“Reconciliation Period” shall mean each calendar month of every year. 2.  **Purchase and Sale of Receivables.** 2.1.**  Offer to Sell Receivables.**  During the term hereof, and provided that there does not then exist any Event of Default or any event that withnotice, lapse of time or otherwise would constitute an Event of Default, Seller may request that Buyer purchase receivables and Buyer may, in its sole discretion, elect to purchase receivables. Seller shall deliver to Buyer an Invoice Transmittalwith respect to any receivable for which a request for purchase is made. An authorized representative of Seller shall sign each Invoice Transmittal delivered to Buyer. Buyer shall be entitled to rely on all the information provided by Seller toBuyer on or with the Invoice Transmittal and to rely on the signature on any Invoice Transmittal as an authorized signature of Seller.  2.2.**  Acceptance of Receivables.**  Buyer shall have no obligation to purchase any receivable listed on an Invoice Transmittal. Buyer may exercise its sole discretion in approving the credit of eachAccount Debtor before buying any receivable. Upon acceptance by Buyer of all or any of the receivables described on any Invoice Transmittal, Buyer shall pay to Seller up to **80(%)** percent of the face amount of each receivable Buyerdesires to purchase, net of deferred revenue, offsets, and adjustments related to each specific Account Debtor, provided, Buyer shall only pay to Seller up to **65(%)** percent for the initial purchase. Such payment shall be the“Advance” with respect to such receivable. Buyer may, from time to time, in its sole discretion, change the percentage of the Advance. Upon Buyer’s acceptance of the receivable and payment to Seller of the Advance, the receivableshall become a “Purchased Receivable.” It shall be a condition to each Advance that (i) all of the representations and warranties set forth in Section 6 of this Agreement be true and correct on and as of the date of the related InvoiceTransmittal and on and as of the date of such Advance as though made at and as of each such date, and (ii) no Event of Default or any event or condition that with notice, lapse of time or otherwise would constitute an Event of Default shall haveoccurred and be continuing, or would result from such Advance. Notwithstanding the foregoing, in no event shall the aggregate amount of all Purchased Receivables outstanding at any time exceed **Five Million****Dollars**(**$5,000,000.00**), provided however, the aggregate amount of Advances under this Agreement shall not exceed **One Million Six Hundred Thousand Dollars****($1,600,000.00)** until one of the following occurs: (i) Seller registers all ofits unregistered copyrights, or (ii) a final decision in Buyer’s favor is ordered by the court on the matter of Aerocon Engineering v. Silicon Valley Bank; provided further, If the Aerocon case is appealed, the aggregate amount of Advancesunder this Agreement shall not exceed **One Million Dollars ($1,000,000.00)****.** 2.3.**  Effectiveness of Sale to Buyer.**  Effective upon Buyer’s payment of an Advance, and for and in consideration therefor and in consideration of the covenants of this Agreement, Seller herebyabsolutely sells, transfers and assigns to Buyer, all of Seller’s right, title and interest in and to each Purchased Receivable and all monies due or which may become due on or with respect to such Purchased Receivable. Buyer shall be theabsolute owner of each Purchased Receivable. Buyer shall have, with respect to any goods related to the Purchased Receivable, all the rights and remedies of an unpaid seller under the California Uniform Commercial Code and other applicable law,including the rights of replevin, claim and delivery, reclamation and stoppage in transit.  2.4.**  Establishment of a Reserve.**  Upon the purchase by Buyer of each Purchased Receivable, Buyer shall establish a reserve. The reserve shall be the amount by which the face amount of the PurchasedReceivable exceeds the Advance on that Purchased Receivable (the “Reserve”); provided, the Reserve with respect to all Purchased Receivables outstanding at any one time shall be an amount not less than **20(%)** percent of theAccount Balance at that time, and not less than **35(%)** percent with respect to the initial purchase, and such amount may be set at a higher percentage at Buyer’s sole discretion. The reserve shall be a book balance maintained onthe records of Buyer and shall not be a segregated fund.  3.  **Collections, Charges and Remittances.** 3.1.**  Collections.**  In computing Finance Charges on the Obligations, all checks and other items ofpayment received by Buyer (including proceeds of Purchased Receivables and payment of Obligations in full) shall be deemed applied by Buyer on account of the Obligations **one and one half business days** after receipt by Buyer of immediatelyavailable funds; provided, that if Seller is in default under this Agreement, Buyer shall apply all Collections to Seller’s Obligations hereunder in such order and manner as Buyer may determine. If an item of collection is not honored or Buyerdoes not receive good funds for any reason, the amount shall be included in the Account Balance as if the Collections had not been received and Finance Charges under Section 3.2 shall accrue thereon. Page 2 of 9 
3.2.**  Finance Charges.**  On each Reconciliation Date Seller shall pay to Buyer a finance chargein an amount equal to **5.0(%) percentage points above the Prime Rate** per annum of the gross average daily Account Balance outstanding during the applicable Reconciliation Period (the “Finance Charges”). Buyer shall deduct theaccrued Finance Charges from the Reserve as set forth in Section 3.5 below.  3.3.**  CollateralHandling Fee.**  On each Reconciliation Date Seller shall pay to Buyer a Collateral Handling Fee, equal to **.50 (%)** percent per month of the average daily Account Balance outstanding during the applicable ReconciliationPeriod (the “Collateral Handling Fee”). Buyer shall deduct the Collateral Handling Fee from the Reserve as set forth in Section 3.5 below.  3.4.**  Accounting.**  Buyer shall prepare and send to Seller after the close of business for each Reconciliation Period, an accounting of the transactions for thatReconciliation Period, including the amount of all Purchased Receivables, all Collections, Adjustments, Finance Charges, and the Collateral Handling Fee. The accounting shall be deemed correct and conclusive unless Seller makes written objection toBuyer within thirty (30) days after the Buyer mails the accounting to Seller.  3.5.**  Refund toSeller.