ex10-42_d12494


 
 EXHIBIT
  10.42 

 CREDIT AGREEMENT
  

      This CREDIT AGREEMENT, dated
  as of April 15, 2003 (as amended, supplemented and/or otherwise modified from
  time to time, this “Agreement”), is between WIND RIVER SYSTEMS, INC., a Delaware
  corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).
  

 RECITALS
  

      Borrower has requested that
  Bank extend or continue credit to Borrower as described below, and Bank has
  agreed to provide such credit to Borrower on the terms and conditions contained
  herein. 

      NOW, THEREFORE, for valuable
  consideration, the receipt and sufficiency of which are hereby acknowledged,
  Bank and Borrower hereby agree as follows: 

 ARTICLE
  I

  CREDIT
  TERMS

     
  SECTION 1.1.     LOAN COMMITMENT. 

     
  (a)     Loan
  Commitment. Subject to the terms and conditions of this
  Agreement, Bank hereby agrees to make advances to Borrower from time to time
  up to but excluding April 15, 2005 not to exceed the aggregate principal amount
  of Thirty-Seven Million Four Hundred Thousand Dollars ($37,400,000.00) (“Loan
  Commitment”), the proceeds of which shall be used by Borrower for its general
  corporate purposes, including, without limitation, the refinancing of synthetic
  lease obligations of Borrower. Borrower’s obligation to repay advances under
  the Loan Commitment shall be evidenced by a promissory note substantially in
  the form of Exhibit A attached hereto (as amended, supplemented and/or otherwise
  modified from time to time, the “Loan Commitment Note”), all terms of which
  are incorporated herein by this reference. 

     
  (b)     Borrowing
  and Repayment. Borrower may from time to time during
  the term of the Loan Commitment borrow and partially or wholly prepay its outstanding
  borrowings (provided that amounts repaid may not be reborrowed) subject
  to all of the limitations, terms and conditions contained herein and in the
  Loan Commitment Note; provided further that the total outstanding
  borrowings under the Loan Commitment shall not exceed the maximum principal
  amount available thereunder, as set forth above. The outstanding principal balance
  of the Loan Commitment shall be due and payable in full on April 15, 2005. 

     
  (c) Prepayment.    
  Borrower may prepay principal on the Loan Commitment and terminate, in whole
  or in part, the unused portion of the Loan Commitment, in each case, solely
  in accordance with the provisions of the Loan Commitment Note.

      SECTION 1.2.    
  LOAN. 

     
  (a) Loan.
      Subject to the terms and conditions of this Agreement,
  Bank hereby agrees to make a loan to Borrower in the original principal amount
  of Twenty Million Dollars ($20,000,000.00) (“Loan”), the proceeds of which shall
  be used by Borrower for its general 

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 corporate purposes, including,
  without limitation, the refinancing of synthetic lease obligations of Borrower.
  Borrower’s obligation to repay the Loan shall be evidenced by a promissory note
  substantially in the form of Exhibit B attached hereto (as amended, supplemented
  and/or otherwise modified from time to time, the “Loan Note”), all terms of
  which are incorporated herein by this reference. Bank’s commitment to make the
  Loan shall terminate on the day following the date of the first extension of
  credit hereunder and in no event on May 15, 2003. 

     
  (b)     Repayment.
  The outstanding principal balance of the Loan shall be due and payable in full
  on April 15, 2005. 

     
  (c)     Prepayment.
  Borrower may prepay principal on the Loan solely in accordance with the provisions
  of the Loan Note. 

  SECTION 1.3. STANDBY LETTER
  OF CREDIT. 

     
  (a)     Standby
  Letter of Credit. Bank has previously issued or caused
  an affiliate to issue a standby letter of credit for the account of Borrower
  and for the benefit of Safety National in the original principal amount of Three
  Hundred Fifty Thousand Dollars ($350,000.00) (the “Standby Letter of Credit”).
  The Standby Letter of Credit has an expiration date of October 1, 2003, and
  is subject to the additional terms of a letter of credit agreement, application
  and all related documents required by Bank in connection with the issuance thereof
  (collectively, the “Letter of Credit Agreement”). Subject to the terms and conditions
  of this Agreement, Bank hereby confirms that the Standby Letter of Credit remains
  in full force and effect. 

      (b)    
  Repayment of
  Drafts. Each drawing paid under the Standby Letter of
  Credit shall be repaid by Borrower in accordance with the provisions of the
  Letter of Credit Agreement. 

     
  SECTION 1.4.     INTEREST/FEES. 

      (a)    
  Interest. The outstanding principal balance of each credit subject hereto,
  and the amount of each drawing paid under the Standby Letter of Credit, shall
  bear interest from the date such credit is extended and/or drawing is paid,
  as applicable, to the date such amount is fully repaid by Borrower at the applicable
  rate of interest set forth in each promissory note or other instrument or document
  executed in connection therewith. 

      (b)    
  Computation
  and Payment. Interest shall be computed on the basis
  of a 360-day year, actual days elapsed. Interest shall be payable at the times
  and place set forth in each promissory note or other instrument or document
  required hereby. 

     
  (c)     Unused
  Commitment Fee. Borrower shall pay to Bank a fee equal
  to one-tenth percent (0.10%) per annum (computed on the basis of a 360-day year,
  actual days elapsed) on the average daily unused amount of the Loan Commitment,
  which fee shall be calculated on a monthly basis by Bank and shall be due and
  payable by Borrower in arrears within 30 days after each billing is sent by
  Bank.

     
  (d)     Letter
  of Credit Fees. Bank acknowledges that Borrower has
  previously paid to Bank an issuance fee in respect of the Standby Letter of
  Credit in an amount equal to one and one-half percent (1.50%) per annum (computed
  on the basis of a 360-day year, actual days elapsed) of the face amount thereof.
  Borrower shall pay to Bank fees upon the payment or negotiation of each drawing
  under the Standby Letter of Credit and fees upon the occurrence of any other
  activity with respect to the Standby Letter of Credit (including, without limitation,
  the

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 transfer, amendment or cancellation
  of the Standby Letter of Credit) determined in accordance with Bank’s standard
  fees and charges then in effect for such activity. 

     
  (e)     Collection
  of Payments. Borrower authorizes Bank to collect all
  interest due under each credit subject hereto (including, without limitation,
  the Standby Letter of Credit) by charging Borrower’s deposit account number
  4091384644 with
  Bank for the full amount thereof. Should there be insufficient funds in any
  such deposit account to pay all such sums when due, the full amount of such
  deficiency shall be immediately due and payable by Borrower. 

      SECTION 1.5.     COLLATERAL.
  

      As security for all indebtedness
  of Borrower to Bank under the Loan Commitment and the Loan, Borrower hereby
  grants to Bank security interests of first priority in Borrower’s Wells Fargo
  Institutional Securities, LLC account number 12737300 (the “Securities Collateral”).

      Bank agrees to (i) release
  its security interest in the Securities Collateral to the extent that the same
  secures the Loan (but not to the extent that the Securities Collateral secures
  the Loan Commitment), and (ii) concurrently with such release, take a first
  priority lien in Borrower’s real property located at 300, 400, 500 and
  600 Wind River Way, Alameda, CA (the “Real Property Collateral”) as security
  for the Loan, in the event that all of the following conditions are satisfied:


       
    (i)      Borrower’s net income after taxes for the
    most recently ended four consecutive fiscal quarter period of Borrower (such
    period, the “Target Period”) shall be greater than $1.00, with net income
    after taxes greater than $1.00 for the last three consecutive fiscal quarters
    occurring in such Target Period; 

       
    (ii)     Borrower’s net income before taxes for the
    Target Period shall be equal to or greater than 85% of Borrower’s projected
    net income before taxes (based on Borrower’s projections as delivered
    to Bank on March 21, 2003, the “Projections”) for such Target Period; 

       
    (iii)    Borrower’s EBITDA for the Target Period shall
    be equal to or greater than 85% of Borrower’s projected EBITDA (based
    on the Projections and with “EBITDA” defined as net profit before tax plus
    interest expense (net of capitalized interest expense), depreciation expense
    and amortization expense) for such Target Period; 

       
    (iv)    the outstanding principal balance of the Loan at the
    end of the Target Period shall be equal to or less than 50% of the appraised
    value of the Real Property Collateral as determined by an appraisal ordered
    by and in form and content acceptable to Bank (the “Appraisal”); 

       
    (v)     the stabilized debt service coverage ratio of
    the Real Property Collateral (determined solely with respect to the Loan),
    as determined by the Appraisal, shall be equal to or greater than 1.25 to
    1.0 (assuming, solely for purposes of this calculation, that the Loan fully
    amortizes in 20 equal annual installments); 

       
    (vi)    Bank’s deed of trust (in form and content acceptable
    to Bank) shall have been recorded and Bank’s lien on the Real Property
    Collateral shall be insured pursuant to a title insurance policy in form and
    content acceptable to Bank and issued by an insurer acceptable to Bank (acting
    reasonably); and 



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    (vii)     Bank shall have received a Phase I environmental
    report covering the Real Property Collateral in form and content acceptable
    to Bank; and 

       
    (viii)    no Event of Default (or event or condition, which,
    with the passage of time or giving of notice, would constitute an Event of
    Default) shall then exist. 



 In the event that any Reinstatement
  Event (as defined below) occurs, Bank’s security interest in the Securities
  Collateral (to the extent that the same secured the Loan) shall automatically
  and without notice or further action be reinstated such that the Loan and Loan
  Commitment shall thereafter be secured by the Securities Collateral. 

 “Reinstatement Event”
  means any of the following: 

     
  (1)    Borrower shall cease to occupy all or substantially all
  of the Real Property Collateral. 

     
  (2)    A violation of either or both of the Tier 2 Financial
  Covenants (as defined in Section 4.9 hereof) shall have occurred. 

      Upon the reinstatement of
  Bank’s security interest in the Securities Collateral as described above
  and Borrower’s written confirmation to Bank of such reinstatement, Bank
  shall release its lien on the Real Property Collateral, and the violation(s)
  of the Tier 2 Financial Covenant(s) shall be deemed to have been waived (except
  if and to the extent that Liquidity was less than the $100,000,000.00 requirement
  set forth in Section 4.9(a) hereof). 

      All of the foregoing shall
  be evidenced by and subject to the terms of such security agreements, financing
  statements, deeds of trust and other documents as Bank shall reasonably require,
  all in form and substance satisfactory to Bank. Borrower shall reimburse Bank
  within five (5) business days after receipt of demand for all reasonable costs
  and expenses incurred by Bank in connection with any of the foregoing security,
  including without limitation, filing and recording fees and costs of appraisals,
  audits and title insurance. 

