

8

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

6.5    INSURANCE.

          Borrower will keep its business and the Collateral insured for risks
and in amounts, as Bank may reasonably request. Insurance policies will be in a
form, with companies, and in amounts that are satisfactory to Bank in Bank’s
reasonable discretion. All property policies will have a lender’s loss payable
endorsement showing Bank as an additional loss payee and all liability policies
will show the Bank as an additional insured and provide that the insurer must
give Bank at least 20 days notice before canceling its policy. At Bank’s
request, Borrower will deliver certified copies of policies and evidence of all
premium payments. Proceeds payable under any policy will, at Bank’s option, be
payable to Bank on account of the Obligations.

6.6    PRIMARY ACCOUNTS.

          Borrower will maintain its primary depository and operating accounts
with Bank.

6.7    FINANCIAL COVENANTS.

          Borrower will maintain as of the last day of each month:

          (i) Quick Ratio. A ratio of Quick Assets to Current Liabilities of at
least 1.15 to 1.00 for the month ended August 31, 2000, increasing to 1.20 to
1.00 for the months ending September 30, 2000 through December 31, 2000,
increasing to 1.30 to 1.00 for the months ending January 31, 2001 through March
31, 2001, and increasing to 1.50 to 1.00 for the month ending April 30, 2001 and
thereafter.

          (ii) Profitability. Borrower will have a quarterly minimum net profit
of $300,000 as of the quarter ending September 30, 2000; $100,000 as of the
quarter ending December 31, 2000; $300,000 as of the quarter ending March 31,
2001; and $300,000 as of the quarter ending June 30, 2001.

6.8    REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS.

          Borrower will register with the United States Patent and Trademark
Office or the United States Copyright Office its Intellectual Property within 30
days of the date of this Agreement, and additional Intellectual Property rights
developed or acquired including revisions or additions with any product before
the sale or licensing of the product to any third party.

          Borrower will (i) protect, defend and maintain the validity and
enforceability of the Intellectual Property and promptly advise Bank in writing
of material infringements and (ii) not allow any Intellectual Property to be
abandoned, forfeited or dedicated to the public without Bank’s written consent.

6.9    FURTHER ASSURANCES.

          Borrower will execute any further instruments and take further action
as Bank reasonably requests to perfect or continue Bank’s security interest in
the Collateral or to effect the purposes of this Agreement.

7       NEGATIVE COVENANTS

          Borrower will not do any of the following without Bank’s prior written
consent, which will not be unreasonably withheld:

7.1    DISPOSITIONS.

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

9

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

7.2    CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.

          Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by Borrower or reasonably related
thereto or have a material change in its (i) ownership (other than the sale of
Borrower’s equity securities in a public offering or to venture capital
investors approved by Bank) of greater than 25% or (ii) key management without
Bank’s approval, which such approval shall not be unreasonably withheld.
Borrower will not, without at least 30 days prior written notice, relocate its
chief executive office or add any new offices or business locations.

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, except where (i) no Event of Default has occurred
and is continuing or would result from such action during the term of this
Agreement and (ii) such transaction would not result in a decrease of more than
25% of Tangible Net Worth. A Subsidiary may merge or consolidate into another
Subsidiary or into Borrower.

7.4     INDEBTEDNESS.

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

7.5     ENCUMBRANCE.

          Create, incur, or allow 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, or permit
any Collateral not to be subject to the first priority security interest granted
here, subject to Permitted Liens.

7.6     DISTRIBUTIONS; INVESTMENTS.

          Directly or indirectly acquire or own any Person, or make any
Investment in any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so. Pay any dividends or make any distribution or payment or
redeem, retire or purchase any capital stock.

7.7     TRANSACTIONS WITH AFFILIATES.

          Directly or indirectly enter into or permit any material transaction
with any Affiliate except transactions that are in the ordinary course of
Borrower’s business, on terms less favorable to Borrower than would be obtained
in an arm’s length transaction with a non-affiliated Person.

7.8     SUBORDINATED DEBT.

          Make or permit any payment on any Subordinated Debt, except under the
terms of the Subordinated Debt, or amend any provision in any document relating
to the Subordinated Debt without Bank’s prior written consent.