**  Provided that there does not then exist an Event of Default or any event or condition that with notice, lapse of time or otherwise would constitute an Event of Default, Buyer shall refund to Seller by check after theReconciliation Date, the amount, if any, which Buyer owes to Seller at the end of the Reconciliation Period according to the accounting prepared by Buyer for that Reconciliation Period (the “Refund”). The Refund shall be an amount equalto:  (A)   (1)  The Reserve as of the beginning of that Reconciliation Period,**plus** (2)  the Reserve created for each Purchased Receivable purchased during thatReconciliation Period,  **         minus** (B)   The total for that Reconciliation Period of:  (1)  the Collateral Handling Fee;  (2)  Finance Charges;  (3)  Adjustments;  (4)  Repurchase Amounts, to the extent Buyer has agreed to accept payment thereof by deduction from the Refund;  (5)  the Reserve for the Account Balance as of the first day of the following Reconciliation Period in the minimumpercentage set forth in Section 2.4 hereof; and  (6)  all amounts due, including professional fees andexpenses, as set forth in Section 12 for which oral or written demand has been made by Buyer to Seller during that Reconciliation Period to the extent Buyer has agreed to accept payment thereof by deduction from the Refund.  In the event the formula set forth in this Section 3.5 results in an amount due to Buyer from Seller, Seller shall make such payment in the same manner as setforth in Section 4.3 hereof for repurchases. If the formula set forth in this Section 3.5 results in an amount due to Seller from Buyer, Buyer shall make such payment by check, subject to Buyer’s rights under Section 4.3 and Buyer’s rightsof offset and recoupment.  3.6.**  Due Diligence Fee.**  Seller shall pay to Buyer a duediligence fee of **$5,000.00**, which is non-refundable and due before execution of this Agreement.  3.7.**  Facility Fee.**  A fully earned, non-refundable facility fee of **$10,000.00** is due upon execution of this Agreement.  **4.  Recourse and Repurchase Obligations.** 4.1.**  Recourse.**  Buyer’s acquisition of Purchased Receivables from Seller shall be with full recourse against Seller. In the event the Obligations exceed the amount of Purchased Receivables andCollateral, Seller shall be liable for any deficiency.  4.2.**  Seller’s Agreement toRepurchase.**  Seller agrees to pay to Buyer on demand, the full face amount, or any unpaid portion, of any Purchased Receivable:  (A)  which remains unpaid ninety (90) calendar days after the invoice date; or  (B)  which is owed by any Account Debtor who has filed, or has had filed against it, any bankruptcy case, assignment for the benefit of creditors, receivership, or insolvency proceeding or who has become insolvent(as defined in the United States Bankruptcy Code) or who is generally not paying its debts as such debts become due; or Page 3 of 9 
(C)  with respect to which there has been any breach of warranty or representation set forth in Section 6hereof or any breach of any covenant contained in this Agreement; or  (D)  with respect to which theAccount Debtor asserts any discount, allowance, return, dispute, counterclaim, offset, defense, right of recoupment, right of return, warranty claim, or short payment;  together with all reasonable attorneys’ and professional fees and expenses and all court costs incurred by Buyer in collecting such Purchased Receivable and/or enforcing its rights under, orcollecting amounts owed by Seller in connection with, this Agreement (collectively, the “Repurchase Amount”).  4.3.**  Seller’s Payment of the Repurchase Amount or Other Amounts Due Buyer.**  When any Repurchase Amount or other amount owing to Buyer becomes due, Buyer shall inform Seller of the manner of paymentwhich may be any one or more of the following in Buyer’s sole discretion: (a) in cash immediately upon demand therefor; (b) by delivery of substitute invoices and an Invoice Transmittal acceptable to Buyer which shall thereupon become PurchasedReceivables; (c) by adjustment to the Reserve pursuant to Section 3.5 hereof; (d) by deduction from or offset against the Refund that would otherwise be due and payable to Seller; (e) by deduction from or offset against the amount that otherwisewould be forwarded to Seller in respect of any further Advances that may be made by Buyer; or (f) by any combination of the foregoing as Buyer may from time to time choose.  4.4.**  Seller’s Agreement to Repurchase All Purchased Receivables.**  Upon and after the occurrence of an Event of Default, Seller shall, uponBuyer’s demand (or, in the case of an Event of Default under Section 9(B), immediately without notice or demand from Buyer) repurchase all the Purchased Receivables then outstanding, or such portion thereof as Buyer may demand. Such demand may,at Buyer’s option, include and Seller shall pay to Buyer immediately upon demand, cash in an amount equal to the Advance with respect to each Purchased Receivable then outstanding together with all accrued Finance Charges, Adjustments,Collateral Handling Fees, attorney’s and professional fees, court costs and expenses as provided for herein, and any other Obligations. Upon receipt of payment in full of the Obligations, Buyer shall immediately instruct Account Debtors to paySeller directly, and return to Seller any Refund due to Seller. For the purpose of calculating any Refund due under this Section only, the Reconciliation Date shall be deemed to be the date Buyer receives payment in good funds of all the Obligationsas provided in this Section 4.4.  5.**    Power of Attorney.**  Seller does hereby irrevocably appointBuyer and its successors and assigns as Seller’s true and lawful attorney in fact, and hereby authorizes Buyer, regardless of whether there has been an Event of Default, (a) to sell, assign, transfer, pledge, compromise, or discharge the wholeor any part of the Purchased Receivables; (b) to demand, collect, receive, sue, and give releases to any Account Debtor for the monies due or which may become due upon or with respect to the Purchased Receivables and to compromise, prosecute, ordefend any action, claim, case or proceeding relating to the Purchased Receivables, including the filing of a claim or the voting of such claims in any bankruptcy case, all in Buyer’s name or Seller’s name, as Buyer may choose; (c) toprepare, file and sign Seller’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or similar document with respect to Purchased Receivables; (d) to notify all Account Debtors withrespect to the Purchased Receivables to pay Buyer directly; (e) to receive, open, and dispose of all mail addressed to Seller for the purpose of collecting the Purchased Receivables; (f) to endorse Seller’s name on any checks or other forms ofpayment on the Purchased Receivables; (g) to execute on behalf of Seller any and all instruments, documents, financing statements and the like to perfect Buyer’s interests in the Purchased Receivables and Collateral; and (h) to do all acts andthings necessary or expedient, in furtherance of any such purposes. If Buyer receives a check or item which is payment for both a Purchased Receivable and another receivable, the funds shall first be applied to the Purchased Receivable and, so longas there does not exist an Event of Default or an event that with notice, lapse of time or otherwise would constitute an Event of Default, the excess shall be remitted to Seller. Upon the occurrence and continuation of an Event of Default, all ofthe power of attorney rights granted by Seller to Buyer hereunder shall be applicable with respect to all Purchased Receivables and all Collateral.  6.**    Representations, Warranties and Covenants.** 6.1.**  Receivables’ Warranties, Representations and Covenants.**  To induce Buyer to buy receivables and to renders its services to Seller, and with full knowledge that the truth and accuracy of thefollowing are being relied upon by the Buyer in determining whether to accept receivables as Purchased Receivables, Seller represents, warrants, covenants and agrees, with respect to each Invoice Transmittal delivered to Buyer and each receivabledescribed therein, that:  (A)  Seller is the absolute owner of each receivable set forth in the InvoiceTransmittal and has full legal right to sell, transfer and assign such receivables; Page 4 of 9 
