**Exhibit 10.2**

 

**RADVIEW SOFTWARE, INC.**

**LOAN AND SECURITY AGREEMENT**

 

ThisLOAN AND SECURITY AGREEMENT is entered into as of May 25, 2005, by and betweenComerica Bank (“Bank”) and RADVIEW SOFTWARE, INC. (“Borrower”).

 

RECITALS

 

Borrowerwishes to obtain credit from time to time from Bank, and Bank desires to extendcredit to Borrower.  This Agreement setsforth the terms on which Bank will advance credit to Borrower, and Borrowerwill repay the amounts owing to Bank.

 

AGREEMENT

 

Theparties agree as follows:

 

# 1.             DEFINITIONSAND CONSTRUCTION.

#  

## 1.1   Definitions.  As used in this Agreement, all capitalizedterms shall have the definitions set forth on Exhibit A.  Any term used in the Code and not definedherein shall have the meaning given to the term in the Code.

##  

## 1.2   Accounting Terms.  Any accounting term not specifically definedon Exhibit A shall be construed in accordance with GAAP and all calculationsshall be made in accordance with GAAP. The term “financial statements” shall include the accompanying notes andschedules.

##  

# 2.             LOANAND TERMS OF PAYMENT.

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## 2.1   Credit Extensions.

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### (a)   Promise to Pay.  Borrower promises to pay to Bank, in lawfulmoney of the United States of America, the aggregate unpaid principal amount ofall Credit Extensions made by Bank to Borrower, together with interest on theunpaid principal amount of such Credit Extensions at rates in accordance withthe terms hereof.

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### (b)   Advances Under RevolvingLine.

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#### (i)            Amount.  Subject to and upon the terms and conditionsof this Agreement, (1) Borrower may request Advances in an aggregateoutstanding amount not to exceed the lesser of (A) the Revolving Line or(B) the Borrowing Base, and (2) amounts borrowed pursuant to thisSection 2.1(b) may be repaid and reborrowed at any time prior to theRevolving Maturity Date, at which time all Advances under this Section 2.1(b)shall be immediately due and payable. Borrower may prepay any Advances without penalty or premium.

####  

#### (ii)           Formof Request.  Whenever Borrowerdesires an Advance, Borrower will notify Bank by facsimile transmission ortelephone no later than 3:00 p.m. Pacific time (1:00 p.m. Pacific time for wiretransfers), on the Business Day that the Advance is to be made.  Each such notification shall be promptlyconfirmed by a Payment/Advance Form in substantially the form of Exhibit C.  Bank is authorized to make Advances underthis Agreement, based upon instructions received

 

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#### from a ResponsibleOfficer or a designee of a Responsible Officer, or without instructions if inBank’s discretion such Advances are necessary to meet Obligations which havebecome due and remain unpaid.  Bank shallbe entitled to rely on any telephonic notice given by a person who Bankreasonably believes to be a Responsible Officer or a designee thereof, andBorrower shall indemnify and hold Bank harmless for any damages or losssuffered by Bank as a result of such reliance. Bank will credit the amount of Advances made under thisSection 2.1(b) to Borrower’s deposit account.

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## 2.2   Overadvances.  If the aggregate amount of the outstandingAdvances exceeds the lesser of the Revolving Line or the Borrowing Base at anytime, Borrower shall immediately pay to Bank, in cash, the amount of suchexcess.

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## 2.3   Interest Rates, Payments,and Calculations.

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### (a)   Interest Rates.

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#### (i)            Advances.  Except as set forth in Section 2.3(b), theAdvances shall bear interest, on the outstanding daily balance thereof, at avariable rate equal to 1.25% above the Prime Rate.

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### (b)   Late Fee; Default Rate.  If any payment is not made within 10 daysafter the date such payment is due, Borrower shall pay Bank a late fee equal tothe lesser of (i) 5% of the amount of such unpaid amount or (ii) the maximumamount permitted to be charged under applicable law.  All Obligations shall bear interest, from andafter the occurrence and during the continuance of an Event of Default, at arate equal to 5 percentage points above the interest rate applicableimmediately prior to the occurrence of the Event of Default.

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### (c)   Payments.  Interest hereunder shall be due and payableon the first calendar day of each month during the term hereof.  Bank shall, at its option, charge suchinterest, all Bank Expenses, and all Periodic Payments against any of Borrower’sdeposit accounts or against the Revolving Line, in which case those amountsshall thereafter accrue interest at the rate then applicable hereunder.  Any interest not paid when due shall becompounded by becoming a part of the Obligations, and such interest shallthereafter accrue interest at the rate then applicable hereunder.  All payments shall be free and clear of anytaxes, withholdings, duties, impositions or other charges, to the end that Bankwill receive the entire amount of any Obligations payable hereunder, regardlessof source of payment.

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### (d)   Computation.  In the event the Prime Rate is changed fromtime to time hereafter, the applicable rate of interest hereunder shall beincreased or decreased, effective as of the day the Prime Rate is changed, byan amount equal to such change in the Prime Rate.  All interest chargeable under the LoanDocuments shall be computed on the basis of a 360 day year for the actualnumber of days elapsed.

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## 2.4   Crediting Payments.  Prior to the occurrence of an Event ofDefault, Bank shall credit a wire transfer of funds, check or other item ofpayment to such deposit account or Obligation as Borrower specifies, exceptthat to the extent Borrower uses the Advances to purchase Collateral, Borrower’srepayment of the Advances shall apply on a “first-in-first-out” basis so thatthe portion of the Advances used to purchase a particular item of Collateralshall be paid in the chronological order the Borrower purchased theCollateral.  After the occurrence of anEvent of Default, Bank shall have the right, in its sole discretion, toimmediately apply any wire transfer of funds, check, or other item of paymentBank may receive to conditionally reduce Obligations, but such applications offunds shall not be considered a payment on account unless such payment is ofimmediately available federal funds or unless and until such check or otheritem of payment is honored when presented for payment.

 

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## Notwithstandinganything to the contrary contained herein, any wire transfer or paymentreceived by Bank after 12:00 noon Pacific time shall be deemed to have beenreceived by Bank as of the opening of business on the immediately followingBusiness Day.  Whenever any payment toBank under the Loan Documents would otherwise be due (except by reason ofacceleration) on a date that is not a Business Day, such payment shall insteadbe due on the next Business Day, and additional fees or interest, as the casemay be, shall accrue and be payable for the period of such extension.

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## 2.5   Fees.  Borrower shall pay to Bank the following:

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### (a)   Facility Fee.  On the Closing Date, a fee equal to $12,500(including $5,000 of which Bank received before the Closing Date), which shallbe nonrefundable;

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### (b)   Bank Expenses.  On the Closing Date, all Bank Expensesincurred through the Closing Date, and, after the Closing Date, all BankExpenses, as and when they become due.

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## 2.6   Term.  This Agreement shall become effective on theClosing Date and, subject to Section 13.7, shall continue in full force andeffect for so long as any Obligations remain outstanding or Bank has any obligationto make Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to terminateits obligation to make Credit Extensions under this Agreement immediately andwithout notice upon the occurrence and during the continuance of an Event ofDefault.

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## 2.7   Lockbox.  As of the date which is 90 days after theClosing Date, Borrower shall open and shall thereafter maintain a lockbox atBank (the “Lockbox”).  Once opened,Borrower shall at all times thereafter, unless otherwise directed by Bank inwriting, cause all remittances made by any account debtor for any Accounts tobe made to the Lockbox.  Unless otherwisedirected by Bank in writing, all invoices and other instructions submitted byBorrower to an account debtor relating to Account payments shall designate theLockbox as the place to which such payments shall be made.

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# 3.             CONDITIONSOF LOANS.

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## 3.1   Conditions Precedent toInitial Credit Extension.  Theobligation of Bank to make the initial Credit Extension is subject to thecondition precedent that Bank shall have received, in form and substancesatisfactory to Bank, the following:

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### (a)   this Agreement;

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### (b)   an officer’s certificate ofBorrower with respect to incumbency and resolutions authorizing the executionand delivery of this Agreement;

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### (c)   a financing statement;

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### (d)   an intellectual propertysecurity agreement;

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### (e)   Unconditional Guaranties andincumbency certificates, with resolutions to guarantee, and in the case ofParent, grant a security interest in collateral, from Parent, RadView Software(UK) Ltd., and RadView Software GmbH;

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### (f)    a third party securityagreement, intellectual property security agreement, share pledge agreement andstock powers (with respect to shares of stock of Borrower), and subordinationagreement from Parent;

 

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### (g)   evidence of termination of Parent’s debenture in favor of BankHapoalim, evidence of cancellation and termination of any registered pledgeagainst Parent in favor of Bank Hapoalim, and requisite consents from the Investment Center of the Israeli Ministry ofIndustry and Trade;

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### (h)   Share certificates evidencing100% of outstanding stock of Borrower;

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### (i)    agreement to provideinsurance;

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### (j)    payment of the fees and BankExpenses then due specified in Section 2.5;

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### (k)   current SOS Reports indicatingthat except for Permitted Liens, there are no other security interests or Liensof record in the Collateral;

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### (l)    an audit of the Collateral,the results of which shall be satisfactory to Bank;

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### (m)  current financial statements, includingaudited statements for Parent’s most recently ended fiscal year, together withan unqualified opinion, company prepared consolidated and consolidating balancesheets and income statements for the most recently ended month in accordancewith Section 6.2, and such other updated financial information as Bank mayreasonably request;

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### (n)   current Compliance Certificatein accordance with Section 6.2;

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### (o)   a Warrant to purchase Parent’sordinary shares in form and substance satisfactory to Bank; and

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### (p)   such other documents orcertificates, and completion of such other matters, as Bank may reasonably deemnecessary or appropriate.