7.9    COMPLIANCE.

          Become an “investment company” or a company controlled by an
“investment company,” under the Investment Company Act of 1940 or undertake as
one of its important activities extending credit to purchase or carry margin
stock, or use the proceeds of any Advance for that purpose; fail to meet the
minimum funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair
Labor Standards Act or violate any other law or regulation, if the violation
could reasonably be expected to have a material adverse effect on Borrower’s
business or operations or would reasonably be expected to cause a Material
Adverse Change, or permit any of its Subsidiaries to do so.

10

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

8       EVENTS OF DEFAULT

          Any one of the following is an Event of Default:

8.1    PAYMENT DEFAULT.

          If Borrower fails to pay any of the Obligations within 3 days after
their due date. During the additional period the failure to cure the default is
not an Event of Default (but no Advance will be made during the cure period);

8.2    COVENANT DEFAULT.

          If Borrower does not perform any obligation in Section 6 or violates
any covenant in Section 7 or does not perform or observe any other material
term, condition or covenant in this Agreement, any Loan Documents, or in any
agreement between Borrower and Bank and as to any default under a term,
condition or covenant that can be cured, has not cured the default within 10
days after it occurs, or if the default cannot be cured within 10 days or cannot
be cured after Borrower’s attempts within 10 day period, and the default may be
cured within a reasonable time, then Borrower has an additional period (of not
more than 30 days) to attempt to cure the default. During the additional time,
the failure to cure the default is not an Event of Default (but no Advances will
be made during the cure period);

8.3    MATERIAL ADVERSE CHANGE.

          (i) If there occurs a material impairment in the perfection or
priority of the Bank’s security interest in the Collateral or in the value of
such Collateral (other than normal depreciation) which is not covered by
adequate insurance or (ii) if the Bank determines, based upon information
available to it and in its reasonable judgment, that there is a reasonable
likelihood that Borrower will fail to comply with one or more of the financial
covenants in Section 6 during the next succeeding financial reporting period.

8.4    ATTACHMENT.

          If any material portion of Borrower’s assets is attached, seized,
levied on, or comes into possession of a trustee or receiver and the attachment,
seizure or levy is not removed in 10 days, or if Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of its
business or if a judgment or other claim becomes a Lien on a material portion of
Borrower’s assets, or if a notice of lien, levy, or assessment is filed against
any of Borrower’s assets by any government agency and not paid within 10 days
after Borrower receives notice. These are not Events of Default if stayed or if
a bond is posted pending contest by Borrower (but no Advances will be made
during the cure period);

8.5    INSOLVENCY.

          If Borrower becomes insolvent or if Borrower begins an Insolvency
Proceeding or an Insolvency Proceeding is begun against Borrower and not
dismissed or stayed within 30 days (but no Advances will be made before any
Insolvency Proceeding is dismissed);

8.6    OTHER AGREEMENTS.

          If there is a default in any agreement between Borrower and a third
party that gives the third party the right to accelerate any Indebtedness
exceeding $100,000 or that could cause a Material Adverse Change;

11

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

8.7    JUDGMENTS.

          If a money judgment(s) in the aggregate of at least $50,000 is
rendered against Borrower and is unsatisfied and unstayed for 10 days (but no
Advances will be made before the judgment is stayed or satisfied); or

8.8    MISREPRESENTATIONS.

          If Borrower or any Person acting for Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document.

9       BANK’S RIGHTS AND REMEDIES

9.1    RIGHTS AND REMEDIES.

          When an Event of Default occurs and continues 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 Borrower’s benefit
under this Agreement or under any other agreement between Borrower and Bank;

          (c) Settle or adjust disputes and claims directly with account debtors
for amounts, on terms and in any order that Bank considers advisable;

          (d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower will
assemble the Collateral if Bank requires 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 incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank’s rights
or remedies;

          (e) Apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower;

          (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral. Bank is granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower’s labels, Patents, Copyrights, Mask Works, rights of use of any name,
trade secrets, trade names, Trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank’s exercise of its rights under this Section, Borrower’s
rights under all licenses and all franchise agreements inure to Bank’s benefit;
and

          (g) Dispose of the Collateral according to the Code.