(B)  The correct amount of each receivable is as set forth in the Invoice Transmittal and is not in dispute; (C)  The payment of each receivable is not contingent upon the fulfillment of any obligation orcontract, past or future and any and all obligations required of the Seller have been fulfilled as of the date of the Invoice Transmittal;  (D)  Each receivable set forth on the Invoice Transmittal is based on an actual sale and delivery of goods and/or services actually rendered, is presently due and owing to Seller, is not past due or in default, hasnot been previously sold, assigned, transferred, or pledged, and is free of any and all liens, security interests and encumbrances other than liens, security interests or encumbrances in favor of Buyer or any other division or affiliate of SiliconValley Bank;  (E)  There are no defenses, offsets, or counterclaims against any of the receivables, andno agreement has been made under which the Account Debtor may claim any deduction or discount, except as otherwise stated in the Invoice Transmittal;  (F)  Each Purchased Receivable shall be the property of the Buyer and shall be collected by Buyer, but if for any reason it should be paid to Seller, Seller shall promptly notify Buyer ofsuch payment, shall hold any checks, drafts, or monies so received in trust for the benefit of Buyer, and shall promptly transfer and deliver the same to the Buyer;  (G)  Buyer shall have the right of endorsement, and also the right to require endorsement by Seller, on all payments received in connection with each PurchasedReceivable and any proceeds of Collateral;  (H)  Seller, and to Seller’s best knowledge, eachAccount Debtor set forth in the Invoice Transmittal, are and shall remain solvent as that term is defined in the United States Bankruptcy Code and the California Uniform Commercial Code, and no such Account Debtor has filed or had filed against it avoluntary or involuntary petition for relief under the United States Bankruptcy Code;  (I)  Each AccountDebtor named on the Invoice Transmittal will not object to the payment for, or the quality or the quantity of the subject matter of, the receivable and is liable for the amount set forth on the Invoice Transmittal;  (J)  Seller shall continue to notify and direct all of its Account Debtors to make all payments to a lockbox account establishedwith the Buyer (“Lockbox”) or to wire transfer payments to a cash collateral account that Buyer controls, and all Lockbox proceeds will be deposited into such cash collateral account; and  (K)  All receivables forwarded to and accepted by Buyer after the date hereof, and thereby becoming Purchased Receivables, shallcomply with each and every one of the foregoing representations, warranties, covenants and agreements referred to above in this Section 6.1.  6.2.**  Additional Warranties, Representations and Covenants.**  In addition to the foregoing warranties, representations and covenants, to induce Buyer to buy receivables and torender its services to Seller, Seller hereby represents, warrants, covenants and agrees that:  (A)  Seller will not assign, transfer, sell, or grant, or permit any lien or security interest in any Purchased Receivables or Collateral to or in favor of any other party, without Buyer’s prior written consent; (B)  The Seller’s name, form of organization, chief executive office, and the place where therecords concerning all Purchased Receivables and Collateral are kept is set forth at the beginning of this Agreement, Collateral is located only at the location set forth in the beginning of this Agreement, or, if located at any additional location,as set forth on a schedule attached to this Agreement, and Seller will give Buyer at least thirty (30) days prior written notice if such name, organization, chief executive office or other locations of Collateral or records concerning PurchasedReceivables or Collateral is changed or added and shall execute any documents necessary to perfect Buyer’s interest in the Purchased Receivables and the Collateral;  (C)  Seller shall (i) pay all of its normal gross payroll for employees, and all federal and state taxes, as and when due, including without limitation allpayroll and withholding taxes and state sales taxes; (ii) deliver at any time and from time to time at Buyer’s request, evidence satisfactory to Buyer that all such amounts have been paid to the proper taxing authorities; and (iii) if requestedby Buyer, pay its payroll and related taxes through a bank or an independent payroll service acceptable to Buyer.  (D)  Seller has not, as of the time Seller delivers to Buyer an Invoice Transmittal, or as of the time Seller accepts any Advance from Buyer, filed a voluntary petition for relief under the United States Bankruptcy Code orhad filed against it an involuntary petition for relief;  (E)  If Seller owns, holds or has any interestin, any copyrights (whether registered, or unregistered), patents or trademarks, and licenses of any of the foregoing, such interest has been disclosed to Buyer and is specifically listed and identified on a schedule to this Agreement, and Sellershall immediately notify Buyer if Seller hereafter obtains any interest in any additional copyrights, patents, trademarks or licenses that are significant in value or are material to the conduct of its business; Page 5 of 9 