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## 3.2   Conditions Precedent to allCredit Extensions.  The obligation ofBank to make each Credit Extension, including the initial Credit Extension, isfurther subject to the following conditions:

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### (a)   timely receipt by Bank of thePayment/Advance Form as provided in Section 2.1; and

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### (b)   the representations andwarranties contained in Section 5 shall be true and correct in all materialrespects on and as of the date of such Payment/Advance Form and on theeffective date of each Credit Extension as though made at and as of each suchdate, and no Event of Default shall have occurred and be continuing, or wouldexist after giving effect to such Credit Extension (provided, however, thatthose representations and warranties expressly referring to another date shallbe true, correct and complete in all material respects as of such date).  The making of each Credit Extension shall bedeemed to be a representation and warranty by Borrower on the date of suchCredit Extension as to the accuracy of the facts referred to in this Section3.2.

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# 4.             CREATIONOF SECURITY INTEREST.

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## 4.1   Grant of Security Interest.  Borrower grants and pledges to Bank acontinuing security interest in the Collateral to secure prompt repayment ofany and all Obligations and to secure prompt performance by Borrower of each ofits covenants and duties under the Loan Documents.  Except as set forth in the Schedule, such securityinterest constitutes a valid, first priority security interest in the presentlyexisting Collateral, and will constitute a valid, first priority securityinterest in later-acquired

 

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## Collateral.  Notwithstanding any termination, Bank’s Lienon the Collateral shall remain in effect for so long as any Obligations areoutstanding.

##  

## 4.2   Perfection of SecurityInterest.  Borrower authorizes Bankto file at any time financing statements, continuation statements, andamendments thereto that (i) either specifically describe the Collateral ordescribe the Collateral as all assets of Borrower of the kind pledgedhereunder, and (ii) contain any other information required by the Code for thesufficiency of filing office acceptance of any financing statement, continuationstatement, or amendment, including whether Borrower is an organization, thetype of organization and any organizational identification number issued toBorrower, if applicable.  Any suchfinancing statements may be signed by Bank on behalf of Borrower, as providedin the Code, and may be filed at any time in any jurisdiction whether or notRevised Article 9 of the Code is then in effect in that jurisdiction.  Borrower shall from time to time endorse anddeliver to Bank, at the request of Bank, all Negotiable Collateral and otherdocuments that Bank may reasonably request, in form satisfactory to Bank, toperfect and continue perfected Bank’s security interests in the Collateral andin order to fully consummate all of the transactions contemplated under theLoan Documents.  Borrower shall havepossession of the Collateral, except where expressly otherwise provided in thisAgreement or where Bank chooses to perfect its security interest by possessionin addition to the filing of a financing statement.  Where Collateral is in possession of a thirdparty bailee, Borrower shall take such steps as Bank reasonably requests forBank to (i) obtain an acknowledgment, in form and substance satisfactory toBank, of the bailee that the bailee holds such Collateral for the benefit ofBank, (ii) obtain “control” of any Collateral consisting of investmentproperty, deposit accounts, letter-of-credit rights or electronic chattel paper(as such items and the term “control” are defined in Revised Article 9 of theCode) by causing the securities intermediary or depositary institution orissuing bank to execute a control agreement in form and substance satisfactoryto Bank.  Borrower will not create anychattel paper without placing a legend on the chattel paper acceptable to Bankindicating that Bank has a security interest in the chattel paper.  Borrower from time to time may deposit withBank specific cash collateral to secure specific Obligations; Borrowerauthorizes Bank to hold such specific balances in pledge and to decline tohonor any drafts thereon or any request by Borrower or any other Person to payor otherwise transfer any part of such balances for so long as the specificObligations are outstanding.

##  

## 4.3   Right to Inspect.  Bank (through any of its officers, employees,or agents) shall have the right, upon reasonable prior notice, from time totime during Borrower’s usual business hours but no more than twice a year(unless an Event of Default has occurred and is continuing), to inspectBorrower’s Books and to make copies thereof and to check, test, and appraisethe Collateral in order to verify Borrower’s financial condition or the amount,condition of, or any other matter relating to, the Collateral.

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# 5.             REPRESENTATIONSAND WARRANTIES.

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## Borrowerrepresents and warrants as follows:

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## 5.1   Due Organization andQualification.  Borrower and eachSubsidiary is a corporation duly existing under the laws of the state in whichit is incorporated and qualified and licensed to do business in any state inwhich the conduct of its business or its ownership of property requires that itbe so qualified, except where the failure to do so would not reasonably beexpected to cause a Material Adverse Effect.

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## 5.2   Due Authorization; NoConflict.  The execution, delivery,and performance of the Loan Documents are within Borrower’s powers, have beenduly authorized, and are not in conflict with nor constitute a breach of anyprovision contained in Borrower’s Articles of Incorporation or Bylaws, nor willthey constitute an event of default under any material agreement by whichBorrower is bound.

 

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## Borrower is not indefault under any agreement by which it is bound, except to the extent suchdefault would not reasonably be expected to cause a Material Adverse Effect.

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## 5.3   Collateral.  Borrower has rights in or the power totransfer the Collateral, and its title to the Collateral is free and clear ofLiens, adverse claims, and restrictions on transfer or pledge except forPermitted Liens.  All Collateral islocated solely in the Collateral States. The Eligible Accounts are bona fide existing obligations.  Other than maintenance related contracts thatare billed in advance, the property or services giving rise to such EligibleAccounts has been delivered or rendered to the account debtor or its agent forimmediate shipment to and unconditional acceptance by the account debtor.  Borrower has not received notice of actual orimminent Insolvency Proceeding of any account debtor whose accounts are includedin any Borrowing Base Certificate as an Eligible Account.  All Inventory is in all material respects ofgood and merchantable quality, free from all material defects, except forInventory for which adequate reserves have been made.  Except as set forth in the Schedule, none ofthe Collateral is maintained or invested with a Person other than Bank or Bank’sAffiliates.

##  

## 5.4   Intellectual PropertyCollateral.  Borrower is the soleowner of the Intellectual Property Collateral, except for licenses granted byBorrower to its customers in the ordinary course of business.  To the best of Borrower’s knowledge, each ofthe Copyrights, Trademarks and Patents is valid and enforceable, and no part ofthe Intellectual Property Collateral has been judged invalid or unenforceable,in whole or in part, and no claim has been made to Borrower that any part ofthe Intellectual Property Collateral violates the rights of any third partyexcept to the extent such claim would not reasonably be expected to cause aMaterial Adverse Effect.  Except as setforth in the Schedule, Borrower’s rights as a licensee of intellectual propertydo not give rise to more than 5% of its gross revenue in any given month,including without limitation revenue derived from the sale, licensing,rendering or disposition of any product or service.

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## 5.5   Name; Location of ChiefExecutive Office.  Except asdisclosed in the Schedule, Borrower has not done business under any name otherthan that specified on the signature page hereof, and its exact legal name isas set forth in the first paragraph of this Agreement.  The chief executive office of Borrower islocated in the Chief Executive Office State at the address indicated in Section10 hereof.

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## 5.6   Litigation.  Except as set forth in the Schedule, thereare no actions or proceedings pending by or against Borrower or any Subsidiarybefore any court or administrative agency in which an adverse decision wouldreasonably be expected to have a Material Adverse Effect.

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## 5.7   No Material Adverse Changein Financial Statements.  Allconsolidated and consolidating financial statements related to any of theBorrower Parties that are delivered by or on behalf of any Borrower Party toBank fairly present in all material respects Borrower’s and Parent’sconsolidated and consolidating financial condition as of the date thereof andBorrower’s and Parent’s consolidated and consolidating results of operationsfor the period then ended.  There has notbeen a material adverse change in the consolidated or in the consolidatingfinancial condition of Borrower since the date of the most recent of suchfinancial statements submitted to Bank.

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## 5.8   Solvency, Payment of Debts.  Borrower is able to pay its debts (includingtrade debts) as they mature; the fair saleable value of Borrower’s assets(including goodwill minus disposition costs) exceeds the fair value of itsliabilities (excluding intercompany liabilities to Parent); and Borrower is notleft with unreasonably small capital after the transactions contemplated bythis Agreement.