 ARTICLE
  II

  REPRESENTATIONS
  AND WARRANTIES 

      Borrower makes the following
  representations and warranties to Bank, which representations and warranties
  shall survive the execution of this Agreement and shall continue in full force
  and effect until the full and final payment, and satisfaction and discharge,
  of all obligations of Borrower to Bank subject to this Agreement. 

     
  SECTION 2.1.     LEGAL STATUS. Borrower is a corporation,
  duly organized and existing and in good standing under the laws of the State
  of Delaware, and is qualified or licensed to do business (and is in good standing
  as a foreign corporation, if applicable) in all jurisdictions in which such
  qualification or licensing is required or in which the failure to so qualify
  or to be so licensed would not reasonably be expected to have a Material Adverse
  Effect. For purposes of this Agreement, “Material Adverse Effect” shall mean
  any material adverse change in, or any material adverse effect on: (a) the operations,
  business, properties, liabilities or financial condition of Borrower; (b) the
  ability of Borrower to perform its payment obligations under the Loan Documents;
  and/or (c) the legality, validity, binding effect or enforceability of any Loan
  Document. For purposes hereof, “Obligations” means all obligations, indebtedness,
  and liabilities of Borrower of every kind and character owed to Bank, arising
  

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 directly or indirectly out
  of or in connection with the Loan Documents (other than the Standby Letter of
  Credit), including, without limitation, such obligations, indebtedness, and
  liabilities arising under successive transactions renewing, increasing, extending
  or continuing any of the foregoing, changing the interest rate or other terms
  thereof, or creating new or additional obligations, indebtedness, and liabilities
  after prior obligations, indebtedness, or liabilities have been in whole or
  in part satisfied, and further including, without limitation, all such obligations,
  indebtedness, and liabilities however arising, whether for principal, interest
  (including, without limitation, interest that, but for the filing of a petition
  under the federal Bankruptcy Reform Act, Title 11 of the United States Code,
  as amended or recodified from time to time (“Bankruptcy Code”) with respect
  to Borrower, would have accrued on any such obligations, indebtedness, or liabilities),
  letter of credit reimbursement obligations (other than in respect of the Standby
  Letter of Credit), fees, costs, expenses, premiums, charges, attorneys’ fees,
  or indemnity obligations, whether previously, now, or hereafter made, incurred
  or created, whether voluntarily or involuntarily, whether secured or unsecured
  (and if secured, regardless of the nature or extent of the security), whether
  or not now due, whether absolute or contingent, whether liquidated or unliquidated,
  whether determined or undetermined, whether Borrower may be liable individually
  or jointly with others, and whether made, incurred, or created before or after
  any entry of an order for relief with respect to Borrower in a case under the
  Bankruptcy Code. 

      SECTION 2.2.    
  AUTHORIZATION AND VALIDITY. This Agreement and each promissory note, contract,
  instrument and other document required hereby or at any time hereafter executed
  or authenticated by Borrower and delivered to Bank in connection herewith (collectively,
  the “Loan Documents”) have been duly authorized, and upon their execution and
  delivery in accordance with the provisions hereof will constitute legal, valid
  and binding agreements and obligations of Borrower or the party which executes
  the same, enforceable in accordance with their respective terms, except as the
  enforceability thereof may be limited by bankruptcy, insolvency or other similar
  laws of general application relating to or affecting the enforcement of creditors’
  rights or by general principles of equity.. 

      SECTION 2.3.     NO
  VIOLATION. The execution, delivery and performance by Borrower of each of the
  Loan Documents to which it is a party do not violate any provision of any law
  or regulation, or contravene any provision of the organizational documents of
  Borrower, or result in any breach of or default under any contract, obligation,
  indenture or other instrument to which Borrower is a party or by which Borrower
  may be bound. 

      SECTION 2.4.    
  LITIGATION. There are no pending, or to the best of Borrower’s knowledge threatened,
  actions, claims, investigations, suits or proceedings by or before any governmental
  authority, arbitrator, court or administrative agency which, if adversely determined,
  would reasonably be expected to have a Material Adverse Effect other than those
  disclosed by Borrower to Bank in writing prior to the date hereof. 

      SECTION 2.5.    
  CORRECTNESS OF FINANCIAL STATEMENT. The financial statement of Borrower dated
  October 31, 2002, a true copy of which has been delivered by Borrower to Bank
  prior to the date hereof, (a) is complete and correct and presents fairly the
  financial condition of Borrower on and as of such date, (b) discloses all liabilities
  of Borrower that are required to be reflected or reserved against on and as
  of such date under generally accepted accounting principles, whether liquidated
  or unliquidated, fixed or contingent, and (c) has been prepared in accordance
  with generally accepted accounting principles consistently applied. Since the
  date of such financial statement (i) no Material Adverse Effect has occurred
  and (ii) except for Permitted Liens, Borrower has not mortgaged, pledged, granted
  a security interest in or otherwise encumbered any of its assets or properties.
  

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      SECTION 2.6.    
  INCOME TAX RETURNS. Borrower has no knowledge of any pending assessments or
  adjustments of its income tax payable with respect to any year other than any
  of the foregoing that would not reasonably be expected to have a Material Adverse
  Effect. 

      SECTION 2.7.    
  NO SUBORDINATION. There is no agreement, indenture, contract or instrument to
  which Borrower is a party or by which Borrower may be bound that requires the
  subordination in right of payment of any of Borrower’s obligations subject to
  this Agreement to any other obligation of Borrower. 

      SECTION 2.8.    
  PERMITS, FRANCHISES. Borrower possesses, and will hereafter possess, all permits,
  consents, approvals, franchises and licenses required and rights to all trademarks,
  trade names, patents, and fictitious names, if any, necessary to enable it to
  conduct the business in which it is now engaged in compliance with applicable
  law except any, the failure of which to possess would not reasonably be expected
  to have a Material Adverse Effect.

      SECTION 2.9.    
  ERISA. Borrower is in compliance in all material respects with all applicable
  provisions of the Employee Retirement Income Security Act of 1974, as amended
  or recodified from time to time (“ERISA”); Borrower has not violated any provision
  of any defined employee pension benefit plan (as defined in ERISA) maintained
  or contributed to by Borrower (each, a “Plan”) except for any violation which
  would not reasonably be expected to have a Material Adverse Effect; no Reportable
  Event as defined in ERISA has occurred and is continuing unwaived with respect
  to any Plan initiated by Borrower; Borrower has met its minimum funding requirements
  under ERISA with respect to each Plan; and each Plan will be able to fulfill
  its benefit obligations as they come due in accordance with the Plan documents
  and under generally accepted accounting principles. 

      SECTION 2.10.     OTHER
  OBLIGATIONS. Borrower is not in default on any obligation for borrowed money
  or any material purchase money obligation and is not in default under any other
  lease, commitment, contract, instrument or obligation other than any default
  that would not reasonably be expected to have a Material Adverse Effect. 

      SECTION 2.11.    
  ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in writing prior
  to the date hereof, Borrower is in compliance in all respects with all applicable
  federal or state environmental, hazardous waste, health and safety statutes,
  and any rules or regulations adopted pursuant thereto, which govern or affect
  any of Borrower’s operations and/or properties, including without limitation,
  the Comprehensive Environmental Response, Compensation and Liability Act of
  1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal
  Resource Conservation and Recovery Act of 1976, and the Federal Toxic Substances
  Control Act, as any of the same may be amended, modified or supplemented from
  time to time, except for any non-compliance that would not reasonably be expected
  to have a Material Adverse Effect. None of the operations of Borrower is the
  subject of any federal or state investigation evaluating whether any remedial
  action involving a material expenditure is needed to respond to a release of
  any toxic or hazardous waste or substance into the environment, except for any
  such investigation or expenditure that would not reasonably be expected to have
  a Material Adverse Effect. Borrower has no contingent liability in connection
  with any release of any toxic or hazardous waste or substance into the environment,
  except for liabilities that would not reasonably be expected to have a Material
  Adverse Effect. 

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 ARTICLE
  III

  CONDITIONS
  

      SECTION 3.1.     CONDITIONS
  OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any credit
  contemplated by this Agreement is subject to the fulfillment to Bank’s satisfaction
  of all of the following conditions: 

     
  (a)     Approval
  of Bank Counsel. All legal matters incidental to the
  extension of credit by Bank shall be satisfactory to Bank’s counsel. 

     
  (b)     Documentation.
  Bank shall have received, in form and substance satisfactory to Bank (acting
  reasonably), each of the following, duly executed: 

	 	(i)	     	This Agreement
      and each promissory note or other instrument or document required hereby.

        
	 	(ii)	 	Corporate
      Resolution: Borrowing.

        
	 	(iii)	 	Certificate
      of Incumbency.

        
	 	(iv)	 	Security
      Agreement: Securities Account and the related Addendum to Security Agreement:
      Securities Account (together and as amended, supplemented and/or otherwise
      modified from time to time, the “Security Agreement”).

        
	 	(vi)	 	Securities
      Account Control Agreement.

        
	      	(vii)	 	The Projections.


     
  (c)     Material
  Adverse Effect; Collateral. No Material Adverse Effect
  shall have occurred; since the date of the last financial statements of Borrower
  provided to Bank. 

     
  (d)     Insurance.
  Borrower shall have delivered to Bank evidence of insurance coverage on all
  Borrower’s property, in form, substance, amounts, covering risks and issued
  by companies reasonably satisfactory to Bank, and where requested in writing
  by Bank, with loss payable endorsements in favor of Bank. 

     
  SECTION 3.2.     CONDITIONS OF EACH EXTENSION OF CREDIT.
  The obligation of Bank to make each extension of credit requested by Borrower
  hereunder shall be subject to the fulfillment to Bank’s satisfaction of each
  of the following conditions: 

     
  (a)     Compliance.
  The representations and warranties contained herein and in each of the other
  Loan Documents shall be true and correct in all material respects on and as
  of the date of the signing of this Agreement and on the date of each extension
  of credit by Bank pursuant hereto, with the same effect as though such representations
  and warranties had been made on and as of each such date, and on each such date,
  no Event of Default as defined herein, and no condition, event or act which
  with the giving of notice or the passage of time or both would constitute such
  an Event of Default shall have occurred and be continuing or shall exist unwaived.
  

 ARTICLE
  IV

  AFFIRMATIVE
  COVENANTS 

      Borrower covenants that
  so long as Bank remains committed to extend credit to Borrower pursuant hereto,
  or any liabilities (whether direct or contingent, liquidated or unliquidated)
  of Borrower to Bank under any of the Loan Documents remain outstanding, and
  until payment in 

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 full of all obligations of
  Borrower subject hereto, Borrower shall, unless Bank otherwise consents in writing:
  

     
  SECTION 4.1.     PUNCTUAL PAYMENTS. Punctually pay all principal,
  interest, fees or other liabilities due under any of the Loan Documents at the
  times and place and in the manner specified therein. 