 (F)  Seller shall provide Buyer with a Compliance Certificate on aquarterly basis to be received by Buyer no later than 30 days following the end of each calendar quarter, or on a more frequent or other basis if and as requested by Buyer,  (G)  Seller shall provide Buyer with, (i) as soon as available, but no later than 30 days following each Reconciliation Period, when Advances are outstanding, orprior to the purchase of any receivables when no Advances are outstanding, a deferred revenue report, an aged listing of accounts receivable and accounts payable (by due date), and consolidating financial statements in summary forms coveringSeller’s operations during the period; (ii) as soon as available, but no later than 30 days following the end of each calendar quarter, a company prepared consolidating balance sheet and income statement, prepared under GAAP, consistentlyapplied, covering Seller’s operations during the period; (iii) as soon as available, but no later than 120 days after the last day of Seller’s fiscal year, audited consolidated financial statements prepared under GAAP, consistentlyapplied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Buyer; (iv) a prompt report of any legal actions pending or threatened against Seller that couldresult in damages or costs to Seller; (v) budgets, sales projections, operating plans or other financial information Buyer reasonably requests; and (vi) prompt notice of any material change in the composition of the Intellectual Property, includingany subsequent ownership right of Seller in or to any Copyright, Patent or Trademark not shown in any intellectual property security agreement between Seller and Buyer or knowledge of an event that materially adversely affects the value of theIntellectual Property;  (H)  On request by Buyer, Seller will promptly furnish any information Buyer mayreasonably request to determine financial condition of Seller, including, but not limited to all of Seller’s Obligations, and the condition of any of Seller’s receivables which may include but are not limited to Purchased Receivables; (I)  Seller will maintain its primary operating deposit accounts with Buyer;  (J)  Seller will maintain a balance deposited at or invested through Buyer of at least 95% of its cash and cash equivalents,excluding cash proceeds of accounts receivable that are billed and collected by its subsidiaries located outside of the United States;  (K)  Seller agrees to execute a three party Account Control Agreement with Buyer and the financial institution where Seller maintains any significant domestic account(s);  (L)  As soon as available, but no later than 30 days following the end of each month, Seller shall provide Buyer with monthlybank and/or brokerage statements for eGain Communications Ltd. In the United Kingdom; and  (M)  Sellerwill not transfer any of its assets to any of its subsidiaries outside of the Unites States, provided however, Buyer hereby consents that Seller shall be permitted to transfer up to $400,000 per month in cash to its subsidiaries located outside ofthe United States  7.**  Adjustments.**  In the event of a breach of any of the representations, warranties, orcovenants set forth in Section 6.1, or in the event any Adjustment or dispute is asserted by any Account Debtor, Seller shall promptly advise Buyer and shall, subject to the Buyer’s approval, resolve such disputes and advise Buyer of anyadjustments. Unless the disputed Purchased Receivable is repurchased by Seller and the full Repurchase Amount is paid, Buyer shall remain the absolute owner of any Purchased Receivable which is subject to Adjustment or repurchase under Section 4.2hereof, and any rejected, returned, or recovered personal property, with the right to take possession thereof at any time. If such possession is not taken by Buyer, Seller is to resell it for Buyer’s account at Seller’s expense with theproceeds made payable to Buyer. While Seller retains possession of said returned goods, Seller shall segregate said goods and mark them “property of Silicon Valley Bank.”  8.**  Security Interest.**  To secure the prompt payment and performance to Buyer of all of the Obligations, Seller hereby grants to Buyer a continuing lien upon and securityinterest in all of Seller’s now existing or hereafter arising rights and interest in the following, whether now owned or existing or hereafter created, acquired, or arising, and wherever located (collectively, the “Collateral”):(A) All accounts, receivables, contract rights, chattel paper, instruments, documents, letters of credit, bankers acceptances, drafts, checks, cash,securities, and general intangibles (including, without limitation, all claims, causes of action, deposit accounts, guaranties, rights in and claims under insurance policies (including rights to premium refunds), rights to tax refunds, copyrights,patents, trademarks, rights in and under license agreements, and all other intellectual property);  (B) Allinventory, including Seller’s rights to any returned or rejected goods, with respect to which Buyer shall have all the rights of any unpaid seller, including the rights of replevin, claim and delivery, reclamation, and stoppage in transit; (C) All monies, refunds and other amounts due Seller, including, without limitation, amounts due Seller underthis Agreement (including Seller’s right of offset and recoupment);  (D) All equipment, machinery, furniture,furnishings, fixtures, tools, supplies and motor vehicles; Page 6 of 9 
 (E)  All farm products, crops, timber, minerals and the like (includingoil and gas);  (F)  All accessions to, substitutions for, and replacements of, all of the foregoing; (G)  All books and records pertaining to all of the foregoing; and  (H)  All proceeds of the foregoing, whether due to voluntary or involuntary disposition, including insurance proceeds. Seller is not authorized to sell, assign, transfer or otherwise convey any Collateral without Buyer’s priorwritten consent, except for the sale of finished inventory in the Seller’s usual course of business. Seller agrees to sign UCC financing statements, in a form acceptable to Buyer, and any other instruments and documents requested by Buyer toevidence, perfect, or protect the interests of Buyer in the Collateral. Seller agrees to deliver to Buyer the originals of all instruments, chattel paper and documents evidencing or related to Purchased Receivables and Collateral.  9.**  Default.**  The occurrence of any one or more of the following shall constitute an Event of Default hereunder. (A)  Seller fails to pay any amount owed to Buyer as and when due;  (B)  There shall be commenced by or against Seller any voluntary or involuntary case under the United States Bankruptcy Code, orany assignment for the benefit of creditors, or appointment of a receiver or custodian for any of its assets;  (C)  Seller shall become insolvent in that its debts are greater than the fair value of its assets, or Seller is generally not paying its debts as they become due or is left with unreasonably small capital;  (D)  Any involuntary lien, garnishment, attachment or the like is issued against or attaches to the PurchasedReceivables or any Collateral;  (E)  Seller shall breach any covenant, agreement, warranty, orrepresentation shall constitute an immediate default hereunder;  (F)  Seller is not in compliance with,or otherwise is in default under, any term of any document, instrument or agreement evidencing a debt, obligation or liability of any kind or character of Seller, now or hereafter existing, in favor of Buyer or any division or affiliate of SiliconValley Bank, regardless of whether such debt, obligation or liability is direct or indirect, primary or secondary, joint, several or joint and several, or fixed or contingent, together with any and all renewals and extensions of such debts,obligations and liabilities, or any part thereof;  (G)  An event of default shall occur under anyguaranty executed by any guarantor of the Obligations of Seller to Buyer under this Agreement, or any material provision of any such guaranty shall for any reason cease to be valid or enforceable or any such guaranty shall be repudiated orterminated, including by operation of law;  (H)  A default or event of default shall occur under anyagreement between Seller and any creditor of Seller that has entered into a subordination agreement with Buyer;  (I)  Any creditor that has entered into a subordination agreement with Buyer shall breach any of the terms of or not comply with such subordination agreement; or  (J)  (i) There is a material adverse change in the business, operations, or condition (financial or otherwise) of the Seller, or (ii) there is a materialimpairment of the prospect of repayment of any portion of the Obligations or (iii) there is a material impairment of the value or priority of Buyer’s security interests in the Collateral.  