9.2    POWER OF ATTORNEY.

          Effective only when an Event of Default occurs and continues, Borrower
irrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower’s name
on any checks or other forms of payment or security; (ii) sign Borrower’s name
on any invoice or bill of lading for any Account or drafts against account
debtors, (iii) make, settle, and adjust all claims under Borrower’s insurance
policies; (iv) settle and adjust disputes and claims about the Accounts directly
with account debtors, for amounts and on terms Bank determines reasonable; and
(v) transfer the Collateral into the name of Bank or a third party as the Code
permits. Bank may exercise the power of attorney to sign Borrower’s name on any
documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred. Bank’s
appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers,
coupled with an interest, are irrevocable until all Obligations have been fully
repaid and performed and Bank’s obligation to provide Advances terminates.

12

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

9.3    ACCOUNTS COLLECTION.

          When an Event of Default occurs and continues, Bank may notify any
Person owing Borrower money of Bank’s security interest in the funds and verify
the amount of the Account. Borrower must collect all payments in trust for Bank
and, if requested by Bank, immediately deliver the payments to Bank in the form
received from the account debtor, with proper endorsements for deposit.

9.4    BANK EXPENSES.

          If Borrower fails to pay any amount or furnish any required proof of
payment to third persons, Bank may make all or part of the payment or obtain
insurance policies required in Section 6.5, and take any action under the
policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then applicable rate and
secured by the Collateral. No payments by Bank are deemed an agreement to make
similar payments in the future or Bank’s waiver of any Event of Default.

9.5     BANK’S LIABILITY FOR COLLATERAL.

          If Bank complies with reasonable banking practices and Section 9-207
of the Code, it is not liable 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. Borrower bears all risk of loss, damage or destruction of the
Collateral.

9.6    REMEDIES CUMULATIVE.

          Bank’s rights and remedies under this Agreement, the Loan Documents,
and all other agreements 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 Bank’s waiver of any Event of Default is not a
continuing waiver. Bank’s delay is not a waiver, election, or acquiescence. No
waiver is effective unless signed by Bank and then is only effective for the
specific instance and purpose for which it was given.

9.7    DEMAND WAIVER.

          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 Borrower is
liable.

10      NOTICES

          All notices or demands by any party about this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, postage prepaid, return receipt
requested, or by telefacsimile to the addresses set forth at the beginning of
this Agreement. A party may change its notice address by giving the other party
written notice.

11      CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER

          Texas law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Travis or Williamson County, Texas.

13

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

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF ANY OF 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 AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH COUNSEL.

12      GENERAL PROVISIONS

12.1   SUCCESSORS AND ASSIGNS.

     This Agreement binds and is for the benefit of the successors and permitted
assigns of each party. Borrower may not assign this Agreement or any rights
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
Borrower, to sell, transfer, negotiate, or grant participation in all or any
part of, or any interest in, Bank’s obligations, rights and benefits under this
Agreement.

12.2   INDEMNIFICATION.

          Borrower will indemnify, defend and hold harmless Bank and its
officers, employees, and agents against: (a) all obligations, demands, claims,
and liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by Bank from, following, or consequential to transactions
between Bank and Borrower (including reasonable attorneys fees and expenses),
except for losses caused by Bank’s gross negligence or willful misconduct.

12.3   TIME OF ESSENCE.

          Time is of the essence for the performance of all obligations in this
Agreement.

12.4   SEVERABILITY OF PROVISION.

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

12.5   AMENDMENTS IN WRITING, INTEGRATION.

     All amendments to this Agreement must be in writing and signed by Borrower
and Bank. This Agreement represents the entire agreement about this subject
matter, and supersedes prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement merge into this Agreement and
the Loan Documents.

12.6   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, are an original, and all taken together, constitute one Agreement.

12.7   SURVIVAL.

          All covenants, representations and warranties made in this Agreement
continue in full force while any Obligations remain outstanding. The obligations
of Borrower in Section 12.2 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.

14

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

12.8   CONFIDENTIALITY.

          In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made (i) to Bank’s subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or purchasers of any interest in the loans, (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with Bank’s
examination or audit and (v) as Bank considers appropriate exercising remedies
under this Agreement. Confidential information does not include information that
either: (a) is in the public domain or in Bank’s possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (b) is
disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information.