      SECTION 4.2.    
  ACCOUNTING RECORDS. Maintain adequate books and records in accordance with generally
  accepted accounting principles consistently applied, and permit any representative
  of Bank, at any reasonable time and upon reasonable notice, to inspect, audit
  and examine such books and records, to make copies of the same, and to inspect
  the properties of Borrower; provided
  that, if any Event of Default has occurred and is continuing unwaived, Bank
  may conduct such inspections, audits and/or examinations at any time without
  any prior notice 

      SECTION 4.3.    
  FINANCIAL STATEMENTS. Provide to Bank all of the following, in form and detail
  satisfactory to Bank: 

     
  (a)     not later than 90 days after and as of the end of
  each fiscal year, Borrower’s Form 10-K filed with Securities Exchange Commission
  (which shall include a financial statement of Borrower, prepared by a certified
  public accountant reasonably acceptable to Bank, to include balance sheet, income
  statement, statement of cash flows, management report, auditor’s report,
  all supporting schedules and footnotes); 

     
  (b)     not later than 45 days after and as of the end of
  each quarter, Borrower’s Form 10-Q filed with Securities Exchange Commission
  (which shall include a financial statement of Borrower, prepared by a certified
  public accountant reasonably acceptable to Bank, to include balance sheet, income
  statement, statement of cash flows, management report, auditor’s report,
  all supporting schedules and footnotes); 

     
  (c)     from time to time such other information as Bank
  may reasonably request. 

      SECTION 4.4.     COMPLIANCE.
  Preserve and maintain all licenses, permits, governmental approvals, rights,
  privileges and franchises necessary for the conduct of its business; and comply
  with the provisions of all documents pursuant to which Borrower is organized
  and/or which govern Borrower’s continued existence and with the requirements
  of all laws, rules, regulations and orders of any governmental authority applicable
  to Borrower and/or its business, except where the failure to do so would not
  reasonably be expected to have a Material Adverse Effect. 

      SECTION 4.5.    
  INSURANCE. Maintain and keep in force insurance of the types and in amounts
  customarily carried in lines of business similar to that of Borrower, including
  but not limited to fire, extended coverage, public liability, flood, property
  damage and workers’ compensation, with all such insurance carried with companies
  and in amounts reasonably satisfactory to Bank, and deliver to Bank from time
  to time at Bank’s reasonable request schedules setting forth all insurance then
  in effect. 

      SECTION 4.6.     FACILITIES.
  Keep all properties useful or necessary to Borrower’s business in good repair
  and condition, and from time to time make necessary repairs, renewals and replacements
  thereto so that such properties shall be fully and efficiently preserved and
  

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 maintained, except where
  the failure to do so would not reasonably be expected to have a Material Adverse
  Effect. 

      SECTION 4.7.     TAXES
  AND OTHER LIABILITIES. Pay and discharge when due any and all indebtedness,
  obligations, assessments and taxes, both real or personal, including without
  limitation federal and state income taxes and state and local property taxes
  and assessments, except such (a) as Borrower may in good faith contest or as
  to which a bona fide dispute may arise, and (b) for which Borrower has made
  provision, to Bank’s reasonable satisfaction, for eventual payment thereof in
  the event Borrower is obligated to make such payment. 

      SECTION 4.8.    
  LITIGATION. Promptly upon becoming aware of such litigation, give notice in
  writing to Bank of: (a) any litigation pending against Borrower with a claim
  in excess of $2,000,000.00; and (b) any litigation threatened against Borrower
  with a claim in excess of $2,000,000.00, except where the failure to do so would
  not reasonably be expected to have a Material Adverse Effect. 

      SECTION 4.9    
  FINANCIAL CONDITION. Maintain Borrower’s financial condition as follows using
  generally accepted accounting principles consistently applied and used consistently
  with prior practices (except to the extent modified by the definitions herein):
  

      (a)     Liquidity
  (with “Liquidity” defined as the aggregate of Borrower’s unencumbered and
  unrestricted cash, cash equivalents and readily marketable securities acceptable
  to Bank , but not including any Securities Collateral) not at any time less
  than $100,000,000.00, whether or not the Securities Collateral secures the Loan.
  

      (b)    
  Only if and so long as the Securities Collateral does not secure the Loan, Liquidity
  not at any time less than $150,000,000.00. 

      (c)     Only
  if and so long as the Securities Collateral does not secure the Loan, Tangible
  Net Worth not at any time less than $280,000,000.00 to and including January
  31, 2004 and not at any time less than $300,000,000.00 as of and after February
  1, 2004, with “Tangible Net Worth” defined as the aggregate of total stockholders’
  equity plus subordinated debt less any intangible assets. 

 (the covenants set forth
  in paragraphs (b) and (c) are referred to as the “Tier 2 Financial Covenants”).
  

      SECTION 4.10.    
  NOTICE TO BANK. Promptly (but in no event more than five (5) business days after
  becoming aware of the occurrence of each such event or matter) give written
  notice to Bank in reasonable detail of: (a) the occurrence of any Event of Default,
  or any condition, event or act which with the giving of notice or the passage
  of time or both would constitute an Event of Default; (b) any change in the
  name or the organizational structure of Borrower; (c) the occurrence and nature
  of any Reportable Event or Prohibited Transaction, each as defined in ERISA,
  or any funding deficiency with respect to any Plan; or (d) any termination or
  cancellation of any insurance policy which Borrower is required to maintain,
  or any uninsured or partially uninsured loss in excess of $100,000.00 through
  liability or property damage, or through fire, theft or any other cause affecting
  Borrower’s property. 

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 ARTICLE
  V

  NEGATIVE
  COVENANTS 

      Borrower further covenants
  that so long as Bank remains committed to extend credit to Borrower pursuant
  hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated)
  of Borrower to Bank under any of the Loan Documents remain outstanding, and
  until payment in full of all obligations of Borrower subject hereto, Borrower
  will not without Bank’s prior written consent: 

     
  SECTION 5.1.     USE OF FUNDS. Use any of the proceeds of
  any credit extended hereunder except for the purposes stated in Article I hereof.
  

     
  SECTION 5.2.     OTHER INDEBTEDNESS. Create, incur, assume
  or permit to exist any indebtedness or liabilities resulting from borrowings,
  loans or advances, whether secured or unsecured, matured or unmatured, liquidated
  or unliquidated, joint or several, except (a) the liabilities of Borrower to
  Bank, (b) purchase money indebtedness not to exceed $200,000.00 per transaction
  or $2,000,000.00 outstanding at any time; (c) any other liabilities of Borrower
  existing as of, and disclosed to Bank prior to, the date hereof; and (d) any
  refinancing, renewal or extension of any of the indebtedness referenced in clauses
  (b) and (c) of this Section 5.2 so long as: (i) at the time of such refinancing,
  renewal or extension, no Event of Default (or event, act or condition which,
  with the giving of notice, the lapse of time or both, would constitute an Event
  of Default) has occurred and is continuing unwaived or would result by virtue
  thereof; (ii) the terms and conditions of such refinancing, renewal or extension
  would not reasonably be expected to have a Material Adverse Effect; and (iii)
  to the extent that such indebtedness constitutes indebtedness subordinated to
  the Obligations, such refinancing, renewal or extension contains subordination
  provisions in form and substance satisfactory to Bank; provided
  that Bank agrees that the subordination provisions relating to any such subordinated
  indebtedness that is existing on the date of this Agreement are, for purposes
  of this subsection (iii), in form and substance satisfactory to Bank. 

      SECTION 5.3.     MERGER,
  CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any other
  entity; make any substantial change in the nature of Borrower’s business as
  conducted as of the date hereof; acquire all or substantially all of the assets
  of any other entity; nor sell, lease, transfer or otherwise dispose of all or
  a substantial or material portion of Borrower’s assets except in the ordinary
  course of its business. 

      SECTION 5.4.     LOANS,
  ADVANCES, INVESTMENTS. Make any loans or advances to or investments in any person
  or entity, except (a) any of the foregoing existing as of, and disclosed to
  Bank prior to, the date hereof and (b) any of the type existing as of, and disclosed
  to Bank prior to, the date hereof made by Borrower following the date hereof
  in a maximum amount not to exceed (i) $1,000,000.00 for any one transaction
  and (ii) $10,000,000.00 in the aggregate. 

      SECTION 5.5.    
  PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a security interest
  or lien (either, a “Lien”) in or upon all or any portion of Borrower’s assets
  now owned or hereafter acquired, except for the following Liens (individually,
  a “Permitted Lien” and, collectively, the “Permitted Liens”):
  (a) Liens in favor of Bank (b) Liens which are existing as of, and disclosed
  to Bank in writing prior to, the date hereof, (c) Liens to the extent the same
  constitute purchase money liens which secure indebtedness permitted under Section
  5.2(b); (d) Liens incurred and pledges and deposits made in the ordinary course
  of business in connection with workers’ compensation, unemployment insurance,
  old-age pensions and other social 

 -10- 



  
 security benefits; (e) Liens
  imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s
  and vendors’ Liens, incurred in good faith in the ordinary course of business
  and securing obligations which are not yet due or which are being contested
  in good faith by appropriate proceedings with adequate reserves set aside; (f)
  Liens securing the payment of taxes, assessments and governmental charges or
  levies, either (i) not delinquent, or (ii) being contested in good faith by
  appropriate legal or administrative proceedings with adequate reserves set aside;
  (g) zoning restrictions, easements, licenses, reservations, provisions, covenants,
  conditions, waivers and restrictions on the use of property or irregularities
  of title, none of which materially impairs the use of any property material
  to the operation of the business of Borrower or the value of such property;
  (h) attachment, judgment or other similar Liens arising in connection with court
  proceedings that would not reasonably be expected to have a Material Adverse
  Effect and (i) that are discharged or stayed within thirty (30) days of attachment
  or levy, or (ii) payment of which is covered (subject to customary and reasonable
  deductibles) by insurance or surety bonds; (i) Liens arising solely by virtue
  of any statutory or common law provision relating to banker’s liens, rights
  of set-off or similar rights and remedies as to deposit accounts or other funds
  maintained with a creditor depository institution; provided
  that (i) such deposit account is not a dedicated cash collateral account and
  is not subject to restrictions against access by Borrower in excess of those
  set forth by regulations promulgated by the Board of Governors of the Federal
  Reserve System, and (ii) such deposit account is not intended by Borrower to
  provide collateral to the depository institution; and (j) extensions, renewals
  and replacements of Liens referred to in sub-paragraphs (a) through (i) of this
  definition; provided that any extension, renewal or replacement Lien
  of any Lien referred to in sub-paragraphs (b) through (i) of this definition
  shall be limited to the property or assets covered by the Lien extended, renewed
  or replaced and that the obligations secured by any such extension, renewal
  or replacement Lien shall be in an amount not greater than the amount of the
  obligations secured by the Lien extended, renewed or replaced. 