10.**  Remedies Upon Default.**  Upon the occurrence of an Event of Default, (1) without implying any obligation to buy receivables, Buyer may cease buying receivablesor extending any financial accommodations to Seller; (2) all or a portion of the Obligations shall be, at the option of and upon demand by Buyer, or with respect to an Event of Default described in Section 9(B), automatically and without notice ordemand, due and payable in full; and (3) Buyer shall have and may exercise all the rights and remedies under this Agreement and under applicable law, including the rights and remedies of a secured party under the California Uniform Commercial Code,all the power of attorney rights described in Section 5 with respect to all Collateral, and the right to collect, dispose of, sell, lease, use, and realize upon all Purchased Receivables and all Collateral in any commercial reasonable manner. Sellerand Buyer agree that any notice of sale required to be given to Seller shall be deemed to be reasonable if given five (5) days prior to the date on or after which the sale may be held. In the event that the Obligations are accelerated hereunder,Seller shall repurchase all of the Purchased Receivables as set forth in Section 4.4.  11.**  Accrual ofInterest.**  If any amount owed by Seller hereunder is not paid when due, including, without limitation, amounts due under Section 3.5, Repurchase Amounts, amounts due under Section 12, and any other Obligations, such amounts shall bearinterest at a per annum rate equal to the per annum rate of the Finance Charges until the earlier of (i) payment in good funds or (ii) entry of a final judgment thereof, at which time the principal amount of any money judgment remaining unsatisfiedshall accrue interest at the highest rate allowed by applicable law. Page 7 of 9 
 12.**  Fees, Costs and Expenses; Indemnification.**  The Seller will pay to Buyerimmediately upon demand all fees, costs and expenses (including fees of attorneys and professionals and their costs and expenses) that Buyer incurs or may from time to time impose in connection with any of the following: (a) preparing, negotiating,administering, and enforcing this Agreement or any other agreement executed in connection herewith, including any amendments, waivers or consents in connection with any of the foregoing, (b) any litigation or dispute (whether instituted by Buyer,Seller or any other person) in any way relating to the Purchased Receivables, the Collateral, this Agreement or any other agreement executed in connection herewith or therewith, (c) enforcing any rights against Seller or any guarantor, or anyAccount Debtor, (d) protecting or enforcing its interest in the Purchased Receivables or the Collateral, (e) collecting the Purchased Receivables and the Obligations, and (f) the representation of Buyer in connection with any bankruptcy case orinsolvency proceeding involving Seller, any Purchased Receivable, the Collateral, any Account Debtor, or any guarantor. Seller shall indemnify and hold Buyer harmless from and against any and all claims, actions, damages, costs, expenses, andliabilities of any nature whatsoever arising in connection with any of the foregoing.  13.**  Severability, Waiver, and Choiceof Law.**  In the event that any provision of this Agreement is deemed invalid by reason of law, this Agreement will be construed as not containing such provision and the remainder of the Agreement shall remain in full force and effect.Buyer retains all of its rights, even if it makes an Advance after an Event of Default. If Buyer waives an Event of Default, it may enforce a later Event of Default. Any consent or waiver under, or amendment of, this Agreement must be in writing.Nothing contained herein, or any action taken or not taken by Buyer at any time, shall be construed at any time to be indicative of any obligation or willingness on the part of Buyer to amend this Agreement or to grant to Seller any waivers orconsents. This Agreement has been transmitted by Seller to Buyer at Buyer’s office in the State of California and has been executed and accepted by Buyer in the State of California. This Agreement shall be governed by and interpreted inaccordance with the internal laws of the State of California.  14.**  Notices.**  All notices shall be given toBuyer and Seller at the addresses or faxes set forth on the first page of this Agreement and shall be deemed to have been delivered and received: (a) if mailed, three (3) calendar days after deposited in the United States mail, first class, postagepre-paid, (b) one (1) calendar day after deposit with an overnight mail or messenger service; or (c) on the same date of confirmed transmission if sent by hand delivery, telecopy, telefax or telex.  15.**  Jury Trial.**  SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OFOR IN CONNECTION WITH THIS AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT; AND (c)REPRESENT AND WARRANT THAT IT HAS REVIEWED THIS WAIVER, HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS LEGAL COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.  16.**  Term and Termination.**  The term of this Agreement shall be through **March 25, 2003**unless terminated in writing by Buyer orSeller. Seller and Buyer shall each have the right to terminate this Agreement at any time. Notwithstanding the foregoing, any termination of this Agreement shall not affect Buyer’s security interest in the Collateral and Buyer’s ownershipof the Purchased Receivables, and this Agreement shall continue to be effective, and Buyer’s rights and remedies hereunder shall survive such termination, until all transactions entered into and Obligations incurred hereunder or in connectionherewith have been completed and satisfied in full.  17.**  Titles and Section Headings.**  The titles and sectionheadings used herein are for convenience only and shall not be used in interpreting this Agreement.  18.**  OtherAgreements.**  The terms and provisions of this Agreement shall not adversely affect the rights of Buyer or any other division or affiliate of Silicon Valley Bank under any other document, instrument or agreement. The terms of such otherdocuments, instruments and agreements shall remain in full force and effect notwithstanding the execution of this Agreement. In the event of a conflict between any provision of this Agreement and any provision of any other document, instrument oragreement between Seller on the one hand, and Buyer or any other division or affiliate of Silicon Valley Bank on the other hand, Buyer shall determine in its sole discretion which provision shall apply. Seller acknowledges specifically that anysecurity agreements, liens and/or security interests currently securing payment of any obligations of Seller owing to Buyer or any other division or affiliate of Silicon Valley Bank also secure Seller’s obligations under this Agreement, and arevalid and subsisting and are not adversely affected by execution of this Agreement. Seller further acknowledges that (a) any collateral under other Page 8 of 9 