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## 5.9   Compliance with Laws andRegulations.  Borrower and eachSubsidiary have met the minimum funding requirements of ERISA with respect toany employee benefit plans subject to ERISA. No event has occurred resulting from Borrower’s failure to comply withERISA that is reasonably likely

 

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## to result inBorrower’s incurring any liability that could have a Material AdverseEffect.  Borrower is not an “investmentcompany” or a company “controlled” by an “investment company” within themeaning of the Investment Company Act of 1940. Borrower is not engaged principally, or as one of the importantactivities, in the business of extending credit for the purpose of purchasingor carrying margin stock (within the meaning of Regulations T and U of theBoard of Governors of the Federal Reserve System).  Borrower has complied in all materialrespects with all the provisions of the Federal Fair Labor Standards Act.  Borrower is in compliance with allenvironmental laws, regulations and ordinances except where the failure tocomply is not reasonably likely to have a Material Adverse Effect.  Borrower has not violated any statutes, laws,ordinances or rules applicable to it, the violation of which would reasonablybe expected to have a Material Adverse Effect. Borrower and each Subsidiary have filed or caused to be filed all taxreturns required to be filed, and have paid, or have made adequate provisionfor the payment of, all taxes reflected therein except those being contested ingood faith with adequate reserves under GAAP or where the failure to file such returnsor pay such taxes would not reasonably be expected to have a Material AdverseEffect.

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## 5.10Subsidiaries.  Borrower does not own any stock, partnershipinterest or other equity securities of any Person, except for PermittedInvestments.

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## 5.11Government Consents.  Borrower and each Subsidiary have obtainedall consents, approvals and authorizations of, made all declarations or filingswith, and given all notices to, all governmental authorities that are necessaryfor the continued operation of Borrower’s business as currently conducted,except where the failure to do so would not reasonably be expected to cause aMaterial Adverse Effect.

##  

## 5.12Inbound Licenses.  Except as disclosed on the Schedule, or afterthe date of this Agreement, as disclosed in writing to Bank, Borrower is not aparty to, nor is bound by: (a) any agreement that prohibits or otherwiserestricts Borrower from granting a security interest in Borrower’s interest anyof its property; or (b) any Material License.

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## 5.13Full Disclosure.  No representation, warranty or otherstatement made by Borrower in any certificate or written statement furnished toBank taken together with all such certificates and written statements furnishedto Bank contains any untrue statement of a material fact or omits to state amaterial fact necessary in order to make the statements contained in suchcertificates or statements not misleading, it being recognized by Bank that theprojections and forecasts provided by Borrower in good faith and based upon reasonableassumptions are not to be viewed as facts and that actual results during theperiod or periods covered by any such projections and forecasts may materiallydiffer from the projected or forecasted results.

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# 6.             AFFIRMATIVECOVENANTS.

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## Borrower covenantsthat, until payment in full of all outstanding Obligations, and for so long asBank may have any commitment to make a Credit Extension hereunder, Borrowershall do all of the following:

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## 6.1   Good Standing and GovernmentCompliance.  Borrower shall maintainits and each of its Subsidiaries’ corporate existence and good standing in theBorrower State, shall maintain qualification and good standing in each otherjurisdiction in which the failure to so qualify would reasonably be expected tohave a Material Adverse Effect, and shall furnish to Bank the organizationalidentification number issued to Borrower by the authorities of the state inwhich Borrower is organized, if applicable. Borrower shall meet, and shall cause each Subsidiary to meet, theminimum funding requirements of ERISA with respect to any employee benefitplans subject to ERISA.  Borrower shall

 

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## comply in allmaterial respects with all applicable Environmental Laws, and maintain allmaterial permits, licenses and approvals required thereunder where the failureto do so would reasonably be expected to have a Material Adverse Effect.  Borrower shall comply, and shall cause eachSubsidiary to comply, with all statutes, laws, ordinances and government rulesand regulations to which it is subject, and shall maintain, and shall causeeach of its Subsidiaries to maintain, in force all licenses, approvals andagreements, the loss of which or failure to comply with which would reasonablybe expected to have a Material Adverse Effect.

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## 6.2   Financial Statements,Reports, Certificates.  Borrowershall deliver to Bank at both the El Segundo and the Boston offices referencedin Section 10:  (i) as soon as available,but in any event within 45 days after the end of each quarter, Parent’s reporton Form 10-Q filed with the Securities and Exchange Commission, and within 30days after the end of each quarter a company prepared consolidated andconsolidating balance sheet and income statement covering Borrower’s and Parent’soperations during such period, in a form reasonably acceptable to Bank andcertified by a Responsible Officer; (ii) as soon as available, but in any eventwithin 120 days after the end of Parent’s fiscal year, a report on Form 10-Kfiled with the Securities and Exchange Commission, including auditedconsolidated financial statements of Parent prepared in accordance with GAAP,consistently applied, together with an opinion which is unqualified orotherwise consented to in writing by Bank on such financial statements of anindependent certified public accounting firm reasonably acceptable to Bank;(iii) copies of all statements, reports and notices sent or made availablegenerally by Borrower or Parent to its security holders or to any holders ofSubordinated Debt; (iv) promptly upon receipt of notice thereof, a report ofany legal actions pending or threatened against any Borrower Party that couldresult in damages or costs to such Person of $250,000 or more; (v) promptlyupon receipt, each management letter prepared by Parent’s independent certifiedpublic accounting firm regarding Borrower’s or Parent’s management controlsystems; (vi) as soon as available, but in any event by December 31 of eachyear, an annual budget and forecast for the following year; (vii) such budgets,sales projections, operating plans or other financial information generallyprepared by Borrower in the ordinary course of business as Bank may reasonablyrequest from time to time; and (viii) within 30 days of the last day of eachfiscal quarter, a report signed by Borrower, in form reasonably acceptable toBank, listing any applications or registrations that Borrower or any otherBorrower Party has made or filed in respect of any Patents, Copyrights orTrademarks and the status of any outstanding applications or registrations, aswell as any material change in Borrower’s Intellectual Property Collateral,including but not limited to any subsequent ownership right of Borrower in orto any Trademark, Patent or Copyright not specified in Exhibits A, B,and C of any Intellectual Property Security Agreement delivered to Bankby Borrower in connection with this Agreement.

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### (a)   Within 30 days after the lastday of each month, Borrower shall deliver to Bank at both the El Segundo andthe Boston offices referenced in Section 10, (i) a Borrowing Base Certificatesigned by a Responsible Officer in substantially the form of Exhibit Dhereto, together with aged listings by invoice date of accounts receivable andaccounts payable and (ii) a Compliance Certificate certified as of the last dayof the applicable month and signed by a Responsible Officer in substantiallythe form of Exhibit E hereto.

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### (b)   As soon as possible and in anyevent within 3 Business Days after becoming aware of the occurrence orexistence of an Event of Default hereunder, a written statement of aResponsible Officer setting forth details of the Event of Default, and theaction which Borrower has taken or proposes to take to remedy such Event ofDefault.

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### (c)   Bank shall have a right fromtime to time hereafter to audit Borrower’s Accounts and appraise Collateral atBorrower’s reasonable expense, provided that such audits will be conducted nomore often than every 6 months unless an Event of Default has occurred and iscontinuing.

 

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Borrower or Parentmay deliver to Bank on an electronic basis any certificates, reports orinformation required pursuant to this Section 6.2, and Bank shall be entitledto rely on the information contained in the electronic files, provided thatBank in good faith believes that the files were delivered by a ResponsibleOfficer.  If Borrower or Parent deliversthis information electronically, it shall also deliver to Bank by U.S. Mail,reputable overnight courier service, hand delivery, facsimile or .pdf filewithin 5 Business Days of submission of the unsigned electronic copy thecertification of monthly financial statements, the intellectual propertyreport, the Borrowing Base Certificate and the Compliance Certificate, eachbearing the physical signature of the Responsible Officer.

 

## 6.3   Inventory; Returns.  Borrower shall keep all Inventory in good andmerchantable condition, free from all material defects except for Inventory forwhich adequate reserves have been made. Returns and allowances, if any, as between Borrower and its accountdebtors shall be on the same basis and in accordance with the usual customarypractices of Borrower, as they exist on the Closing Date.  Borrower shall promptly notify Bank of allreturns and recoveries and of all disputes and claims involving more than$100,000.

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## 6.4   Taxes.  Borrower shall make, and cause eachSubsidiary to make, due and timely payment or deposit of all material federal,state, and local taxes, assessments, or contributions required of it by law,including, but not limited to, those laws concerning income taxes, F.I.C.A.,F.U.T.A. and state disability, and will execute and deliver to Bank, on demand,proof satisfactory to Bank indicating that Borrower or a Subsidiary has madesuch payments or deposits and any appropriate certificates attesting to thepayment or deposit thereof; provided that Borrower or a Subsidiary need notmake any payment if the amount or validity of such payment is contested in goodfaith by appropriate proceedings and is reserved against (to the extentrequired by GAAP) by Borrower.

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## 6.5   Insurance.