      SECTION 5.6.     GUARANTIES.
  Guarantee or become liable in any way as surety, endorser (other than as endorser
  of negotiable instruments for deposit or collection in the ordinary course of
  business), accommodation endorser or otherwise for, nor pledge or hypothecate
  any assets of Borrower as security for, any liabilities or obligations of any
  other person or entity, except any of the foregoing (a) in favor of Bank or
  (b) not to exceed $200,000.00 per transaction or $2,000,000.00 outstanding at
  any time. 

      SECTION 5.7.    
  DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or distribution either
  in cash, stock or any other property on Borrower’s stock now or hereafter outstanding,
  nor redeem, retire, repurchase or otherwise acquire any shares of any class
  of Borrower’s stock now or hereafter outstanding, except for stock repurchases,
  in a maximum aggregate amount not to exceed $30,000,000.00, related to Borrower’s
  employee stock purchase plan and/or any other publicly announced stock buy-back
  plan of Borrower. 

 ARTICLE
  VI

  EVENTS
  OF DEFAULT 

      SECTION 6.1.     The
  occurrence of any of the following shall constitute an “Event of Default” under
  this Agreement: 

      (a)    
  Borrower shall fail to pay within five (5) business days of the date when due
  any principal, interest, fees or other amounts payable under any of the Loan
  Documents. 

 -11-



  
     
  (b)     Any financial statement or certificate furnished
  to Bank in connection with, or any representation or warranty made by Borrower
  or any other party under this Agreement or any other Loan Document shall prove
  to be incorrect, false or misleading in any material respect when furnished
  or made. 

     
  (c)     Any default in the performance of or compliance
  with any obligation, agreement or other provision contained herein or in any
  other Loan Document (other than those referred to in subsections (a) and (b)
  above), and with respect to any such default which by its nature can be cured,
  such default shall continue for a period of twenty (20) days from its occurrence.
  

     
  (d)     Any default in the payment or performance of any
  obligation, or any defined event of default, under the terms of any contract
  or instrument (other than any of the Loan Documents) pursuant to which Borrower
  has incurred any debt or other liability (i) to Bank or (ii) in excess of $3,000,000.00
  to any person or entity other than Bank. 

      (e)     The
  filing of a notice of judgment lien against Borrower; or the recording of any
  abstract of judgment against Borrower in any county in which Borrower has an
  interest in real property; or the service of a notice of levy and/or of a writ
  of attachment or execution, or other like process, against the assets of Borrower;
  or the entry of a judgment against Borrower; and, in any such case, any such
  notice, abstract, levy, writ, process, judgment, order or decree involves a
  claim or dispute in an amount equal to or greater than $3,000,000.00 that remains
  unsatisfied, unvacated and unstayed pending appeal for a period of thirty (30)
  consecutive days after the entry or filing thereof, as applicable. 

      (f)     Borrower
  shall become insolvent, or shall suffer or consent to or apply for the appointment
  of a receiver, trustee, custodian or liquidator of itself or any of its property,
  or shall generally fail to pay its debts as they become due, or shall make a
  general assignment for the benefit of creditors; Borrower shall file a voluntary
  petition in bankruptcy, or seeking reorganization, in order to effect a plan
  or other arrangement with creditors or any other relief under the Bankruptcy
  Code, or under any state or federal law granting relief to debtors, whether
  now or hereafter in effect; or any involuntary petition or proceeding pursuant
  to the Bankruptcy Code or any other applicable state or federal law relating
  to bankruptcy, reorganization or other relief for debtors is filed or commenced
  against Borrower, or Borrower shall file an answer admitting the jurisdiction
  of the court and the material allegations of any involuntary petition; or Borrower
  shall be adjudicated a bankrupt, or an order for relief shall be entered against
  Borrower by any court of competent jurisdiction under the Bankruptcy Code or
  any other applicable state or federal law relating to bankruptcy, reorganization
  or other relief for debtors. 

      (g)    
  The dissolution or liquidation of Borrower; or Borrower shall take action seeking
  to effect the dissolution or liquidation of Borrower. 

      (h)    
  The amendment of any of the subordination provisions of the Specified Indenture
  (as hereinafter defined) or the definition of “Designated Senior Indebtedness”
  contained therein without the prior written consent of Bank. 

      (i)     The
  occurrence of a Change of Control. For purposes hereof, “Change of Control”
  means an event or series of events by which: 


       
    (i)     any “person” or “group” (as such terms are used
    in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 and the
    regulations promulgated thereunder (as amended, supplemented and/or recodified
    from time to time, the “Exchange Act”), but 



 -12-



  

   excluding any employee
    benefit plan of such person or its subsidiaries, and any person or entity
    acting in its capacity as trustee, agent or other fiduciary or administrator
    of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3
    and 13d-5 under the Exchange Act, except that a person or group shall be deemed
    to have “beneficial ownership” of all securities that such person or group
    has the right to acquire (such right, an “option right”), whether such right
    is exercisable immediately or only after the passage of time), directly or
    indirectly, of 25% or more of the equity securities of Borrower entitled to
    vote for members of the board of directors or equivalent governing body of
    Borrower on a partially-diluted basis (i.e., taking into account all such
    securities that such person or group has the right to acquire pursuant to
    any option right); or 

        (ii)     during
    any period of 12 consecutive months, a majority of the members of the board
    of directors or other equivalent governing body of Borrower cease to be composed
    of individuals (A) who were members of that board or equivalent governing
    body on the first day of such period, (B) whose election or nomination to
    that board or equivalent governing body was approved by individuals referred
    to in clause (A) above constituting at the time of such election or nomination
    at least a majority of that board or equivalent governing body or (C) whose
    election or nomination to that board or other equivalent governing body was
    approved by individuals referred to in clauses (A) and (B) above constituting
    at the time of such election or nomination at least a majority of that board
    or equivalent governing body.



      (j)     The
  sale, transfer, hypothecation, assignment or encumbrance (other than any of
  the foregoing resulting in a Permitted Lien), whether voluntary, involuntary
  or by operation of law, without Bank’s prior written consent, of all or any
  part of or interest in any real property collateral required hereby. 

      SECTION 6.2.    
  REMEDIES. Upon the occurrence of an Event of Default, Bank may: 

      (a)     declare
  the Loan Commitment to be terminated, whereupon the Loan Commitment shall automatically
  be terminated; 

      (b)     declare
  the outstanding amount of all Obligations to be immediately due and payable,
  whereupon such amount shall become and be immediately due and payable, without
  presentment, demand, protest or further notice of any kind, all of which are
  hereby expressly waived by Borrower; and

      (c)     exercise
  all rights and remedies available under the Loan Documents or applicable law;
  

 provided
  that, upon the occurrence of any event specified in Section 6.1(f), the Loan
   Commitment shall
  automatically terminate and the outstanding amount of all Obligations shall
  automatically become and be immediately due and payable without presentment,
  demand, protest or further notice of any kind, all of which are hereby expressly
  waived by Borrower. The rights provided for herein and in the other Loan Documents
  (i) may be exercised at any time and from time to time so long as an Event of
  Default has occurred and is continuing unwaived and (ii) are cumulative and
  are not exclusive of any other rights, powers, privileges or remedies provided
  by law or in equity, or under any other instrument, document or agreement now
  existing or hereafter arising. 

 -13-



  
 ARTICLE
  VII

  MISCELLANEOUS
  

      SECTION 7.1.     NO
  WAIVER. No delay, failure or discontinuance of Bank in exercising any right,
  power or remedy under any of the Loan Documents shall affect or operate as a
  waiver of such right, power or remedy; nor shall any single or partial exercise
  of any such right, power or remedy preclude, waive or otherwise affect any other
  or further exercise thereof or the exercise of any other right, power or remedy.
  Any waiver, permit, consent or approval of any kind by Bank of any breach of
  or default under any of the Loan Documents must be in writing and shall be effective
  only to the extent set forth in such writing. 

     
  SECTION 7.2.     NOTICES. All notices, requests and demands
  which any party is required or may desire to give to any other party under any
  provision of this Agreement must be in writing delivered to each party at the
  following address: 

	     	BORROWER:     	 WIND RIVER
      SYSTEMS, INC.

      500 Wind River Way

      Alameda, CA 94501

       Attention: Treasury

      Telephone: 510.749.2656

      Fax: 510.749.2880

          
	 	 BANK:	 WELLS FARGO
      BANK, NATIONAL ASSOCIATION

      East Bay Technology Regional Commercial Banking Office

      One Kaiser Plaza, Suite 850

      Oakland, CA 94612

      Attention: Nuzha Bukhari

      Telephone: 510.464.1706

      Fax: 510.839.2296


 or to such other address
  as any party may designate by written notice to all other parties. Each such
  notice, request and demand shall be deemed given or made as follows: (a) if
  sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier
  of the date of receipt or three (3) days after deposit in the U.S. mail, first
  class and postage prepaid; and (c) if sent by telecopy, upon receipt. 

      SECTION 7.3.     COSTS,
  EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay to Bank promptly and in any
  event within five (5) business days following receipt of demand therefor the
  full amount of all payments, advances, charges, reasonable costs and expenses,
  including reasonable attorneys’ fees (to include outside attorneys’ fees
  and all allocated costs of Bank’s in-house counsel), expended or incurred by
  Bank in connection with (a) the negotiation and preparation of this Agreement
  and the other Loan Documents (to include a $10,000.00 documentation fee plus
  reasonable outside attorneys’ fees in an amount not to exceed $10,000.00);
  (b) Bank’s continued administration hereof and of the other Loan Documents
  the negotiation and preparation of any amendments and waivers hereto and thereto,
  (c) the enforcement of Bank’s rights and/or the collection of any amounts which
  become due to Bank under any of the Loan Documents, and (d) the prosecution
  or defense of any action in any way related to any of the Loan Documents, including
  without limitation, any action for declaratory relief, whether incurred at the
  trial or appellate level, in an arbitration proceeding or otherwise, and including
  any of the foregoing incurred in connection with any bankruptcy proceeding 

  -14-



  
 (including without limitation,
  any adversary proceeding, contested matter or motion brought by Bank or any
  other person) relating to any Borrower or any other person or entity. 