outstanding security agreements or other documents between Seller and Buyer or any other division or affiliate of Silicon Valley Bank securesthe obligations of Seller under this Agreement and (b) a default by Seller under this Agreement constitutes a default under other outstanding agreements between Seller and Buyer or any other division or affiliate of Silicon Valley Bank. IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the day and year above written. SELLER:**  EGAIN COMMUNICATIONS CORP.** By                                                              Title                                                            BUYER:**  SILICON VALLEY BANK** By                                                              Title                                                           EffectiveDate:                                          Page 9 of 9 
 **EXHIBIT “A”** **TO FINANCING STATEMENT AND SECURITY AGREEMENT** This FINANCINGSTATEMENT and SECURITY AGREEMENT covers the following types or items of property (in addition to, and without limiting the types of property set forth on page 1 hereof):  A) All accounts, receivables, contract rights, chattel paper, instruments, documents, letters of credit, bankers acceptances, drafts, checks, cash, securities,deposit accounts, and general intangibles (including, without limitation, all claims, causes of action, guaranties, rights in and claims under insurance policies (including rights to premium refunds), rights to tax refunds, copyrights, patents,trademarks, rights in and under license agreements, and all other intellectual property);  B) All inventory, including Seller’s rights to any returned or rejected goods, with respect to which Buyer shall have all the rights of any unpaid seller,including the rights of replevin, claim and delivery, reclamation, and stoppage in transit;  C) All monies, refunds and other amounts due Seller, including, without limitation, amounts due Seller under this Agreement (including Seller’s right ofoffset and recoupment);  D) All equipment, machinery, furniture, furnishings, fixtures, tools, supplies and motor vehicles;  E) All farm products, crops, timber, minerals and the like (including oil and gas);  F) All accessions to, substitutions for, and replacements of, all of the foregoing;  G) All books and records pertaining to all of the foregoing; and  H) All proceeds of the foregoing, whether due to voluntary or involuntary disposition, including insurance proceeds. 
 **INTELLECTUAL PROPERTY SECURITY AGREEMENT** This Intellectual Property Security Agreement (this “IP Agreement”) is made as of the Effective Date by and between EGAINCOMMUNICATIONS CORP. (“Grantor”), and Silicon Valley Bank, a California banking corporation (“Bank”).  **RECITALS** A.  Bank will make advances to Grantor (“Advances”) asdescribed in the Accounts Receivable Purchase Agreement (the “Purchase Agreement”), but only if Grantor grants Bank a security interest in its Copyrights, Trademarks, Patents, and Mask Works. Defined terms used but not defined herein shallhave the same meanings as in the Purchase Agreement.  B.  Pursuant to the terms of the PurchaseAgreement, Grantor has granted to Bank a security interest in all of Grantor’s right title and interest, whether presently existing or hereafter acquired in, to and under all of the Collateral.  **NOW, THEREFORE,**for good and valuable consideration, receipt of which is hereby acknowledged and intending to be legally bound, ascollateral security for the prompt and complete payment when due of Grantor’s Indebtedness under the Purchase Agreement, Grantor hereby represents, warrants, covenants and agrees as follows:  1.  Grant of Security Interest.  As collateral security for the prompt and complete payment and performance of all of Grantor’s presentor future Indebtedness, obligations and liabilities to Bank, Grantor hereby grants a security interest in all of Grantor’s right, title and interest in, to and under its Intellectual Property Collateral (all of which shall collectively becalled the “Intellectual Property Collateral”), including, without limitation, the following:  (a)  Any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the samealso constitutes a trade secret, now or hereafter existing, created, acquired or held, including without limitation those set forth on Exhibit A attached hereto (collectively, the “Copyrights”);  (b)  Any and all trade secrets, and any and all intellectual property rights in computer software and computer software productsnow or hereafter existing, created, acquired or held;  (c)  Any and all design rights which may beavailable to Grantor now or hereafter existing, created, acquired or held;  (d)  All patents, patentapplications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same, including without limitation the patents and patent applications set forthon Exhibit B attached hereto (collectively, the “Patents”);  (e)  Any trademark andservicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Grantor connected with and symbolized by such trademarks, including withoutlimitation those set forth on Exhibit C attached hereto (collectively, the “Trademarks”)  (f)  All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired, including, without limitation those set forth on Exhibit D attached hereto (collectively,the “Mask Works”); 1 
 (g)  Any and all claims for damages by way of past, present and futureinfringements of any of the rights included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified above;  (h)  All licenses or other rights to use any of the Copyrights, Patents, Trademarks, or Mask Works and all license fees androyalties arising from such use to the extent permitted by such license or rights; and  (i)  Allamendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works; and  (j)  All proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.  2.  Authorization and Request.  Grantor authorizes and requests that the Register of Copyrights and theCommissioner of Patents and Trademarks record this IP Agreement.  3.  Covenants andWarranties.  Grantor represents, warrants, covenants and agrees as follows:  (a)  Grantoris now the sole owner of the Intellectual Property Collateral, except for non-exclusive licenses granted by Grantor to its customers in the ordinary course of business.  (b)  Performance of this IP Agreement does not conflict with or result in a breach of any IP Agreement to which Grantor is bound, except to the extent thatcertain intellectual property agreements prohibit the assignment of the rights thereunder to a third party without the licensor’s or other party’s consent and this IP Agreement constitutes a security interest.  (c)  During the term of this IP Agreement, Grantor will not transfer or otherwise encumber any interest in the IntellectualProperty Collateral, except for non-exclusive licenses granted by Grantor in the ordinary course of business or as set forth in this IP Agreement;  (d)  To its knowledge, each of the Patents is valid and enforceable, and no part of the Intellectual Property Collateral has been judged invalid or unenforceable, in whole or in part, and noclaim has been made that any part of the Intellectual Property Collateral violates the rights of any third party;  (e)  Grantor shall promptly advise Bank of any material adverse change in the composition of the Collateral, including but not limited to any subsequent ownership right of the Grantor in or to any Trademark, Patent,Copyright, or Mask Work specified in this IP Agreement;  (f)  Grantor shall (i) protect, defend andmaintain the validity and enforceability of the Trademarks, Patents, Copyrights, and Mask Works, (ii) use its best efforts to detect infringements of the Trademarks, Patents, Copyrights, and Mask Works and promptly advise Bank in writing of materialinfringements detected and (iii) not allow any Trademarks, Patents, Copyrights, or Mask Works to be abandoned, forfeited or dedicated to the public without the written consent of Bank, which shall not be unreasonably withheld, unless Grantordetermines that reasonable business practices suggest that abandonment is appropriate.  (g)  Grantorshall promptly register the most recent version of any of Grantor’s Copyrights, if not so already registered, and shall, from time to time, execute and file such other instruments, and take such further actions as Bank may reasonably requestfrom time to time to perfect or continue the perfection of Bank’s interest in the Intellectual Property Collateral; The aggregate amount of Advances under the Purchase Agreement shall not exceed One Million Six Hundred Thousand Dollars($1,600,000.00) until one of the following occurs: (i) Grantor registers all of its unregistered copyrights, or (ii) a final decision in Bank’s favor is ordered by the court on the matter of Aerocon Engineering v. Silicon 2 
Valley Bank; provided however, If the Aerocon case is appealed, the aggregate amount of Advances under the Purchase Agreement shall not exceedOne Million Dollars ($1,000,000.00).  (h)  This IP Agreement creates, and in the case of after acquiredIntellectual Property Collateral, this IP Agreement will create at the time Grantor first has rights in such after acquired Intellectual Property Collateral, in favor of Bank a valid and perfected first priority security interest in the IntellectualProperty Collateral in the United States securing the payment and performance of the obligations evidenced by the Purchase Agreement upon making the filings referred to in clause (i) below;  (i)  To its knowledge, except for, and upon, the filing with the United States Patent and Trademark office with respect to the Patents and Trademarks and theRegister of Copyrights with respect to the Copyrights and Mask Works necessary to perfect the security interests created hereunder and except as has been already made or obtained, no authorization, approval or other action by, and no notice to orfiling with, any U.S. governmental authority of U.S. regulatory body is required either (i) for the grant by Grantor of the security interest granted hereby or for the execution, delivery or performance of this IP Agreement by Grantor in the U.S. or(ii) for the perfection in the United States or the exercise by Bank of its rights and remedies thereunder;  (j)  All information heretofore, herein or hereafter supplied to Bank by or on behalf of Grantor with respect to the Intellectual Property Collateral is accurate and complete in all material respects.  (k)  Grantor shall not enter into any agreement that would materially impair or conflict with Grantor’sobligations hereunder without Bank’s prior written consent, which consent shall not be unreasonably withheld. Grantor shall not permit the inclusion in any material contract to which it becomes a party of any provisions that could or might inany way prevent the creation of a security interest in Grantor’s rights and interest in any property included within the definition of the Intellectual property Collateral acquired under such contracts, except that certain contracts may containanti-assignment provisions that could in effect prohibit the creation of a security interest in such contracts.  (l)  Upon any executive officer of Grantor obtaining actual knowledge thereof, Grantor will promptly notify Bank in writing of any event that materially adversely affects the value of any material Intellectual PropertyCollateral, the ability of Grantor to dispose of any material Intellectual Property Collateral of the rights and remedies of Bank in relation thereto, including the levy of any legal process against any of the Intellectual Property Collateral. 4.  Bank’s Rights.  Bank shall have the right, but not the obligation, to take,at Grantor’s sole expense, any actions that Grantor is required under this IP Agreement to take but which Grantor fails to take, after fifteen (15) days’ notice to Grantor. Grantor shall reimburse and indemnify Bank for all reasonablecosts and reasonable expenses incurred in the reasonable exercise of its rights under this section 4.  5.  Inspection Rights.  Grantor hereby grants to Bank and its employees, representatives and agents the right to visit, during reasonable hours upon prior reasonable written notice to Grantor, and any ofGrantor’s plants and facilities that manufacture, install or store products (or that have done so during the prior six-month period) that are sold utilizing any of the Intellectual Property Collateral, and to inspect the products and qualitycontrol records relating thereto upon reasonable written notice to Grantor and as often as may be reasonably requested, but not more than one (1) in every six (6) months; provided, however, nothing herein shall entitle Bank access to Grantor’strade secrets and other proprietary information.  6.  Further Assurances; Attorney in Fact. (a)  On a continuing basis, Grantor will, subject to any prior licenses, encumbrances and restrictionsand prospective licenses, make, execute, acknowledge and deliver, and file and record in the proper filing and recording places in the United States, all such instruments, including appropriate financing and continuation statements and collateralagreements and filings with the United States Patent and Trademarks Office and the Register of Copyrights, and take all such action as may reasonably be 3 