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### (a)   Borrower, at its expense, shallkeep the Collateral insured, or shall cause Parent to keep the Collateralinsured under a global policy for all Borrower Parties, against loss or damageby fire, theft, explosion, sprinklers, and all other hazards and risks, and insuch amounts, as ordinarily insured against by other owners in similarbusinesses conducted in the locations where Borrower’s business is conducted onthe date hereof.  Borrower shall alsomaintain, or shall cause Parent to maintain, liability and other insurance inamounts and of a type that are customary to businesses similar to Borrower’s.

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### (b)   All such policies of insuranceshall be in such form, with such companies, and in such amounts as reasonablysatisfactory to Bank.  All policies ofproperty insurance shall contain a lender’s loss payable endorsement, in a formsatisfactory to Bank, showing Bank as an additional loss payee, and allliability insurance policies shall show Bank as an additional insured andspecify that the insurer must give at least 20 days notice to Bank beforecanceling its policy for any reason. Upon Bank’s request, Borrower shall deliver to Bank certified copies ofthe policies of insurance and evidence of all premium payments.  If no Event of Default has occurred and iscontinuing, proceeds payable under any casualty policy will, at Borrower’soption, be payable to Borrower to replace the property subject to the claim,provided that any such replacement property shall be deemed Collateral in whichBank has been granted a first priority security interest.  If an Event of Default has occurred and iscontinuing, all proceeds payable under any such policy shall, at Bank’s option,be payable to Bank to be applied on account of the Obligations.

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## 6.6   Primary Depository.  Borrower shall maintain all its depository,operating, and investment accounts with Bank or Bank’s Affiliates, providedthat Borrower may maintain up to: (a)

 

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## $250,000 in theaggregate at Bank of America for up to 90 days after the Closing Date; and (b)$136,000 in the aggregate held at JP Morgan Bank until August 15, 2005.

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## 6.7   Financial Covenants.  Borrower shall at all times maintain thefollowing financial ratios and covenants:

##  

### (a)   Minimum Cash.  A balance of Cash of Borrower: (a) on theClosing Date, prior to the initial Credit Extension, of Three Hundred ThousandDollars ($300,000), and (b) at all times from and after the Closing Date, ofnot less than One Million Two Hundred Thousand Dollars ($1,200,000) (the“Required Balance”) in money market account #1892864073 at Bank; provided,however, upon delivery by Parent to Bank of executed account control andsubordination agreements in favor of Bank, in form and content satisfactory toBank in its sole discretion, with respect to Parent’s deposit and investmentaccounts, the Required Balance shall be reduced to One Million Dollars($1,000,000).  Such money market accountand all amounts held therein, together with all proceeds thereof, interest paidthereon, and substitutions therefor, and all accounts, securities, instruments,securities entitlements and financial assets arising out of any of theforegoing, are the “Cash Collateral”. Borrower grants and pledges to Bank a continuing security interest inall presently existing and hereafter acquired or arising Cash Collateral, inorder to secure prompt repayment of any and all Obligations.  Bank shall retain control over the CashCollateral up to the Required Balance to secure the Obligations until theObligations have been satisfied in full. Borrower hereby authorizes Bank to place restrictions on Borrower’sability to withdraw amounts from accounts holding the Cash Collateral in orderto ensure that such Required Balance is maintained.  Borrower authorizes Bank to execute and/orfile such documents, and take such actions, as Bank determines reasonable toperfect its security interest in the Cash Collateral.  Such security interest constitutes a valid,first priority security interest in the Cash Collateral, and will constitute avalid, first priority security interest in Cash Collateral acquired after thedate hereof.  Notwithstanding terminationof this Agreement, Bank’s Lien on the Cash Collateral shall remain in effectfor so long as any Obligations are outstanding.

###  

### (b)   Net Loss.  Net Loss (as defined below) shall not begreater than (i) ($996,000) for the quarter ended March 31, 2005, (ii)($642,000) for the quarter ending June 30, 2005, (iii) ($787,000) for thequarter ending September 30, 2005, and (iv) ($299,000) for the quarter endingDecember 31, 2005.  This covenant will bereset by Bank for periods thereafter based on updated projections approved byBorrower’s and Parent’s Board of Directors for the next fiscal year, whichshall be acceptable to Bank and delivered to Bank by December 31 of eachyear.  As used herein, “Net Loss” meansnet loss of Parent measured on a consolidated basis in accordance with GAAP.

###  

## 6.8   Registration of IntellectualProperty Rights.

##  

### (a)   Borrower shall register orcause to be registered on an expedited basis (to the extent not alreadyregistered) with the United States Patent and Trademark Office or the UnitedStates Copyright Office, as the case may be, those registrable intellectualproperty rights now owned or hereafter developed or acquired by Borrower, tothe extent that Borrower, in its reasonable business judgment, deems itappropriate to so protect such intellectual property rights.

###  

### (b)   Borrower shall promptly giveBank written notice of any applications or registrations of intellectualproperty rights filed with the United States Patent and Trademark Office,including the date of such filing and the registration or application numbers,if any.

###  

### (c)   Borrower shall (i) give Banknot less than 30 days prior written notice of the filing of any applications orregistrations with the United States Copyright Office, including the title ofsuch intellectual property rights to be registered, as such title will appearon such applications or

 

----

 

### registrations, andthe date such applications or registrations will be filed; (ii) prior to thefiling of any such applications or registrations, execute such documents asBank may reasonably request for Bank to maintain its perfection in suchintellectual property rights to be registered by Borrower; (iii) upon therequest of Bank, either deliver to Bank or file such documents simultaneouslywith the filing of any such applications or registrations; (iv) upon filing anysuch applications or registrations, promptly provide Bank with a copy of suchapplications or registrations together with any exhibits, evidence of thefiling of any documents requested by Bank to be filed for Bank to maintain theperfection and priority of its security interest in such intellectual propertyrights, and the date of such filing.

###  

### (d)   Borrower shall execute anddeliver such additional instruments and documents from time to time as Bankshall reasonably request to perfect and maintain the perfection and priority ofBank’s security interest in the Intellectual Property Collateral.

###  

### (e)   Borrower shall (i) protect,defend and maintain the validity and enforceability of the trade secrets,Trademarks, Patents and Copyrights, (ii) use commercially reasonable efforts todetect infringements of the Trademarks, Patents and Copyrights and promptly adviseBank in writing of material infringements detected and (iii) not allow anymaterial Trademarks, Patents or Copyrights to be abandoned, forfeited ordedicated to the public without the written consent of Bank, which shall not beunreasonably withheld.

###  

### (f)    Bank may audit Borrower’sIntellectual Property Collateral to confirm compliance with this Section 6.8,provided such audit may not occur more often than twice per year, unless anEvent of Default has occurred and is continuing.  Bank shall have the right, but not theobligation, to take, at Borrower’s sole expense, any actions that Borrower isrequired under this Section 6.8 to take but which Borrower fails to take, after15 days’ notice to Borrower.  Borrowershall reimburse and indemnify Bank for all reasonable costs and reasonableexpenses incurred in the reasonable exercise of its rights under this Section6.8.

###  

## 6.9   Consent of Inbound Licensors.  Prior to entering into or becoming bound byany Material License, Borrower shall: (i) provide written notice to Bank of the material terms of such licenseor agreement with a description of its likely impact on Borrower’s business orfinancial condition; and (ii) in good faith use commercially reasonable effortsto obtain the consent of, or waiver by, any person whose consent or waiver isnecessary for Borrower’s interest in such licenses or contract rights to bedeemed Collateral and for Bank to have a security interest in it that mightotherwise be restricted by the terms of the applicable license or agreement,whether now existing or entered into in the future, including obtaining anexecuted Consent to Security Interest and Assignment of License Agreement onBank’s standard form, provided, however, that the failure to obtain any suchconsent or waiver shall not constitute a default under this Agreement.

##  

## 6.10 Additional Guaranties and Collateral Security.  Borrower shall cause:

##  

(a)           eachSubsidiary and each Parent Subsidiary not in existence on the Closing Date oracquired by Borrower or Parent after the Closing Date (a “New Subsidiary”), toexecute and deliver to Bank as soon as reasonably practicable and in any eventwithin ten (10) days after the formation, acquisition or change in statusthereof, an unconditional guaranty of the Obligations and any other agreements,deliverables, or actions requested by Bank in connection therewith, each ofwhich documents shall be in form and substance satisfactory to Bank, along withany documents requested by Bank to; and

 

(b)           eachowner of the capital stock of any such New Subsidiary to execute and deliverpromptly and in any event within three (3) days after the formation oracquisition of such New

 

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Subsidiarysuch documents and share certificates as may be requested by Bank in order forBank to take and perfect a security interest in the capital stock of the NewSubsidiary (but only 65% of the voting stock of any foreign Subsidiary) providedthat Borrower need not provide a guaranty of any Inactive Subsidiary for solong as such Inactive Subsidiary is not carrying on business and has assets ofless than $10,000.

 

## 6.11Further Assurances.  At any time and from time to time Borrowershall execute and deliver such further instruments and take such further actionas may reasonably be requested by Bank to effect the purposes of thisAgreement.