12.9   EFFECT OF AMENDMENT AND RESTATEMENT.

          This Agreement is intended to and does completely amend and restate,
without novation, the Original Agreement. All advances or loans outstanding
under the Original Agreement are and shall continue to be outstanding under this
Agreement. All security interests granted under the Original Agreement are
hereby confirmed and ratified and shall continue to secure all Obligations under
this Agreement.

12.10  ATTORNEYS’ FEES, COSTS AND EXPENSES.

          In any action or proceeding between Borrower and Bank arising out of
the Loan Documents, the prevailing party will be entitled to recover its
reasonable attorneys’fees and other reasonable costs and expenses incurred, in
addition to any other relief to which it may be entitled.

13      DEFINITIONS

13.1   DEFINITIONS.

          In this Agreement:

          “Accounts” are all existing and later arising accounts, contract
rights, and other obligations owed Borrower in connection with its sale or lease
of goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower’s Books relating to any of the
foregoing.

          “Advance” or “Advances” is a loan advance (or advances) under the
Committed Revolving Line.

          “Affiliate” of a Person is a 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.

          “Bank Expenses” are all audit fees and expenses and reasonable costs
and expenses (including reasonable attorneys’fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).

          “Borrower’s Books” are all Borrower’s books and records including
ledgers, records regarding Borrower’s assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

          “Borrowing Base” is 80% of Eligible Accounts as determined by Bank
from Borrower’s most recent Borrowing Base Certificate; provided, however, that
Bank may lower the percentage of the Borrowing Base after performing an audit of
Borrower’s Collateral.

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

15

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

          “Closing Date” is the date of this Agreement.

          “Code” is the Texas Uniform Commercial Code.

          “Collateral” is the property described on Exhibit A.

          “Committed Revolving Line” is an Advance of up to $2,000,000.

          “Contingent Obligation” is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
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; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) 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 the guarantee or other support arrangement.

          “Copyrights” are all copyright rights, applications or registrations
and like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.

          “Current Liabilities” are the aggregate amount of Borrower’s Total
Liabilities which mature within one (1) year.

          “Eligible Accounts” are Accounts in the ordinary course of Borrower’s
business that meet all Borrower’s representations and warranties in Section 5;
butBank may change eligibility standards by giving Borrower notice. Unless Bank
agrees otherwise in writing, Eligible Accounts will not include:

          (a) Accounts that the account debtor has not paid within 90 days of
invoice date;

          (b) Accounts for an account debtor, 50% or more of whose Accounts have
not been paid within 90 days of invoice date;

          (c) Credit balances over 90 days from invoice date;

          (d) Accounts for an account debtor, including Affiliates, whose total
obligations to Borrower exceed 25% of all Accounts, for the amounts that exceed
that percentage, unless the Bank approves in writing;

          (e) Accounts for which the account debtor does not have its principal
place of business in the United States, unless the Bank approves in writing;

          (f) Accounts for which the account debtor is a federal, state or local
government entity or any department, agency, or instrumentality;

          (g) Accounts for which Borrower owes the account debtor, but only up
to the amount owed (sometimes called “contra” accounts, accounts payable,
customer deposits or credit accounts);

          (h) Accounts for demonstration or promotional equipment, or in which
goods are consigned, sales guaranteed, sale or return, sale on approval, bill
and hold, or other terms if account debtor’s payment may be conditional;

16

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

          (i) Accounts for which the account debtor is Borrower’s Affiliate,
officer, employee, or agent;

          (j) Accounts in which the account debtor disputes liability or makes
any claim and Bank believes there may be a basis for dispute (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;

          (k) Accounts for which Bank reasonably determines collection to be
doubtful.

          “Equipment” is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

          “ERISA” is the Employment Retirement Income Security Act of 1974, and
its regulations.

          “GAAP” is generally accepted accounting principles.

          “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.