      SECTION 7.4.    
  SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and inure to the
  benefit of the heirs, executors, administrators, legal representatives, successors
  and assigns of the parties; provided
  that Borrower may not assign or transfer its interest hereunder without Bank’s
  prior written consent. Bank reserves the right to sell, assign, transfer, negotiate
  or grant participations in all or any part of, or any interest in, Bank’s rights
  and benefits under each of the Loan Documents. In connection therewith, Bank
  may disclose all documents and information which Bank now has or may hereafter
  acquire relating to any credit subject hereto, Borrower or its business, or
  any collateral required hereunder. 

      SECTION 7.5.    
  ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents constitute
  the entire agreement between Borrower and Bank with respect to each credit subject
  hereto and supersede all prior negotiations, communications, discussions and
  correspondence concerning the subject matter hereof. This Agreement and the
  other Loan Documents may be amended or modified only in writing signed by each
  party hereto. 

      SECTION 7.6.    
  NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into for the
  sole protection and benefit of the parties hereto and their respective permitted
  successors and assigns, and no other person or entity shall be a third party
  beneficiary of, or have any direct or indirect cause of action or claim in connection
  with, this Agreement or any other of the Loan Documents to which it is not a
  party. 

      SECTION 7.7.     TIME.
  Time is of the essence of each and every provision of this Agreement and each
  other of the Loan Documents. 

      SECTION 7.8.     SEVERABILITY
  OF PROVISIONS. If any provision of this Agreement shall be prohibited by or
  invalid under applicable law, such provision shall be ineffective only to the
  extent of such prohibition or invalidity without invalidating the remainder
  of such provision or any remaining provisions of this Agreement. 

      SECTION 7.9.     COUNTERPARTS.
  This Agreement may be executed in any number of counterparts, each of which
  when executed and delivered shall be deemed to be an original, and all of which
  when taken together shall constitute one and the same Agreement. 

      SECTION 7.10.     GOVERNING
  LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
  INTERNAL LAWS OF THE STATE OF CALIFORNIA. 

      SECTION 7.11.     ARBITRATION.
  

      (a)    
  Arbitration.
  The parties hereto agree, upon demand by any party, to submit to binding arbitration
  all claims, disputes and controversies between or among them (and their respective
  employees, officers, directors, attorneys, and other agents), whether in tort,
  contract or otherwise arising out of or relating to in any way (i) the loan
  and related Loan Documents which are the subject of this Agreement and its negotiation,
  execution, collateralization, administration, repayment, modification, extension,
  substitution, formation, inducement, enforcement, default or termination; or
  (ii) requests for additional credit. 

 Credit Agreement-Final -15-



  
     
  (b)     Governing
  Rules. Any arbitration proceeding will (i) proceed in
  a location in California selected by the American Arbitration Association (“AAA”);
  (ii) be governed by the Federal Arbitration Act (Title 9 of the United States
  Code), notwithstanding any conflicting choice of law provision in any of the
  documents between the parties; and (iii) be conducted by the AAA, or such other
  administrator as the parties shall mutually agree upon, in accordance with the
  AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
  is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
  costs in which case the arbitration shall be conducted in accordance with the
  AAA’s optional procedures for large, complex commercial disputes (the commercial
  dispute resolution procedures or the optional procedures for large, complex
  commercial disputes to be referred to, as applicable, as the “Rules”). If there
  is any inconsistency between the terms hereof and the Rules, the terms and procedures
  set forth herein shall control. Any party who fails or refuses to submit to
  arbitration following a demand by any other party shall bear all costs and expenses
  incurred by such other party in compelling arbitration of any dispute. Nothing
  contained herein shall be deemed to be a waiver by any party that is a bank
  of the protections afforded to it under 12 U.S.C. §9191 or any similar
  applicable state law. 

     
  (c)     No
  Waiver of Provisional Remedies, Self-Help and Foreclosure.
  The arbitration requirement does not limit the right of any party to (i) foreclose
  against real or personal property collateral; (ii) exercise self-help remedies
  relating to collateral or proceeds of collateral such as setoff or repossession;
  or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
  relief, attachment or the appointment of a receiver, before during or after
  the pendency of any arbitration proceeding. This exclusion does not constitute
  a waiver of the right or obligation of any party to submit any dispute to arbitration
  or reference hereunder, including those arising from the exercise of the actions
  detailed in sections (i), (ii) and (iii) of this paragraph. 

     (d)     Arbitrator
  Qualifications and Powers . Any
  arbitration proceeding in which the amount
  in controversy is $5,000,000.00 or less will be decided by a single arbitrator
  selected according to the Rules, and who shall not render an award of greater
  than $5,000,000.00. Any dispute in which the amount in controversy exceeds $5,000,000.00
  shall be decided by majority vote of a panel of three arbitrators; provided
  that all three arbitrators must actively participate in all hearings and deliberations.
  The arbitrator will be a neutral attorney licensed in the State of California
  or a neutral retired judge of the state or federal judiciary of California,
  in either case with a minimum of ten years experience in the substantive law
  applicable to the subject matter of the dispute to be arbitrated. The arbitrator
  will determine whether or not an issue is arbitratable and will give effect
  to the statutes of limitation in determining any claim. In any arbitration proceeding
  the arbitrator will decide (by documents only or with a hearing at the arbitrator’s
  discretion) any pre-hearing motions which are similar to motions to dismiss
  for failure to state a claim or motions for summary adjudication. The arbitrator
  shall resolve all disputes in accordance with the substantive law of California
  and may grant any remedy or relief that a court of such state could order or
  grant within the scope hereof and such ancillary relief as is necessary to make
  effective any award. The arbitrator shall also have the power to award recovery
  of all costs and fees, to impose sanctions and to take such other action as
  the arbitrator deems necessary to the same extent a judge could pursuant to
  the Federal Rules of Civil Procedure, the California Rules of Civil Procedure
  or other applicable law. Judgment upon the award rendered by the arbitrator
  may be entered in any court having jurisdiction. The institution and maintenance
  of an action for judicial relief or pursuit of a provisional or ancillary remedy
  shall not constitute a waiver of the right of any party, including the plaintiff,
  to submit the controversy or claim to arbitration if any other party contests
  such action for judicial relief. 

 -16-



  
     
  (e)     Discovery.
  In any arbitration proceeding discovery will be permitted in accordance with
  the Rules. All discovery shall be expressly limited to matters directly relevant
  to the dispute being arbitrated and must be completed no later than 20 days
  before the hearing date and within 180 days of the filing of the dispute with
  the AAA. Any requests for an extension of the discovery periods, or any discovery
  disputes, will be subject to final determination by the arbitrator upon a showing
  that the request for discovery is essential for the party’s presentation and
  that no alternative means for obtaining information is available. 

      (f)    
  Class Proceedings
  and Consolidations. The resolution of any dispute arising
  pursuant to the terms of this Agreement shall be determined by a separate arbitration
  proceeding and such dispute shall not be consolidated with other disputes or
  included in any class proceeding. 

     (g)    
  Payment Of Arbitration
  Costs And Fees. The arbitrator shall award all
  costs and expenses
  of the arbitration proceeding.

     (h)    
  Real Property Collateral;
  Judicial Reference. Notwithstanding
  anything herein to the contrary,
  no dispute shall be submitted to arbitration if the dispute concerns indebtedness
  secured directly or indirectly, in whole or in part, by any real property unless
  (i) the holder of the mortgage, lien or security interest specifically elects
  in writing to proceed with the arbitration, or (ii) all parties to the arbitration
  waive any rights or benefits that might accrue to them by virtue of the single
  action rule statute of California, thereby agreeing that all indebtedness and
  obligations of the parties, and all mortgages, liens and security interests
  securing such indebtedness and obligations, shall remain fully valid and enforceable.
  If any such dispute is not submitted to arbitration, the dispute shall be referred
  to a referee in accordance with California Code of Civil Procedure Section 638
  et seq., and this general reference agreement is intended to be specifically
  enforceable in accordance with said Section 638. A referee with the qualifications
  required herein for arbitrators shall be selected pursuant to the AAA’s
  selection procedures. Judgment upon the decision rendered by a referee shall
  be entered in the court in which such proceeding was commenced in accordance
  with California Code of Civil Procedure Sections 644 and 645. 

      (i)    
  Miscellaneous.
  To the maximum extent practicable, the AAA, the arbitrators and the parties
  shall take all action required to conclude any arbitration proceeding within
  180 days of the filing of the dispute with the AAA. No arbitrator or other party
  to an arbitration proceeding may disclose the existence, content or results
  thereof, except for disclosures of information by a party required in the ordinary
  course of its business or by applicable law or regulation. If more than one
  agreement for arbitration by or between the parties potentially applies to a
  dispute, the arbitration provision most directly related to the Loan Documents
  or the subject matter of the dispute shall control. This arbitration provision
  shall survive termination, amendment or expiration of any of the Loan Documents
  or any relationship between the parties. 

      The
  indebtedness evidenced hereby is Designated Senior Indebtedness as defined in
  and for all purposes set forth in that certain Indenture, dated as of December
  10, 2001 (the “Specified Indenture”), by and between Borrower and Bankers Trust
  Company, as Trustee.  

 -17-



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

	 WIND
      RIVER SYSTEMS, INC.,	 	WELLS
      FARGO BANK,
	 a
      Delaware corporation	 	NATIONAL
      ASSOCIATION
	 	 	 	 	 
	By:
       	/s/
      Michael W. Zellner	 	By:	/s/
      Nuzha Bukari
	 	 
	 	 	 

	Name:     	Michael
      W. Zellner	 	Name:     	Nuzha
      Bukhari
	Title:	Vice
      President, Finance &	 	Title:	Vice
      President
	 	Administration,
      Chief	     	 	 
	 	Financial
      Officer and	 	 	 
	 	Secretary	 	 	 


 -18-



  
 EXHIBIT
  A  

 FORM OF LOAN
  COMMITMENT NOTE

	$37,400,000.00	 Oakland,
      California

      April 15, 2003 


      FOR VALUE RECEIVED, the
  undersigned WIND RIVER SYSTEMS, INC., a Delaware corporation (“Borrower”), promises
  to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its
  office at One Kaiser Plaza, Suite 850, Oakland, California, or at such other
  place as the holder hereof may designate, in lawful money of the United States
  of America and in immediately available funds, the principal sum of Thirty-Seven
  Million Four Hundred Thousand Dollars ($37,400,000.00), or so much thereof as
  may be advanced and be outstanding, with interest thereon, to be computed on
  each advance from the date of its disbursement as set forth herein. 