##  

# 7.             NEGATIVECOVENANTS.

#  

## Borrower covenantsand agrees that, so long as any credit hereunder shall be available and untilthe outstanding Obligations are paid in full or for so long as Bank may haveany commitment to make any Credit Extensions, Borrower will not do any of thefollowing without Bank’s prior written consent:

##  

## 7.1   Dispositions.  Convey, sell, lease, license, transfer orotherwise dispose of (collectively, to “Transfer”), or permit any of itsSubsidiaries to Transfer, all or any part of its business or property, or movecash balances on deposit with Bank to accounts opened at another financialinstitution, other than Permitted Transfers.

##  

## 7.2   Change in Name, Location,Executive Office, or Executive Management; Change in Business; Change in FiscalYear; Change in Control.  Change itsname or the Borrower State or relocate its chief executive office without 30days prior written notification to Bank; replace its chief executive officer orchief financial officer without 30 days prior written notification to Bank ifthe furnishing of such prior notification is reasonably practicable; engage inany business, or permit any of its Subsidiaries to engage in any business,other than or reasonably related or incidental to the businesses currentlyengaged in by Borrower; change its fiscal year end; have a Change in Control.

##  

## 7.3   Mergers or Acquisitions.  Merge or consolidate, or permit any of itsSubsidiaries to merge or consolidate, with or into any other businessorganization (other than mergers or consolidations of a Subsidiary into anotherSubsidiary or into Borrower), or acquire, or permit any of its Subsidiaries toacquire, all or substantially all of the capital stock or property of anotherPerson except where (i) such transactions do not in the aggregate exceed$250,000 during any fiscal year, (ii) no Event of Default has occurred, iscontinuing or would exist after giving effect to such transactions, (iii)suchtransactions do not result in a Change in Control, and (iv) Borrower is thesurviving entity.

##  

## 7.4   Indebtedness.  Create, incur, assume, guarantee or be orremain liable with respect to any Indebtedness, or permit any Subsidiary so todo, other than Permitted Indebtedness, or prepay any Indebtedness or take anyactions which impose on Borrower an obligation to prepay any Indebtedness,except Indebtedness to Bank.

##  

## 7.5   Encumbrances.  Create, incur, assume or allow any Lien withrespect to any of its property, or assign or otherwise convey any right toreceive income, including the sale of any Accounts, or permit any of itsSubsidiaries so to do, except for Permitted Liens, or covenant to any otherPerson that Borrower in the future will refrain from creating, incurring,assuming or allowing any Lien with respect to any of Borrower’s property.

##  

## 7.6   Distributions.  Pay any dividends or make any otherdistribution or payment on account of or in redemption, retirement or purchaseof any capital stock, except that Borrower may (i) repurchase the stock offormer employees pursuant to stock repurchase agreements as long as an Event ofDefault does not exist prior to such repurchase or would not exist after givingeffect to such repurchase,

 

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## and (ii)repurchase the stock of former employees pursuant to stock repurchase agreementsby the cancellation of indebtedness owed by such former employees to Borrowerregardless of whether an Event of Default exists.

##  

## 7.7   Investments.  Directly or indirectly acquire or own, ormake any Investment in or to any Person, or permit any of its Subsidiaries soto do, other than Permitted Investments, or maintain or invest any of itsproperty with a Person other than Bank or Bank’s Affiliates or permit anySubsidiary to do so unless such Person has entered into a control agreementwith Bank, in form and substance satisfactory to Bank, or suffer or permit anySubsidiary to be a party to, or be bound by, an agreement that restricts suchSubsidiary from paying dividends or otherwise distributing property toBorrower.

##  

## 7.8   Transactions with Affiliates. Directly or indirectly enter into orpermit to exist any material transaction with any Affiliate of Borrower exceptfor transactions that are in the ordinary course of Borrower’s business, uponfair and reasonable terms that are no less favorable to Borrower than would beobtained in an arm’s length transaction with a non-affiliated Person.

##  

## 7.9   Subordinated Debt.  Make any payment in respect of anySubordinated Debt, or permit any of its Subsidiaries to make any such payment,except in compliance with the terms of such Subordinated Debt (including termsprohibiting such payments in the applicable subordination agreement in favor ofBank), or amend any provision affecting Bank’s rights contained in anydocumentation relating to the Subordinated Debt without Bank’s prior writtenconsent.

##  

## 7.10Inventory and Equipment.  Store the Inventory or the Equipment with abailee, warehouseman, or similar third party unless the third party has beennotified of Bank’s security interest and Bank (a) has received an acknowledgmentfrom the third party that it is holding or will hold the Inventory or Equipmentfor Bank’s benefit or (b) is in possession of the warehouse receipt, wherenegotiable, covering such Inventory or Equipment.  Except for Inventory sold in the ordinarycourse of business and except for such other locations as Bank may approve inwriting, Borrower shall keep the Inventory and Equipment only at the locationset forth in Section 10 and such other locations of which Borrower gives Bankprior written notice and as to which Bank files a financing statement whereneeded to perfect its security interest.

##  

## 7.11No Investment Company; MarginRegulation.  Become or be controlledby an “investment company,” within the meaning of the Investment Company Act of1940, or become principally engaged in, or undertake as one of its importantactivities, the business of extending credit for the purpose of purchasing orcarrying margin stock, or use the proceeds of any Credit Extension for suchpurpose.

##  

# 8.             EVENTSOF DEFAULT.

#  

## Any one or more ofthe following events shall constitute an Event of Default by Borrower underthis Agreement:

##  

## 8.1   Payment Default.  If Borrower fails to pay any of theObligations when due;

##  

## 8.2   Covenant Default.

##  

### (a)   If Borrower fails to performany obligation under Article 6 or violates any of the covenants contained inArticle 7 of this Agreement; or

 

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### (b)   If Borrower fails or neglectsto perform or observe any other material term, provision, condition, covenantcontained in this Agreement, in any of the Loan Documents, or in any otherpresent or future agreement between Borrower and Bank and as to any defaultunder such other term, provision, condition or covenant that can be cured, hasfailed to cure such default within 10 days after Borrower receives noticethereof or any officer of Borrower becomes aware thereof; provided, however,that if the default cannot by its nature be cured within the 10 day period orcannot after diligent attempts by Borrower be cured within such 10 day period,and such default is likely to be cured within a reasonable time, then Borrowershall have an additional reasonable period (which shall not in any case exceed30 days) to attempt to cure such default, and within such reasonable timeperiod the failure to have cured such default shall not be deemed an Event ofDefault but no Credit Extensions will be made;

###  

## 8.3   Material Adverse Change.  If there occurs a material adverse change inBorrower’s prospects, business or financial condition, or if there is amaterial impairment in the prospect of repayment of any portion of theObligations or a material impairment in the perfection, value or priority ofBank’s security interests in the Collateral;

##  

## 8.4   Attachment.  If any material portion of Borrower’s assetsis attached, seized, subjected to a writ or distress warrant, or is leviedupon, or comes into the possession of any trustee, receiver or person acting ina similar capacity and such attachment, seizure, writ or distress warrant orlevy has not been removed, discharged or rescinded within 10 days, or ifBorrower is enjoined, restrained, or in any way prevented by court order fromcontinuing to conduct all or any material part of its business affairs, or if ajudgment or other claim becomes a lien or encumbrance upon any material portionof Borrower’s assets, or if a notice of lien, levy, or assessment is filed ofrecord with respect to any of Borrower’s assets by the United StatesGovernment, or any department, agency, or instrumentality thereof, or by anystate, county, municipal, or governmental agency, and the same is not paidwithin ten days after Borrower receives notice thereof, provided that none ofthe foregoing shall constitute an Event of Default where such action or eventis stayed or an adequate bond has been posted pending a good faith contest byBorrower (provided that no Credit Extensions will be made during such cureperiod);

##  

## 8.5   Insolvency.  If Borrower becomes insolvent, or if anInsolvency Proceeding is commenced by Borrower, or if an Insolvency Proceedingis commenced against Borrower and is not dismissed or stayed within 30 days(provided that no Credit Extensions will be made prior to the dismissal of suchInsolvency Proceeding);

##  

## 8.6   Other Agreements.  If there is a default or other failure toperform in any agreement to which Borrower is a party with a third party orparties resulting in a right by such third party or parties, whether or notexercised, to accelerate the maturity of any Indebtedness in an amount inexcess of $100,000 or that would reasonably be expected to have a MaterialAdverse Effect;

##  

## 8.7   Subordinated Debt.  If Borrower makes any payment on account ofSubordinated Debt, except to the extent the payment is allowed under anysubordination agreement entered into with Bank;

##  

## 8.8   Judgments.  If a judgment or judgments for the payment ofmoney in an amount, individually or in the aggregate, of at least $100,000shall be rendered against Borrower and shall remain unsatisfied and unstayedfor a period of 10 days (provided that no Credit Extensions will be made priorto the satisfaction or stay of the judgment);

##  

## 8.9   Misrepresentations.  If any material misrepresentation or materialmisstatement exists now or hereafter in any warranty or representation setforth herein or in any certificate delivered to Bank

 

----

 

## by any ResponsibleOfficer pursuant to this Agreement or to induce Bank to enter into thisAgreement or any other Loan Document;

##  

## 8.10 Guaranty. If any guaranty of or pledge of security in support ofall or a portion of the Obligations (collectively, a “Guaranty”) ceases for anyreason to be in full force and effect, or any guarantor or pledgor fails toperform any obligation under any Guaranty or a security or pledge agreement(collectively, the “Guaranty Documents”), or any event of default occurs underany Guaranty Document or any guarantor revokes or purports to revoke aGuaranty, or any material misrepresentation or material misstatement exists nowor hereafter in any warranty or representation set forth in any GuarantyDocument or in any certificate delivered to Bank in connection with anyGuaranty Document, or if any of the circumstances described in Sections 8.3through 8.9 occur with respect to any guarantor or pledgor.