          “Insolvency Proceeding” are proceedings 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” is:

          (a) Copyrights, Trademarks, Patents, and Mask Works including
amendments, renewals, extensions, and all licenses or other rights to use and
all license fees and royalties from the use;

          (b) Any trade secrets and any intellectual property rights in computer
software and computer software products now or later existing, created, acquired
or held;

          (c) All design rights which may be available to Borrower now or later
created, acquired or held;

          (d) Any claims for damages (past, present or future) for infringement
of any of the rights above, with the right, but not the obligation, to sue and
collect damages for use or infringement of the intellectual property rights
above;

          All proceeds and products of the foregoing, including all insurance,
indemnity or warranty payments.

          “Inventory” is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.

          “Investment” is any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.

          “Lien” is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

17

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

          “Loan Documents” are, collectively, this Agreement, any note, or notes
or guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.

          “Mask Works” are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.

          “Material Adverse Change” is defined in Section 8.3.

          “Maximum Lawful Rate” is the maximum rate of interest and the term
“Maximum Lawful Amount” means the maximum amount of interest that is permissible
under applicable state or federal laws for the type of loan evidenced by the
Loan Documents. If the Maximum Lawful Rate is increased by statute or other
governmental action after the Closing Date, then the new Maximum Lawful Rate
will be applicable to the payments from the date of the effective date of the
rate change, unless otherwise prohibited by law.

          “Obligations” are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including cash management services,
letters of credit and foreign exchange contracts, if any and including interest
accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank.

          “Original Agreement” has the meaning set forth in recital paragraph A.

          “Patents” are patents, patent applications and like protections,
including improvements, divisions, continuations, renewals, reissues, extensions
and continuations-in-part of the same.

          “Permitted Indebtedness” is:

          (a) Borrower’s indebtedness to Bank under this Agreement or any other
Loan Document;

          (b) Indebtedness existing on the Closing Date and shown on the
Schedule;

          (c) Subordinated Debt;

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

          (e) Indebtedness secured by Permitted Liens.

          “Permitted Investments” are:

          (a) Investments shown on the Schedule and existing on the Closing
Date; and

          (b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition, (ii) commercial paper maturing no more than 1 year
after its creation and having the highest rating from either Standard &Poor’s
Corporation or Moody’s Investors Service, Inc., and (iii) Bank’s certificates of
deposit issued maturing no more than 1 year after issue.

          ”Permitted Liens” are:

          (a) Liens existing on the Closing Date and shown on the Schedule or
arising under this Agreement or other Loan Documents;

          (b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, ifthey have no priority over
any of Bank’s security interests;

18

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

          (c) Purchase money Liens (i) on Equipment acquired or held by Borrower
or its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, ifthe Lien is confined to the property
and improvements and the proceeds of the equipment;

          (d) Licenses or sublicenses granted in the ordinary course of
Borrower’s business and any interest or title of a licensor or under any license
or sublicense, if the licenses and sublicenses permit granting Bank a security
interest;

          (e) Leases or subleases granted in the ordinary course of Borrower’s
business, including in connection with Borrower’s leased premises or leased
property;

          (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.

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

          “Prime Rate” is Bank’s most recently announced “prime rate,“even if it
is not Bank’s lowest rate.

          “Quick Assets” is, on any date, the Borrower’s consolidated,
unrestricted cash, cash equivalents, net billed accounts receivable and
investments with maturities of fewer than 12 months determined according to
GAAP.

          “Responsible Officer” is each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller of Borrower.

          “Revolving Maturity Date” is September 18, 2001.

          “Schedule” is any attached schedule of exceptions.

          “Subordinated Debt” is debt incurred by Borrower subordinated to
Borrower’s indebtedness owed to Bank and which is reflected in a written
agreement in a manner and form acceptable to Bank and approved by Bank in
writing.

          “Subsidiary” is for any Person, or any other business entity of which
more than 50% of the voting stock or other equity interests is owned or
controlled, directly or indirectly, by the Person or one or more Affiliates of
the Person.

          “Tangible Net Worth” is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus, (i) any amounts attributable to (a)
goodwill, (b) intangible items such as unamortized debt discount and expense,
Patents, trade and service marks and names, Copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and(ii) Total Liabilities.

          “Total Liabilities” is on any day, obligations that should, under
GAAP, be classified as liabilities on Borrower’s consolidated balance sheet,
including all Indebtedness, and current portion Subordinated Debt allowed to be
paid, but excluding all other Subordinated Debt.