 DEFINITIONS: 

      As used herein, the following
  terms shall have the meanings set forth after each, and any other term defined
  in this Note shall have the meaning set forth at the place defined; provided
  that any capitalized term used but not otherwise defined herein shall have the
  meaning set forth in that certain Credit Agreement, dated as of April 15, 2003
  (as amended, supplemented and/or otherwise modified from time to time, the “Credit
  Agreement”), between Bank and Borrower): 

     “Business Day”
  means any day except a Saturday, Sunday or any other day on which commercial
  banks in California are authorized or required by law to close. 

     
  “Fixed Rate
  Term” means a period commencing on a Business Day and
  continuing for 1, 2, 3, 6, 9 or 12 months, as designated by Borrower, during
  which all or a portion of the outstanding principal balance of this Note bears
  interest determined in relation to LIBOR; provided that no Fixed Rate
  Term may be selected for a principal amount less than $100,000.00
  or an integral multiple thereof;
  provided
  further that
  no Fixed Rate Term shall extend beyond the scheduled
  maturity date hereof. If any Fixed Rate Term would end on a day which is not
  a Business Day, then such Fixed Rate Term shall be extended to the next succeeding
  Business Day. 

     
  “LIBOR”
  means the rate per annum and determined pursuant to the following formula:

	 	 Base
      LIBOR  
	LIBOR = 	


	 	 100%
      - LIBOR Reserve Percentage 



        (i)    
    “Base LIBOR” means the rate per annum for United States dollar deposits
    quoted by Bank as the Inter-Bank Market Offered Rate, with the understanding
    that such rate is quoted by Bank for the purpose of calculating effective
    rates of interest for loans making reference thereto, on the first day of
    a Fixed Rate Term for delivery of funds on said date for a period of time
    approximately equal to the number of days in such Fixed Rate Term and in an
    amount approximately equal to the principal amount to which such Fixed Rate
    Term applies. Borrower understands and agrees that Bank may base its quotation
    of the Inter-Bank Market Offered Rate upon such offers or other market indicators
    of the Inter-Bank Market as Bank in its discretion deems appropriate including,



 A-1



  

   but not limited to, the
    rate offered for U.S. dollar deposits on the London Inter-Bank Market. 

        (ii)    
    “LIBOR Reserve Percentage” means the reserve percentage prescribed
    by the Board of Governors of the Federal Reserve System (or any successor)
    for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal
    Reserve Board, as amended), adjusted by Bank for expected changes in such
    reserve percentage during the applicable Fixed Rate Term. 



     “Note”
  means this Loan Commitment Note as amended, supplemented and/or otherwise modified
  from time to time in accordance with the provisions hereof and of the Credit
  Agreement.

     “Prime Rate”
  means at any time the rate of interest most recently announced within Bank at
  its principal office as its Prime Rate, with the understanding that the Prime
  Rate is one of Bank’s base rates and serves as the basis upon which effective
  rates of interest are calculated for those loans making reference thereto, and
  is evidenced by the recording thereof after its announcement in such internal
  publication or publications as Bank may designate. 

 INTEREST: 

     
  (a)     Interest.
  The outstanding principal balance of this Note shall bear interest (computed
  on the basis of a 360-day year, actual days elapsed) either (i) at a fluctuating
  rate per annum equal to the Prime Rate in effect from time to time, or (ii)
  at a fixed rate per annum determined by Bank to be four-tenths of one percent
  (0.40%) above LIBOR in effect on the first day of the applicable Fixed Rate
  Term. When any interest, fee or charge payable hereunder is determined in relation
  to the Prime Rate, each change in the rate of interest hereunder shall become
  effective on the date each Prime Rate change is announced within Bank. With
  respect to each LIBOR selection hereunder, Bank is hereby authorized to note
  the date, principal amount, interest rate and Fixed Rate Term applicable thereto
  and any payments made thereon on Bank’s books and records (either manually or
  by electronic entry) and/or on any schedule attached to this Note, which notations
  shall be prima facie evidence of the accuracy of the information noted; provided
  that any failure by Bank to make any such notation shall not affect Borrower’s
  liability in respect of the amounts outstanding hereunder. 

     (b)    
  Selection of Interest
  Rate Options. At any time any portion of this Note bears
  interest determined in relation
  to LIBOR, it may be continued by Borrower at the end of the Fixed Rate Term
  applicable thereto so that all or a portion thereof bears interest determined
  in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term designated
  by Borrower. At any time any portion of this Note bears interest determined
  in relation to the Prime Rate, Borrower may convert all or a portion thereof
  so that it bears interest determined in relation to LIBOR for a Fixed Rate Term
  designated by Borrower. At such time as Borrower requests an advance hereunder
  or wishes to select a LIBOR option for all or a portion of the outstanding principal
  balance hereof, and at the end of each Fixed Rate Term, Borrower shall give
  Bank notice specifying: (i) the interest rate option selected by Borrower; (ii)
  the principal amount subject thereto; and (iii) for each LIBOR selection, the
  length of the applicable Fixed Rate Term. Any such notice may be given by telephone
  (or such other electronic method as Bank may permit) so long as, with respect
  to each LIBOR selection, (A) if requested by Bank, Borrower provides to Bank
  written confirmation thereof not later than three (3) Business Days after such
  notice is given, and (B) such notice is given to Bank prior to 10:00 a.m. on
  the first day of the Fixed Rate Term, or at a later time during any Business
  Day if Bank, at it’s sole option but 

 A-2



  
 without obligation to do
  so, accepts Borrower’s notice and quotes a fixed rate to Borrower. If Borrower
  does not immediately accept a fixed rate when quoted by Bank, the quoted rate
  shall expire and any subsequent LIBOR request from Borrower shall be subject
  to a redetermination by Bank of the applicable fixed rate. If no specific designation
  of interest is made at the time any advance is requested hereunder or at the
  end of any Fixed Rate Term, Borrower shall be deemed to have made a LIBOR interest
  selection for such advance or the principal amount to which such Fixed Rate
  Term applied for a Fixed Rate Term of one month. 

      (c)    
  Taxes and Regulatory
  Costs. Borrower shall pay to Bank immediately upon demand
  (provided that such demand is made within 180 days of Bank becoming aware of
  any additional amounts referred to in the following clauses (i) and (ii) of
  this Section (c) and in any event not more than 180 days after all amounts otherwise
  payable hereunder have been paid in full), in addition to any other amounts
  due or to become due hereunder, any and all (i) withholdings, interest equalization
  taxes, stamp taxes or other taxes (except income and franchise taxes) imposed
  by any domestic or foreign governmental authority and related in any manner
  to LIBOR, and (ii) future, supplemental, emergency or other changes in the LIBOR
  Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance
  Corporation, or similar requirements or costs imposed by any domestic or foreign
  governmental authority or resulting from compliance by Bank with any request
  or directive (whether or not having the force of law) from any central bank
  or other governmental authority after the date hereof and related in any manner
  to LIBOR to the extent they are not included in the calculation of LIBOR. In
  determining which of the foregoing are attributable to any LIBOR option available
  to Borrower hereunder, any reasonable allocation made by Bank among its operations
  shall be conclusive and binding upon Borrower. 

      If Borrower is required
  to pay any amount to Bank pursuant to this Section (c), then Bank shall use
  reasonable efforts (consistent with legal and regulatory restrictions) to change
  the jurisdiction of its lending office respecting LIBOR advances so as to eliminate
  any such additional payment by Borrower which may thereafter accrue, if such
  change in the sole and absolute judgment of Bank (acting in good faith) is not
  otherwise disadvantageous to Bank. 

      If Borrower pays any additional
  amount under this Section (c) to Bank and Bank determines it is sole discretion
  acting in good faith that it has actually received or realized in connection
  therewith any refund or any reduction of, or credit against, its tax liabilities
  in or with respect to the taxable year in which the additional amount is paid
  (a “Tax Benefit”), Bank shall pay to Borrower such amount that Bank
  shall, in its sole discretion acting in good faith, determine is equal to the
  net benefit, after tax, which was obtained by Bank in such year as a consequence
  of such Tax Benefit; provided
  that (A) Bank may determine, acting in good faith, in its sole discretion consistent
  with the policies of Bank, whether to seek a Tax Benefit; and (B) nothing in
  this Section (c) shall require Bank to disclose any confidential information
  to Borrower (including, without limitation, its tax returns). 

      (d)    
  Payment of
  Interest. Interest accrued on this Note shall be payable
  monthly, in arrears, on the fifteenth day of each month, commencing May 15,
  2003, and on the maturity date of this Note; provided that if any such
  interest due date is not a Business Day, then such payment shall be due on the
  next succeeding Business Day. 

      (e)    
  Default Interest.
  From and after the occurrence of an Event of Default and during the continuation
  thereof so long as the same shall remain unwaived, the outstanding principal
  balance of this Note shall bear interest until paid in full at an increased
  rate per annum (computed on the basis of a 360-day year, actual days elapsed)
  equal to three percent (3.00%) above the rate of interest from time to time
  otherwise applicable to this Note. 

 A-3 



  
 BORROWINGS; REPAYMENTS; PREPAYMENTS;
  APPLICATION OF PAYMENTS: 

      (a)    
  Borrowing and
  Repayment. Borrower may from time to time during the
  term of this Note borrow and partially or wholly repay its outstanding borrowings,
  subject to all of the limitations, terms and conditions of this Note and of
  any document executed in connection with or governing this Note; provided
  that amounts repaid or prepaid may not be reborrowed; provided further
  that the outstanding amount of all advances made to Borrower under this Note
  shall not at any time exceed the principal amount stated above. Each advance
  requested by Borrower hereunder shall be in a minimum principal amount equal
  to $100,000.00 or an integral multiple thereof. The unpaid principal balance
  of this Note at any time shall be the total amounts advanced hereunder by the
  holder hereof less the amount of principal payments made hereon by or for Borrower,
  which balance may be endorsed hereon from time to time by the holder. The outstanding
  principal balance of this Note (together with all amounts outstanding hereunder
  or in respect hereof) shall be due and payable in full on April 15, 2005.

      (b)    
  Advances.
  Advances hereunder, to the total amount of the principal sum stated above, may
  be made by the holder at the oral or written request of (i) Dianne DaRosa-White
  or Tyler Painter, any one acting alone, who are authorized to request advances
  and direct the disposition of any advances until written notice of the revocation
  of such authority is received by the holder at the office designated above,
  or (ii) any Person, with respect to advances deposited to the credit of any
  deposit account of Borrower, which advances, when so deposited, shall be conclusively
  presumed to have been made to or for the benefit of Borrower regardless of the
  fact that persons other than those authorized to request advances may have authority
  to draw against such account. The holder shall have no obligation to determine
  whether any person requesting an advance is or has been authorized by Borrower.
  