##  

# 9.             BANK’SRIGHTS AND REMEDIES.

#  

## 9.1   Rights and Remedies.  Upon the occurrence and during thecontinuance of an Event of Default, Bank may, at its election, without noticeof its election and without demand, do any one or more of the following, all ofwhich are authorized by Borrower:

##  

### (a)   Declare all Obligations, whetherevidenced by this Agreement, by any of the other Loan Documents, or otherwise,immediately due and payable (provided that upon the occurrence of an Event ofDefault described in Section 8.5 (insolvency), all Obligations shall becomeimmediately due and payable without any action by Bank);

###  

### (b)   To the extent any letters ofcredit have been issued by or through Bank, demand that Borrower  (i) deposit cash with Bank in an amount equalto the amount of such letters of credit remaining undrawn, as collateralsecurity for the repayment of any future drawings under such letters of credit,and (ii) pay in advance all letter of credit fees scheduled to be paid orpayable over the remaining term of the letters of credit, and Borrower shallpromptly deposit and pay such amounts;

###  

### (c)   Cease advancing money orextending credit to or for the benefit of Borrower under this Agreement orunder any other agreement between Borrower and Bank;

###  

### (d)   Settle or adjust disputes andclaims directly with account debtors for amounts, upon terms and in whateverorder that Bank reasonably considers advisable;

###  

### (e)   Make such payments and do suchacts as Bank considers necessary or reasonable to protect its security interestin the Collateral.  Borrower agrees toassemble the Collateral if Bank so requires, and to make the Collateralavailable to Bank as Bank may designate. Borrower authorizes Bank to enter the premises where the Collateral islocated, to take and maintain possession of the Collateral, or any part of it,and to pay, purchase, contest, or compromise any encumbrance, charge, or lienwhich in Bank’s determination appears to be prior or superior to its securityinterest and to pay all expenses incurred in connection therewith.  With respect to any of Borrower’s ownedpremises, Borrower hereby grants Bank a license to enter into possession ofsuch premises and to occupy the same, without charge, in order to exercise anyof Bank’s rights or remedies provided herein, at law, in equity, or otherwise;

###  

### (f)    Set off and apply to theObligations any and all (i) balances and deposits of Borrower or any Guarantorheld by Bank, including the Required Balance and any other cash, certificatesof deposit, money market accounts, or deposit accounts held by Bank asCollateral, and (ii) indebtedness at any time owing to or for the credit or theaccount of Borrower held by Bank;

 

----

 

### (g)   Ship, reclaim, recover, store,finish, maintain, repair, prepare for sale, advertise for sale, and sell (inthe manner provided for herein) the Collateral. Bank is hereby granted a license or other right, solely pursuant to theprovisions of this Section 9.1, to use, without charge, Borrower’s labels,patents, copyrights, rights of use of any name, trade secrets, trade names,trademarks, service marks, and advertising matter, or any property of a similarnature, as it pertains to the Collateral, in completing production of,advertising for sale, and selling any Collateral and, in connection with Bank’sexercise of its rights under this Section 9.1, Borrower’s rights under alllicenses and all franchise agreements shall inure to Bank’s benefit;

###  

### (h)   Sell the Collateral at either apublic or private sale, or both, by way of one or more contracts ortransactions, for cash or on terms, in such manner and at such places(including Borrower’s premises) as Bank determines is commercially reasonable,and apply any proceeds to the Obligations in whatever manner or order Bankdeems appropriate.  Bank may sell theCollateral without giving any warranties as to the Collateral.  Bank may specifically disclaim any warrantiesof title or the like.  This procedurewill not be considered adversely to affect the commercial reasonableness of anysale of the Collateral.  If Bank sellsany of the Collateral upon credit, Borrower will be credited only with paymentsactually made by the purchaser, received by Bank, and applied to theindebtedness of the purchaser.  If thepurchaser fails to pay for the Collateral, Bank may resell the Collateral andBorrower shall be credited with the proceeds of the sale;

###  

### (i)    Bank may credit bid andpurchase at any public sale;

###  

### (j)    Apply for the appointment of areceiver, trustee, liquidator or conservator of the Collateral, without noticeand without regard to the adequacy of the security for the Obligations andwithout regard to the solvency of Borrower, any guarantor or any other Personliable for any of the Obligations; and

###  

### (k)   Any deficiency that existsafter disposition of the Collateral as provided above will be paid immediatelyby Borrower.

###  

Bank maycomply with any applicable state or federal law requirements in connection witha disposition of the Collateral and compliance will not be considered adverselyto affect the commercial reasonableness of any sale of the Collateral.

 

## 9.2   Power of Attorney.  Effective only upon the occurrence and duringthe continuance of an Event of Default, Borrower hereby irrevocably appointsBank (and any of Bank’s designated officers, or employees) as Borrower’s trueand lawful attorney to:  (a) sendrequests for verification of Accounts or notify account debtors of Bank’ssecurity interest in the Accounts; (b) endorse Borrower’s name on any checks orother forms of payment or security that may come into Bank’s possession; (c)sign Borrower’s name on any invoice or bill of lading relating to any Account,drafts against account debtors, schedules and assignments of Accounts,verifications of Accounts, and notices to account debtors; (d) dispose of anyCollateral; (e) make, settle, and adjust all claims under and decisions withrespect to Borrower’s policies of insurance; (f) settle and adjust disputes andclaims respecting the accounts directly with account debtors, for amounts andupon terms which Bank determines to be reasonable; (g) enter into ashort-form  intellectual propertysecurity agreement consistent with the terms of this Agreement for recordingpurposes only or modify, in its sole discretion, any intellectual propertysecurity agreement entered into between Borrower and Bank without firstobtaining Borrower’s approval of or signature to such modification by amending ExhibitsA, B, and C, thereof, as appropriate, to include reference toany right, title or interest in any Copyrights, Patents or Trademarks acquiredby Borrower after the execution hereof or to delete any reference to any right,title or interest in any Copyrights, Patents or Trademarks in which Borrower nolonger has or claims to have any right, title or interest; and (h) file, in itssole

 

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## discretion, one ormore financing or continuation statements and amendments thereto, relative toany of the Collateral without the signature of Borrower where permitted by law;provided Bank may exercise such power of attorney to sign the name of Borroweron any of the documents described in clauses (g) and (h) above, regardless ofwhether an Event of Default has occurred. The appointment of Bank as Borrower’s attorney in fact, and each andevery one of Bank’s rights and powers, being coupled with an interest, isirrevocable until all of the Obligations have been fully repaid and performedand Bank’s obligation to provide advances hereunder is terminated.

##  

## 9.3   Accounts Collection.  At any time after the occurrence and duringthe continuation of an Event of Default, Bank may notify any Person owing fundsto Borrower of Bank’s security interest in such funds and verify the amount ofsuch Account.  Borrower shall collect allamounts owing to Borrower for Bank, receive in trust all payments as Bank’strustee, and immediately deliver such payments to Bank in their original formas received from the account debtor, with proper endorsements for deposit.

##  

## 9.4   Bank Expenses.  If Borrower fails to pay any amounts orfurnish any required proof of payment due to third persons or entities, asrequired under the terms of this Agreement, then Bank may do any or all of thefollowing after reasonable notice to Borrower: (a) make payment of the same or any part thereof; (b) set up suchreserves under the Revolving Line as Bank deems necessary to protect Bank fromthe exposure created by such failure; or (c) obtain and maintain insurancepolicies of the type discussed in Section 6.5 of this Agreement, and take anyaction with respect to such policies as Bank deems prudent.  Any amounts so paid or deposited by Bankshall constitute Bank Expenses, shall be immediately due and payable, and shallbear interest at the then applicable rate hereinabove provided, and shall besecured by the Collateral.  Any paymentsmade by Bank shall not constitute an agreement by Bank to make similar paymentsin the future or a waiver by Bank of any Event of Default under this Agreement.