          “Trademarks” are trademark and servicemark rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Assignor connected with the trademarks.

19

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

BORROWER:

Tanisys Technology, Inc.

By: /s/ Terry Reynolds

Title: Vice President

BANK:

SILICON VALLEY BANK

By: /s/ Sheila Colson

Title: V.P.

20

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

EXHIBIT A

          The Collateral consists of all of Borrower’s right, title and interest
in and to the following:

          All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

          All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower’s custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;

          All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;

          All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;

          All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Borrower’s Books relating to the foregoing;

          All copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; all trade
secret rights, including all rights to unpatented inventions, know-how,
operating manuals, license rights and agreements and confidential information,
now owned or hereafter acquired; all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired; all
claims for damages by way of any past, present and future infringement of any of
the foregoing; and

          All 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
and accessions to and proceeds thereof.

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

INTELLECTUAL PROPERTY SECURITY AGREEMENT

          

          This Intellectual Property Security Agreement is entered into as of
September 19, 2000 by and between SILICON VALLEY BANK (“Bank”) and Tanisys
Technology, Inc. (“Grantor”).

RECITALS

          A. Bank has agreed to make certain advances of money and to extend
certain financial accommodation to Grantor (the “Loans”) in the amounts and
manner set forth in that certain Amended and Restated Loan and Security
Agreement by and between Bank and Grantor dated September 19, 2000 (as the same
may be amended, modified or supplemented from time to time, the “Loan
Agreement”; capitalized terms used herein are used as defined in the Loan
Agreement). Bank is willing to make the Loans to Grantor, but only upon the
condition, among others, that Grantor shall grant to Bank a security interest in
certain Copyrights, Trademarks, Patents, and Mask Works to secure the
obligations of Grantor under the Loan Agreement.

          B. Pursuant to the terms of the Loan Agreement, Grantor has granted to
Bank a security interest in all of Grantor’s right, title and interest, whether
presently existing or hereafter acquired, in, to and under all of the
Collateral.

          NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and intending to be legally bound, as collateral
security for the prompt and complete payment when due of its obligations under
the Loan Agreement, Grantor hereby represents, warrants, covenants and agrees as
follows:

AGREEMENT

          To secure its obligations under the Loan Agreement, Grantor grants and
pledges to Bank a security interest in all of Grantor’s right, title and
interest in, to and under its Intellectual Property Collateral (including
without limitation those Copyrights, Patents, Trademarks and Mask Works listed
on Schedules A, B, C, and D hereto), and including without limitation all
proceeds thereof (such as, by way of example but not by way of limitation,
license royalties and proceeds of infringement suits), the right to sue for
past, present and future infringements, all rights corresponding thereto
throughout the world and all re-issues, divisions continuations, renewals,
extensions and continuations-in-part thereof.

          This security interest is granted in conjunction with the security
interest granted to Bank under the Loan Agreement. The rights and remedies of
Bank with respect to the security interest granted hereby are in addition to
those set forth in the Loan Agreement and the other Loan Documents, and those
which are now or hereafter available to Bank as a matter of law or equity. Each
right, power and remedy of Bank provided for herein or in the Loan Agreement or
any of the Loan Documents, or now or hereafter existing at law or in equity
shall be cumulative and concurrent and shall be in addition to every right,
power or remedy provided for herein and the exercise by Bank of any one or more
of the rights, powers or remedies provided for in this Intellectual Property
Security Agreement, the Loan Agreement or any of the other Loan Documents, or
now or hereafter existing at law or in equity, shall not preclude the
simultaneous or later exercise by any person, including Bank, of any or all
other rights, powers or remedies.

          IN WITNESS WHEREOF, the parties have cause this Intellectual Property
Security Agreement to be duly executed by its officers thereunto duly authorized
as of the first date written above.

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

Address of Grantor:

12201 Technology Boulevard, Suite 125
Austin, TX 78727

Attn:
          —————————————— GRANTOR:

Tanisys Technology, Inc.

By: /s/ Terry Reynolds

Title: Vice President

Address of Bank:

9020 Capital of Texas Hwy. North
Austin, TX 78727

Attn:
          ——————————————

BANK:

SILICON VALLEY BANK

By: /s/ Sheila Colson

Title: V.P.

2