     (c)    
  Prepayments.

             
  (i)     Prime
  Rate. Borrower may on one (1) Business Day prior written
  notice to Bank, prepay principal on any portion of this Note that bears interest
  determined in relation to the Prime Rate at any time, in any amount and without
  penalty, together with accrued interest on the amount being prepaid. 

            
  (ii)     LIBOR.
  Borrower may, on three (3) Business Days prior written notice to Bank, prepay
  principal on any portion of this Note which bears interest determined in relation
  to LIBOR at any time and in the minimum amount of $100,000.00 or an integral
  multiple thereof, together with accrued interest on the amount being prepaid;
  provided that, if the outstanding principal balance of such portion of
  this Note is less than such amount, the minimum prepayment amount shall be the
  entire outstanding principal balance thereof; provided further
  that, in consideration of Bank providing Borrower with the ability to repay
  or prepay any portion of an advance that bears interest determined in relation
  to LIBOR on any day other than the last day of the Fixed Rate Term therefor
  (whether an optional prepayment, a mandatory prepayment, a payment upon acceleration
  or otherwise), Borrower shall pay to Bank promptly upon demand a fee which is
  the sum of the discounted monthly differences for each month from the month
  of prepayment through the month in which such Fixed Rate Term matures, calculated
  as follows for each such month: 


       
    (i)     Determine the amount of interest which would have
    accrued each month on the amount prepaid at the interest rate applicable to
    such amount had it remained outstanding until the last day of the Fixed Rate
    Term applicable thereto. 



 A-4



  

        (ii)     Subtract
    from the amount determined in (i) above the amount of interest which would
    have accrued for the same month on the amount prepaid for the remaining term
    of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new
    loans made for such term and in a principal amount equal to the amount prepaid.
    

        (iii)    
    If the result obtained in (ii) for any month is greater than zero, discount
    that difference by LIBOR used in (ii) above. 



 Borrower acknowledges that
  prepayment of such amount may result in Bank incurring additional costs, expenses
  and/or liabilities, and that it is difficult to ascertain the full extent of
  such costs, expenses and/or liabilities. Borrower, therefore, agrees to pay
  the above-described prepayment fee and agrees that such amount represents a
  reasonable estimate of the prepayment costs, expenses and/or liabilities of
  Bank. If Borrower fails to pay such amount when due, such amount shall thereafter
  bear interest until paid at a rate per annum three percent (3.00%) above the
  Prime Rate in effect from time to time (computed on the basis of a 360-day year,
  actual days elapsed). 

      (d)    
  Application
  of Payments. Each payment (including, without limitation,
  prepayments) made on this Note shall be credited first, to any fees, costs or
  expenses due and payable and outstanding under the Loan Documents, second, to
  interest then due and third, to the outstanding principal balance hereof. All
  payments credited to principal shall be applied first, to the outstanding principal
  balance of this Note which bears interest determined in relation to the Prime
  Rate, if any, and second, to the outstanding principal balance of this Note
  which bears interest determined in relation to LIBOR, with such payments applied
  to the oldest Fixed Rate Term first. 

 PERMANENT REDUCTIONS OR TERMINATION
  OF THE UNUSED LOAN COMMITMENT: 

      Borrower may, at any time,
  by notice to Bank (which notice, once given, shall be irrevocable), permanently
  reduce or terminate the unused portion of the Loan Commitment either in whole
  or in part; provided that each partial reduction shall be in
  an aggregate amount of not less than $100,000.00 or an integral multiple thereof.
  

 EVENTS OF DEFAULT: 

      This Note is made pursuant
  to and is subject to the terms and conditions of the Credit Agreement. Any Event
  of Default (as that term is defined in the Credit Agreement) shall constitute
  an “Event of Default” hereunder. 

 GENERAL PROVISIONS: 

       (a)    
  Successors, Assignment. This Note shall be binding upon and inure to
  the benefit of the heirs, executors, administrators, legal representatives,
  successors and assigns of Borrower and the holder hereof; provided that
  Borrower may not assign or transfer its interest hereunder without the express
  prior written consent of the holder hereof.

      (b)    
  Entire Agreement;
  Amendment. This Note and the other Loan Documents constitute
  the entire agreement between Borrower and Bank with respect to each credit subject
  hereto and supersede all prior negotiations, communications, discussions and
  correspondence 

 A-5



  
 concerning the subject matter
  hereof. This Note may be amended or modified only in writing signed by Borrower
  and the holder hereof. 

      (c)    
  Arbitration.
  This Note is expressly subject to the terms and provisions contained in Section
  7.11 of the Credit Agreement regarding arbitration. 

      (d)    
  GOVERNING LAW.
  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
  LAWS OF THE STATE OF CALIFORNIA. 

     The indebtedness
  evidenced hereby is Designated Senior Indebtedness as defined in and for all
  purposes set forth in that certain Indenture, dated as of December 10, 2001,
  by and between Borrower and Bankers Trust Company, as Trustee. 

 A-6



  
      IN WITNESS WHEREOF, the
  undersigned has executed this Note on the date first written above. 

 WIND RIVER SYSTEMS, INC.,

  a Delaware corporation

	By:

      Name:     

      Title:	____EXHIBIT_____________________

      ________________________________

      ________________________________ 


A-7



  
 EXHIBIT
  B  

 FORM OF LOAN
  NOTE

	$20,000,000.00	 Oakland,
      California

      April 15, 2003 


      FOR VALUE RECEIVED, the
  undersigned WIND RIVER SYSTEMS, INC., a Delaware corporation (“Borrower”), promises
  to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its
  office at One Kaiser Plaza, Suite 850, Oakland, California, or at such other
  place as the holder hereof may designate, in lawful money of the United States
  of America and in immediately available funds, the principal sum of Twenty Million
  Dollars ($20,000,000.00), or so much thereof as may be advanced and be outstanding,
  with interest thereon, to be computed on each advance from the date of its disbursement
  as set forth herein.

 DEFINITIONS: 

      As used herein, the following
  terms shall have the meanings set forth after each, and any other term defined
  in this Note shall have the meaning set forth at the place defined; provided
  that any capitalized term used but not otherwise defined herein shall have the
  meaning set forth in that certain Credit Agreement, dated as of April 15, 2003
  (as amended, supplemented and/or otherwise modified from time to time, the “Credit
  Agreement”), between Bank and Borrower): 

     “Business Day”
  means any day except a Saturday, Sunday or any other day on which commercial
  banks in California are authorized or required by law to close. 

     “Fixed Rate Term”
  means a period commencing on a Business Day and continuing for 1, 2, 3, 6, 9
  or 12 months, as designated by Borrower, during which all or a portion of the
  outstanding principal balance of this Note bears interest determined in relation
  to LIBOR; provided that no Fixed Rate Term may be selected for a principal
  amount less than $100,000.00 or an integral multiple thereof; provided
  further that no Fixed Rate Term shall extend beyond the scheduled maturity
  date hereof. If any Fixed Rate Term would end on a day which is not a Business
  Day, then such Fixed Rate Term shall be extended to the next succeeding Business
  Day. 

      “LIBOR”
  means the rate per annum and determined pursuant to the following formula: 

	 	 Base
      LIBOR  
	LIBOR = 	 

	 	 100%
      - LIBOR Reserve Percentage 



        (i)    
    “Base LIBOR” means the rate per annum for United States dollar deposits
    quoted by Bank as the Inter-Bank Market Offered Rate, with the understanding
    that such rate is quoted by Bank for the purpose of calculating effective
    rates of interest for loans making reference thereto, on the first day of
    a Fixed Rate Term for delivery of funds on said date for a period of time
    approximately equal to the number of days in such Fixed Rate Term and in an
    amount approximately equal to the principal amount to which such Fixed Rate
    Term applies. Borrower understands and agrees that Bank may base its quotation
    of the Inter-Bank Market Offered Rate upon such offers or other market indicators
    of the Inter-Bank Market as Bank in its discretion deems appropriate including,



 B-1-



  

   but not limited to, the
    rate offered for U.S. dollar deposits on the London Inter-Bank Market. 

        (ii)    
    “LIBOR Reserve Percentage” means the reserve percentage prescribed
    by the Board of Governors of the Federal Reserve System (or any successor)
    for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal
    Reserve Board, as amended), adjusted by Bank for expected changes in such
    reserve percentage during the applicable Fixed Rate Term. 



     “Note”
  means this Loan Note as amended, supplemented and/or otherwise modified from
  time to time in accordance with the provisions hereof and of the Credit Agreement.

     “Prime Rate”
  means at any time the rate of interest most recently announced within Bank at
  its principal office as its Prime Rate, with the understanding that the Prime
  Rate is one of Bank’s base rates and serves as the basis upon which effective
  rates of interest are calculated for those loans making reference thereto, and
  is evidenced by the recording thereof after its announcement in such internal
  publication or publications as Bank may designate. 

 INTEREST: 

     
  (a)     Interest.
  The outstanding principal balance of this Note shall bear interest (computed
  on the basis of a 360-day year, actual days elapsed) either (i) at a fluctuating
  rate per annum equal to the Prime Rate in effect from time to time, or (ii)
  (A) so long as the Securities Collateral secures this Note, four-tenths percent
  (0.4%) above LIBOR in effect on the first day of each Fixed Rate Term, or (B)
  so long as the Securities Collateral does not secure this Note, one and one
  quarter percent (1.25%) above LIBOR in effect on the first day of each Fixed
  Rate Term. When any interest, fee or charge payable hereunder is determined
  in relation to the Prime Rate, each change in the rate of interest hereunder
  shall become effective on the date each Prime Rate change is announced within
  Bank. With respect to each LIBOR selection hereunder, Bank is hereby authorized
  to note the date, principal amount, interest rate and Fixed Rate Term applicable
  thereto and any payments made thereon on Bank’s books and records (either
  manually or by electronic entry) and/or on any schedule attached to this Note,
  which notations shall be prima facie evidence of the accuracy of the information
  noted; provided that any failure by Bank to make any such notation shall
  not affect Borrower’s liability in respect of the amounts outstanding hereunder.
  