##  

## 9.5   Bank’s Liability forCollateral.  Bank has no obligationto clean up or otherwise prepare the Collateral for sale. So long as Bankcomplies with reasonable banking practices, shall not liable for: (a) thesafekeeping of the Collateral; (b) any loss or damage to the Collateral;(c) any diminution in the value of the Collateral; or (d) any act or default ofany carrier, warehouseman, bailee, or other person.  Except as specifically set forth in thepreceding sentence, all risk of loss, damage or destruction of the Collateralshall be borne by Borrower.

##  

## 9.6   No Obligation to PursueOthers.  Bank has no obligation toattempt to satisfy the Obligations by collecting them from any other personliable for them and Bank may release, modify or waive any collateral providedby any other Person to secure any of the Obligations, all without affectingBank’s rights against Borrower.  Borrowerwaives any right it may have to require Bank to pursue any other Person for anyof the Obligations.

##  

## 9.7   Remedies Cumulative.  Bank’s rights and remedies under thisAgreement, the Loan Documents, and all other agreements shall becumulative.  Bank shall have all otherrights and remedies not inconsistent herewith as provided under the Code, bylaw, or in equity.  No exercise by Bankof one right or remedy shall be deemed an election, and no waiver by Bank ofany Event of Default on Borrower’s part shall be deemed a continuingwaiver.  No delay by Bank shallconstitute a waiver, election, or acquiescence by it.  No waiver by Bank shall be effective unlessmade in a written document signed on behalf of Bank and then shall be effectiveonly in the specific instance and for the specific purpose for which it wasgiven.  Borrower expressly agrees thatthis Section 9.7 may not be waived or modified by Bank by course ofperformance, conduct, estoppel or otherwise.

 

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## 9.8   Demand; Protest.  Except as otherwise provided in thisAgreement, Borrower waives demand, protest, notice of protest, notice ofdefault or dishonor, notice of payment and nonpayment and any other noticesrelating to the Obligations.

##  

# 10.           NOTICES.

#  

## Unless otherwiseprovided in this Agreement, all notices or demands by any party relating to thisAgreement or any other agreement entered into in connection herewith shall bein writing and (except for financial statements and other informationaldocuments which may be sent by first-class mail, postage prepaid) shall bepersonally delivered or sent by a recognized overnight delivery service,certified mail, postage prepaid, return receipt requested, or by telefacsimileto Borrower or to Bank, as the case may be, at its addresses set forth below:

 
| If to Borrower: |   | RADVIEW SOFTWARE, INC.           |
|-----------------|--------|----------------------------------|
|            |   | 7 New England Executive  Park    |
|            |   | Burlington, MA 01803             |
|            |   | Attn: Chief Financial  Officer   |
|            |   | FAX: (781) 238-8875              |
|            |   |                             |
| with a copy to: |   | FULBRIGHT &  JAWORSKI L.L.P. |
|            |   | 666 Fifth Avenue                 |
|            |   | New York, NY                     |
|            |   | Attn: Neil Gold                  |
|            |   | FAX: (212) 318-3400              |
|            |   |                             |
| If to Bank:     |   | Comerica Bank                    |
|            |   | 2321 Rosecrans Ave.,  Suite 5000 |
|            |   | El Segundo, CA 90245             |
|            |   | Attn: Manager                    |
|            |   | FAX: (310) 297-2290              |
|            |   |                             |
| with a copy to: |   | Comerica Bank                    |
|            |   | 100 Federal Street,  28th Floor  |
|            |   | Boston, MA 02110                 |
|            |   | Attn: Chris Lloyd                |
|            |   | FAX: (617) 757-6310              |

##  

## The parties heretomay change the address at which they are to receive notices hereunder, bynotice in writing in the foregoing manner given to the other.

##  

# 11.           CHOICEOF LAW AND VENUE; JURY TRIAL WAIVER.

#  

## This Agreement shall begoverned by, and construed in accordance with, the internal laws of the Stateof California, without regard to principles of conflicts of law.  Jurisdiction shall lie in the State ofCalifornia.  BANK AND BORROWER EACH ACKNOWLEDGETHAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BEWAIVED.  EACH OF THEM, AFTER CONSULTINGOR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR CHOICE,KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVETO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR

 

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## ARISING OUT OF THISAGREEMENT OR ANY RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE TRANSACTIONSCONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS(WHETHER ORAL OR WRITTEN), OR ACTION OF ANY OF THEM.  THESE PROVISIONS SHALL NOT BE DEEMED TO HAVEBEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY BANK OR BORROWER, EXCEPT BY AWRITTEN INSTRUMENT EXECUTED BY EACH OF THEM.

##  

# 12.           REFERENCEPROVISION.

#  

The parties prefer that any dispute between them beresolved in litigation subject to a Jury Trial Waiver as set forth in Section11 of this Agreement, but the availability of that process is in doubt becauseof the opinion of the California Court of Appeal in Grafton Partners LP v.Superior Court, 9 Cal.Rptr.3d 511.   ThisReference Provision will be applicable until the California Supreme Courtcompletes its review of that case, and will continue to be applicable if eitherthat court or a California Court of Appeal publishes a decision holding that apre-dispute Jury Trial Waiver provision similar to that contained in the LoanDocuments is invalid or unenforceable. Delay in requesting appointment of a referee pending review of any suchdecision, or participation in litigation pending review, will not be deemed awaiver of this Reference Provision.

 

## 12.1Mechanics.

##  

### (a)   Other than (i) nonjudicialforeclosure of security interests in real or personal property,  (ii) the appointment of a receiver or (iii)the exercise of other provisional remedies (any of which may be initiatedpursuant to applicable law), any controversy, dispute or claim (each, a“Claim”) between the parties arising out of or relating to this Agreement orany other document, instrument or agreement between the Bank and theundersigned (collectively in this Section, the “Loan Documents”), will beresolved by a reference proceeding in California in accordance with theprovisions of Section 638 *et seq*. of theCalifornia Code of Civil Procedure (“CCP”), or their successor sections, whichshall constitute the exclusive remedy for the resolution of any Claim,including whether the Claim is subject to the reference proceeding.  Except as otherwise provided in the LoanDocuments, venue for the reference proceeding will be in the Superior Court orFederal District Court in the County or District where venue is otherwiseappropriate under applicable law (the “Court”).

###  

### (b)   The referee shall be a retiredJudge or Justice selected by mutual written agreement of the parties.  If the parties do not agree, the refereeshall be selected by the Presiding Judge of the Court (or his or herrepresentative).  A request forappointment of a referee may be heard on an *ex parte*orexpedited basis, and the parties agree that irreparable harm would result if *ex parte* relief is not granted.  The referee shall be appointed to sit withall the powers provided by law.  Eachparty shall have one peremptory challenge pursuant to CCP §170.6.  Pending appointment of the referee, the Courthas power to issue temporary or provisional remedies.

###  

### (c)   The parties agree that time isof the essence in conducting the reference proceedings.  Accordingly, the referee shall be requestedto (a) set the matter for a status and trial-setting conference within fifteen(15) days after the date of selection of the referee, (b) if practicable, tryall issues of law or fact within ninety (90) days after the date of theconference and (c) report a statement of decision within twenty (20) days afterthe matter has been submitted for decision. Any decision rendered by the referee will be final, binding andconclusive, and judgment shall be entered pursuant to CCP §644.

###  

### (d)   The referee will have power toexpand or limit the amount and duration of discovery.   The referee may set or extend discoverydeadlines or cutoffs for good cause, including a party’s failure to providerequested discovery for any reason whatsoever. Unless otherwise ordered, no

 

----

 

### party shall beentitled to “priority” in conducting discovery, depositions may be taken byeither party upon seven (7) days written notice, and all other discovery shallbe responded to within fifteen (15) days after service.  All disputes relating to discovery whichcannot be resolved by the parties shall be submitted to the referee whosedecision shall be final and binding.

###  

12.2         Procedures.  Except as expressly set forth in thisAgreement, the referee shall determine the manner in which the referenceproceeding is conducted including the time and place of hearings, the order ofpresentation of evidence, and all other questions that arise with respect tothe course of the reference proceeding. All proceedings and hearings conducted before the referee, except fortrial, shall be conducted without a court reporter, except that when any partyso requests, a court reporter will be used at any hearing conducted before thereferee, and the referee will be provided a courtesy copy of thetranscript.  The party making such arequest shall have the obligation to arrange for and pay the court reporter.  Subject to the referee’s power to award coststo the prevailing party, the parties will equally share the cost of the refereeand the court reporter at trial.

 

12.3         Applicationof Law. The referee shall be required to determine all issues in accordancewith existing case law and the statutory laws of the State of California.  The rules of evidence applicable toproceedings at law in the State of California will be applicable to thereference proceeding.  The referee shallbe empowered to enter equitable as well as legal relief, provide all temporaryor provisional remedies, enter equitable orders that will be binding on theparties and rule on any motion which would be authorized in a trial, includingwithout limitation motions for summary judgment or summary adjudication .  The referee shall issue a decision at theclose of the reference proceeding which disposes of all claims of the partiesthat are the subject of the reference. The referee’s decision shall be entered by the Court as a judgment or anorder in the same manner as if the action had been tried by the Court.  The parties reserve the right to appeal fromthe final judgment or order or from any appealable decision or order entered bythe referee.  The parties reserve the rightto findings of fact, conclusions of laws, a written statement of decision, andthe right to move for a new trial or a different judgment, which new trial, ifgranted, is also to be a reference proceeding under this provision.