deemed necessary or advisable, or as requested by Bank, to perfect Bank’s security interest in all Copyrights, Patents, Trademarks, andMask Works and otherwise to carry out the intent and purposes of this IP Agreement, or for assuring and confirming to Bank the grant or perfection of a security interest in all Intellectual Property Collateral.  (b)  Grantor hereby irrevocably appoints Bank as Grantor’s attorney-in-fact, with full authority in the place and stead ofGrantor and in the name of Grantor, Bank or otherwise, from time to time in Bank’s discretion, upon Grantor’s failure or inability to do so, to take any action and to execute any instrument which Bank may deem necessary or advisable toaccomplish the purposes of this IP Agreement, including:  (i)  To modify, in its sole discretion, thisIP Agreement without first obtaining Grantor’s approval of or signature to such modification by amending Exhibit A, Exhibit B, Exhibit C, and Exhibit D hereof, as appropriate, to include reference to any right, title or interest in anyCopyrights, Patents, Trademarks or Mask Works acquired by Grantor after the execution hereof or to delete any reference to any right, title or interest in any Copyrights, Patents, Trademarks, or Mask Works in which Grantor no longer has or claimsany right, title or interest; and  (ii)  To file, in its sole discretion, one or more financing orcontinuation statements and amendments thereto, relative to any of the Intellectual Property Collateral without the signature of Grantor where permitted by law.  7.  Events of Default.  The occurrence of any of the following shall constitute an Event of Default under this IP Agreement:  (a)  An Event of Default occurs under the Purchase Agreement; or  (b)  Grantor breaches any warranty or agreement made by Grantor in this IP Agreement.  8.  Remedies.  Upon the occurrence and continuance of an Event of Default, Bank shall have the right to exercise all the remedies of a securedparty under the California Uniform Commercial Code, including without limitation the right to require Grantor to assemble the Intellectual Property Collateral and any tangible property in which Bank has a security interest and to make it availableto Bank at a place designated by Bank. Bank shall have a nonexclusive, royalty free license to use the Copyrights, Patents, Trademarks, and Mask Works to the extent reasonably necessary to permit Bank to exercise its rights and remedies upon theoccurrence of an Event of Default. Grantor will pay any expenses (including reasonable attorney’s fees) incurred by Bank in connection with the exercise of any of Bank’s rights hereunder, including without limitation any expense incurredin disposing of the Intellectual Property Collateral. All of Bank’s rights and remedies with respect to the Intellectual Property Collateral shall be cumulative.  9.  Indemnity.  Grantor agrees to defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations,demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this IP Agreement, and (b) all losses or expenses in any way suffered, incurred, or paid by Bank as a result of or in any wayarising out of, following or consequential to transactions between Bank and Grantor, whether under this IP Agreement or otherwise (including without limitation, reasonable attorneys fees and reasonable expenses), except for losses arising from orout of Bank’s gross negligence or willful misconduct.  10.  Reassignment.  At suchtime as Grantor shall completely satisfy all of the obligations secured hereunder, Bank shall execute and deliver to Grantor all deed, assignments, and other instruments as may be necessary or proper to reinvest in Grantor full title to the propertyassigned hereunder, subject to any disposition thereof which may have been made by Bank pursuant hereto.  11.  Course of Dealing.  No course of dealing, nor any failure to exercise, nor any delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof. 4 
12.  Attorneys’ Fees.  If any action relating to this IP Agreement is brought by eitherparty hereto against the other party, the prevailing party shall be entitled to recover reasonable attorneys’ fees, costs and disbursements.  13.  Amendments.  This IP Agreement may be amended only by a written instrument signed by both parties hereto.  14.  Counterparts.  This IP Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of whichtogether shall constitute the same instrument.  15.  Law and Jurisdiction.  This IPAgreement shall be governed by and construed in accordance with the laws of the State of California, without regard for choice of law provisions. Grantor and Bank consent to the nonexclusive jurisdiction of any state or federal court located inSanta Clara County, California.  16.  Confidentiality.  In handling any confidentialinformation, Bank shall exercise the same degree of care that it exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to thisIP Agreement except that the disclosure of this information may be made (i) to the affiliates of the Bank, (ii) to prospective transferee or purchasers of an interest in the obligations secured hereby, provided that they have entered into comparableconfidentiality agreement in favor of Grantor and have deliver a copy to Grantor, (iii) as required by law, regulation, rule or order, subpoena judicial order or similar order and (iv) as may be required in connection with the examination, audit orsimilar investigation of Bank.  IN WITNESS WHEREOF, the parties hereto have executed this IP Agreement on the dayand year first above written.  **Address of Grantor:**   **GRANTOR:**714 East Evelyn AvenueSunnyvale, CA 94086   EGAIN COMMUNICATIONS CORP.    By:                                                                                                                            Name:                                                                                                                      Title:                                                                                                                    5 
 Exhibit “A” attached to that certain IntellectualProperty Security Agreement.  EXHIBIT “A”  COPYRIGHTS  SCHEDULE A -ISSUED COPYRIGHTS COPYRIGHTDESCRIPTION REGISTRATIONNUMBER DATE OFISSUANCE  SCHEDULE B - PENDING COPYRIGHT APPLICATIONS COPYRIGHT DESCRIPTION APPLICATION NUMBER DATE OFFILING DATE OFCREATION FIRST DATE OF PUBLIC DISTRIBUTION  SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending) COPYRIGHT DESCRIPTION DATE OFCREATION FIRST DATEOFDISTRIBUTION  ORIGINAL AUTHOR OR OWNER OF COPYRIGHT (IF DIFFERENT FROM GRANTOR)  DATE AND RECORDATION NUMBER OF IP AGREEMENT TO OWNER OF GRANTOR (IF ORIGINAL AUTHOR OR OWNER OF COPYRIGHT IS DIFFERENT FROM    GRANTOR)6 
 Exhibit “B” attached to that certain IntellectualProperty Security Agreement.  EXHIBIT “B”  PATENTS  PATENT DESCRIPTION DOCKET NO. COUNTRY  SERIAL NO.  FILING DATE  STATUS7 
 Exhibit “C” attached to that certain IntellectualProperty Security Agreement.  EXHIBIT “C”  TRADEMARKS  **TRADEMARK**        DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS8 
 Exhibit “D” attached to that certain IntellectualProperty Security Agreement.  EXHIBIT “D”  MASK WORKS  MASK WORK DESCRIPTION COUNTRY SERIAL NO.  REG. NO  STATUS9