     (b)
       Selection
  of Interest Rate Options. At any time any portion of
  this Note bears interest
  determined in relation to LIBOR, it may be continued by Borrower at the end
  of the Fixed Rate Term applicable thereto so that all or a portion thereof bears
  interest determined in relation to the Prime Rate or to LIBOR for a new Fixed
  Rate Term designated by Borrower. At any time any portion of this Note bears
  interest determined in relation to the Prime Rate, Borrower may convert all
  or a portion thereof so that it bears interest determined in relation to LIBOR
  for a Fixed Rate Term designated by Borrower. At such time as Borrower requests
  an advance hereunder or wishes to select a LIBOR option for all or a portion
  of the outstanding principal balance hereof, and at the end of each Fixed Rate
  Term, Borrower shall give Bank notice specifying: (i) the interest rate option
  selected by Borrower; (ii) the principal amount subject thereto; and (iii) for
  each LIBOR selection, the length of the applicable Fixed Rate Term. Any such
  notice may be given by telephone (or such other electronic method as Bank may
  permit) so long as, with respect to each LIBOR selection, (A) if requested by
  Bank, Borrower provides to Bank written confirmation thereof not later than
  three (3) Business Days after such notice is given, and (B) such notice is given
  to Bank prior to 10:00 a.m. on the first day of the 

 B-2-



  
 Fixed Rate Term, or at a
  later time during any Business Day if Bank, at it’s sole option but without
  obligation to do so, accepts Borrower’s notice and quotes a fixed rate to Borrower.
  If Borrower does not immediately accept a fixed rate when quoted by Bank, the
  quoted rate shall expire and any subsequent LIBOR request from Borrower shall
  be subject to a redetermination by Bank of the applicable fixed rate. If no
  specific designation of interest is made at the time any advance is requested
  hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to
  have made a LIBOR interest selection for such advance or the principal amount
  to which such Fixed Rate Term applied for a Fixed Rate Term of one month. 

      (c)    
  Taxes and Regulatory
  Costs. Borrower shall pay to Bank immediately upon demand
  (provided that such demand is made within 180 days of Bank becoming aware of
  any additional amounts referred to in the following clauses (i) and (ii) of
  this Section (c) and in any event not more than 180 days after all amounts otherwise
  payable hereunder have been paid in full), in addition to any other amounts
  due or to become due hereunder, any and all (i) withholdings, interest equalization
  taxes, stamp taxes or other taxes (except income and franchise taxes) imposed
  by any domestic or foreign governmental authority and related in any manner
  to LIBOR, and (ii) future, supplemental, emergency or other changes in the LIBOR
  Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance
  Corporation, or similar requirements or costs imposed by any domestic or foreign
  governmental authority or resulting from compliance by Bank with any request
  or directive (whether or not having the force of law) from any central bank
  or other governmental authority after the date hereof and related in any manner
  to LIBOR to the extent they are not included in the calculation of LIBOR. In
  determining which of the foregoing are attributable to any LIBOR option available
  to Borrower hereunder, any reasonable allocation made by Bank among its operations
  shall be conclusive and binding upon Borrower. 

      If Borrower is required
  to pay any amount to Bank pursuant to this Section (c), then Bank shall use
  reasonable efforts (consistent with legal and regulatory restrictions) to change
  the jurisdiction of its lending office respecting LIBOR advances so as to eliminate
  any such additional payment by Borrower which may thereafter accrue, if such
  change in the sole and absolute judgment of Bank (acting in good faith) is not
  otherwise disadvantageous to Bank. 

      If Borrower pays any additional
  amount under this Section (c) to Bank and Bank determines it is sole discretion
  acting in good faith that it has actually received or realized in connection
  therewith any refund or any reduction of, or credit against, its tax liabilities
  in or with respect to the taxable year in which the additional amount is paid
  (a “Tax Benefit”), Bank shall pay to Borrower such amount that Bank
  shall, in its sole discretion acting in good faith, determine is equal to the
  net benefit, after tax, which was obtained by Bank in such year as a consequence
  of such Tax Benefit; provided
  that (A) Bank may determine, acting in good faith, in its sole discretion consistent
  with the policies of Bank, whether to seek a Tax Benefit; and (B) nothing in
  this Section (c) shall require Bank to disclose any confidential information
  to Borrower (including, without limitation, its tax returns). 

     
  (d)     Payment
  of Interest. Interest accrued on this Note shall be
  payable monthly, in arrears, on the fifteenth day of each month, commencing
  May 15, 2003, and on the maturity date of this Note; provided that if
  any such interest due date is not a Business Day, then such payment shall be
  due on the next succeeding Business Day. 

      (e)    
  Default Interest.
  From and after the occurrence of an Event of Default and during the continuation
  thereof so long as the same shall remain unwaived, the outstanding principal
  balance of this Note shall bear interest until paid in full at an increased
  rate per annum 

 B-3-



  
 (computed on the basis of
  a 360-day year, actual days elapsed) equal to three percent (3.00%) above the
  rate of interest from time to time otherwise applicable to this Note. 

 BORROWINGS; REPAYMENTS; PREPAYMENTS;
  APPLICATION OF PAYMENTS: 

      (a)    
  Borrowing and
  Repayment. Borrower may not reborrow any amounts paid
  or prepaid hereunder. Each advance requested by Borrower hereunder shall be
  in a minimum principal amount equal to $100,000.00 or any integral multiple
  thereof. No advances may be obtained hereunder following the earlier to occur
  of (i) the date of the initial extension of credit under the Credit Agreement
  and (ii) May 15, 2003. The unpaid principal balance of this Note at any time
  shall be the total amounts advanced hereunder by the holder hereof less the
  amount of principal payments made hereon by or for Borrower, which balance may
  be endorsed hereon from time to time by the holder. The outstanding principal
  balance of this Note (together with all amounts outstanding hereunder or in
  respect hereof) shall be due and payable in full on April 15, 2005.

      (b)    
  Advances.
  Advances hereunder, to the total amount of the principal sum stated above, may
  be made by the holder at the oral or written request of (i) Dianne DaRosa-White
  or Tyler Painter, any one acting alone, who are authorized to request advances
  and direct the disposition of any advances until written notice of the revocation
  of such authority is received by the holder at the office designated above,
  or (ii) any Person, with respect to advances deposited to the credit of any
  deposit account of Borrower, which advances, when so deposited, shall be conclusively
  presumed to have been made to or for the benefit of Borrower regardless of the
  fact that persons other than those authorized to request advances may have authority
  to draw against such account. The holder shall have no obligation to determine
  whether any person requesting an advance is or has been authorized by Borrower.
  

      (c)    
  Prepayments.
  

             
  (i)     Prime
  Rate. Borrower may, on one (1) Business Day prior written
  notice to Bank, prepay principal on any portion of this Note that bears interest
  determined in relation to the Prime Rate at any time, in any amount and without
  penalty, together with accrued interest on the amount being prepaid. 

             
  (ii)     LIBOR.
  Borrower may, on three (3) Business Days prior written notice to Bank, prepay
  principal on any portion of this Note which bears interest determined in relation
  to LIBOR at any time and in the minimum amount of $100,000.00 or an integral
  multiple thereof, together with accrued interest on the amount being prepaid;
  provided that, if the outstanding principal balance of such portion of
  this Note is less than such amount, the minimum prepayment amount shall be the
  entire outstanding principal balance thereof; provided further
  that, in consideration of Bank providing Borrower with the ability to repay
  or prepay any portion of an advance that bears interest determined in relation
  to LIBOR on any day other than the last day of the Fixed Rate Term therefor
  (whether an optional prepayment, a mandatory prepayment, a payment upon acceleration
  or otherwise), Borrower shall pay to Bank promptly upon demand a fee which is
  the sum of the discounted monthly differences for each month from the month
  of prepayment through the month in which such Fixed Rate Term matures, calculated
  as follows for each such month: 


       
    (i)     Determine the amount of interest which would have
    accrued each month on the amount prepaid at the interest rate applicable to
    such amount had it remained outstanding until the last day of the Fixed Rate
    Term applicable thereto. 



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        (ii)     Subtract
    from the amount determined in (i) above the amount of interest which would
    have accrued for the same month on the amount prepaid for the remaining term
    of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new
    loans made for such term and in a principal amount equal to the amount prepaid.
    

        (iii)     If
    the result obtained in (ii) for any month is greater than zero, discount that
    difference by LIBOR used in (ii) above. 



 Borrower acknowledges that
  prepayment of such amount may result in Bank incurring additional costs, expenses
  and/or liabilities, and that it is difficult to ascertain the full extent of
  such costs, expenses and/or liabilities. Borrower, therefore, agrees to pay
  the above-described prepayment fee and agrees that such amount represents a
  reasonable estimate of the prepayment costs, expenses and/or liabilities of
  Bank. If Borrower fails to pay such amount when due, such amount shall thereafter
  bear interest until paid at a rate per annum three percent (3.00%) above the
  Prime Rate in effect from time to time (computed on the basis of a 360-day year,
  actual days elapsed). 

     
  (d)   Application
  of Payments. Each payment (including, without limitation,
  prepayments) made on this Note shall be credited first, to any fees, costs or
  expenses outstanding under the Loan Documents, second, to interest then due
  and third, to the outstanding principal balance hereof. All payments credited
  to principal shall be applied first, to the outstanding principal balance of
  this Note which bears interest determined in relation to the Prime Rate, if
  any, and second, to the outstanding principal balance of this Note which bears
  interest determined in relation to LIBOR, with such payments applied to the
  oldest Fixed Rate Term first. 

 EVENTS OF DEFAULT: 

      This Note is made pursuant
  to and is subject to the terms and conditions of the Credit Agreement. Any Event
  of Default (as that term is defined in the Credit Agreement) shall constitute
  an “Event of Default” hereunder. 

 GENERAL PROVISIONS: 

      (a)    
  Successors, Assignment. This Note shall be binding upon and inure to
  the benefit of the heirs, executors, administrators, legal representatives,
  successors and assigns of Borrower and the holder hereof; provided that
  Borrower may not assign or transfer its interest hereunder without the express
  prior written consent of the holder hereof.

      (b)    
  Entire Agreement;
  Amendment. This Note and the other Loan Documents constitute
  the entire agreement between Borrower and Bank with respect to each credit subject
  hereto and supersede all prior negotiations, communications, discussions and
  correspondence concerning the subject matter hereof. This Note may be amended
  or modified only in writing signed by Borrower and the holder hereof. 

      (c)    
  Arbitration.
  This Note is expressly subject to the terms and provisions contained in Section
  7.11 of the Credit Agreement regarding arbitration. 

      (d)    
  GOVERNING LAW.
  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
  LAWS OF THE STATE OF CALIFORNIA. 

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     The indebtedness
  evidenced hereby is Designated Senior Indebtedness as defined in and for all
  purposes set forth in that certain Indenture, dated as of December 10, 2001,
  by and between Borrower and Bankers Trust Company, as Trustee. 

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      IN WITNESS WHEREOF, the
  undersigned has executed this Note on the date first written above. 

 WIND RIVER SYSTEMS, INC.,

  a Delaware corporation 

	By:

      Name:     

      Title:	____EXHIBIT_____________________

      ________________________________

      ________________________________ 


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