 

12.4         Repeal.If the enabling legislation which provides for appointment of a referee isrepealed (and no successor statute is enacted), any dispute between the partiesthat would otherwise be determined by reference procedure will be resolved anddetermined by arbitration.  Thearbitration will be conducted by a retired judge or Justice, in accordance withthe California Arbitration Act §1280 through §1294.2 of the CCP as amended fromtime to time.  The limitations withrespect to discovery set forth above shall apply to any such arbitrationproceeding.

 

12.5         THEPARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCEPROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY, AND THAT THEY ARE INEFFECT WAIVING THEIR RIGHT TO TRIAL BY JURY IN AGREEING TO THIS REFERENCEPROVISION.  AFTER CONSULTING (OR HAVINGHAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTYKNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES THAT THISREFERENCE PROVISION WILL APPLY TO ANY DISPUTE BETWEEN THEM WHICH ARISES OUT OFOR IS RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS.

 

# 13.           GENERALPROVISIONS.

#  

## 13.1Successors and Assigns.  This Agreement shall bind and inure to thebenefit of the respective successors and permitted assigns of each of theparties and shall bind all persons who become bound as a debtor to thisAgreement; provided, however, that neither this Agreement nor any rights

 

----

 

## hereunder may beassigned by Borrower without Bank’s prior written consent, which consent may begranted or withheld in Bank’s sole discretion. Bank shall have the right without the consent of or notice to Borrowerto sell, transfer, negotiate, or grant participation in all or any part of, orany interest in, Bank’s obligations, rights and benefits hereunder.

##  

## 13.2Indemnification.  Borrower shall defend, indemnify and holdharmless Bank and its officers, employees, and agents against:  (a) all obligations, demands, claims, andliabilities claimed or asserted by any other party in connection with thetransactions contemplated by this Agreement; and (b) all losses or BankExpenses in any way suffered, incurred, or paid by Bank, its officers,employees and agents as a result of or in any way arising out of, following, orconsequential to transactions between Bank and Borrower whether under thisAgreement, or otherwise (including without limitation reasonable attorneys feesand expenses), except for losses caused by Bank’s gross negligence or willfulmisconduct.

##  

## 13.3Time of Essence.  Time is of the essence for the performance ofall obligations set forth in this Agreement.

##  

## 13.4Severability of Provisions.  Each provision of this Agreement shall beseverable from every other provision of this Agreement for the purpose ofdetermining the legal enforceability of any specific provision.

##  

## 13.5Amendments in Writing,Integration. All amendments to or terminations of this Agreement or theother Loan Documents must be in writing. All prior agreements, understandings, representations, warranties, andnegotiations between the parties hereto with respect to the subject matter ofthis Agreement and the other Loan Documents, if any, are merged into thisAgreement and the Loan Documents.

##  

## 13.6Counterparts.  This Agreement may be executed in any numberof counterparts and by different parties on separate counterparts, each ofwhich, when executed and delivered, shall be deemed to be an original, and allof which, when taken together, shall constitute but one and the same Agreement.

##  

## 13.7Survival.  All covenants, representations and warrantiesmade in this Agreement shall continue in full force and effect so long as anyObligations remain outstanding or Bank has any obligation to make any CreditExtension to Borrower.  The obligationsof Borrower to indemnify Bank with respect to the expenses, damages, losses,costs and liabilities described in Section 13.2 shall survive until allapplicable statute of limitations periods with respect to actions that may bebrought against Bank have run.

##  

## 13.8Confidentiality.  In handling any confidential information,Bank and all employees and agents of Bank shall exercise the same degree ofcare that Bank exercises with respect to its own proprietary information of thesame types to maintain the confidentiality of any non-public informationthereby received or received pursuant to this Agreement except that disclosureof such information may be made (i) to the subsidiaries or Affiliates of Bankin connection with their present or prospective business relations withBorrower, (ii) to prospective transferees or purchasers of any interest in theLoans, provided that they have entered into a comparable confidentialityagreement in favor of Borrower and have delivered a copy to Borrower, (iii) asrequired by law, regulations, rule or order, subpoena, judicial order orsimilar order, (iv) as may be required in connection with the examination,audit or similar investigation of Bank and (v) as Bank may determine inconnection with the enforcement of any remedies hereunder.  Confidential information hereunder shall notinclude information that either:  (a) isin the public domain or in the knowledge or possession of Bank when disclosedto Bank, or becomes part of the public domain after disclosure to Bank throughno fault of Bank; or (b) is disclosed  toBank by a third 

 

----

 

## party, providedBank does not have actual knowledge that such third party is prohibited fromdisclosing such information.

##  

IN WITNESSWHEREOF, the parties hereto have caused this Agreement to be executed as of thedate first above written.

 
|   |   | RADVIEW SOFTWARE, INC. |
|--------|--------|------------------------|
|   |   |                   |
|   |   |                   |
|   |   | By:                    | /s/ CHRISTOPHER DINEEN |
|   |   |                   |
|   |   | Title:                 | Chief Financial Officer |
|   |   |                   |
|   |   |                   |
|   |   | COMERICA BANK          |
|   |   |                   |
|   |   |                   |
|   |   | By:                    | /s/ PAULA HOWELL |
|   |   |                   |
|   |   | Title:                 | SVP |
|        |        |                        |  |  |  |

 

----

 

EXHIBIT A

 

DEFINITIONS

 

“Accounts”means all presently existing and hereafter arising accounts, contract rights,payment intangibles and all other forms of obligations owing to Borrowerarising out of the sale or lease of goods (including, without limitation, thelicensing of software and other technology) or the rendering of services byBorrower and any and all credit insurance, guaranties, and other security therefor,as well as all merchandise returned to or reclaimed by Borrower and Borrower’sBooks relating to any of the foregoing.

 

“Advance”or “Advances” means a cash advance or cash advances under the Revolving Line.

 

“Affiliate”means, with respect to any Person, any Person that owns or controls directly orindirectly such Person, any Person that controls or is controlled by or isunder common control with such Person, and each of such Person’s seniorexecutive officers, directors, and partners (if such Person is a partnership orsimilar entity).

 

“BankExpenses” means all reasonable costs or expenses (including reasonableattorneys’ fees and expenses, whether generated in-house or by outside counsel)incurred in connection with the preparation, negotiation, administration, andenforcement of the Loan Documents; reasonable Collateral audit fees; and Bank’s reasonable attorneys’ feesand expenses (whether generated in-house or by outside counsel) incurred inamending, enforcing or defending the Loan Documents (including fees andexpenses of appeal), incurred before, during and after an InsolvencyProceeding, whether or not suit is brought.

 

“BorrowerState” means New Jersey, the state under whose laws Borrower is organized.

 

“Borrower’sBooks” means all of Borrower’s books and records including:  ledgers; records concerning Borrower’s assetsor liabilities, the Collateral, business operations or financial condition; andall computer programs, or tape files, and the equipment, containing suchinformation.

 

“BorrowingBase” means an amount equal to $1,000,000 plus 75% of Eligible Accounts,as determined by Bank with reference to the most recent Borrowing BaseCertificate delivered by Borrower.

 

“BorrowerParty” or “Borrower Parties” means, individually or collectively, asapplicable, Parent and the Parent Subsidiaries, including Borrower and itsSubsidiaries.

 

“BusinessDay” means any day that is not a Saturday, Sunday, or other day on which banksin the State of California or the Commonwealth of Massachusetts are authorizedor required to close.

 

“Cash”means unrestricted cash and cash equivalents.

 

“Changein Control” shall mean a transaction in which any “person” or “group” (withinthe meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under theSecurities Exchange Act of 1934), directly or indirectly, of a sufficientnumber of shares of all classes of stock then outstanding of Borrowerordinarily entitled to vote in the election of directors, empowering such“person” or “group” to elect a majority of the Board of Directors of Borrower,who did not have such power before such transaction.

 

“ChiefExecutive Office State” means Massachusetts, where Borrower’s chief executiveoffice is located.

 

“ClosingDate” means the date of this Agreement.

 

----

 

“Code”means the California Uniform Commercial Code as amended or supplemented fromtime to time.

 

“Collateral”means the property described on Exhibit B attached hereto and allNegotiable Collateral and Intellectual Property Collateral to the extent notdescribed on Exhibit B, except to the extent any such property (i) isnonassignable by its terms without the consent of the licensor thereof oranother party (but only to the extent such prohibition on transfer isenforceable under applicable law, including, without limitation, Sections 9406and 9408 of the Code), (ii) the granting of a security interest therein iscontrary to applicable law, provided that upon the cessation of any such restrictionor prohibition, such property shall automatically become part of theCollateral, or (iii) constitutes the capital stock of a controlled foreigncorporation (as defined in the IRC), in excess of 65% of the voting power ofall classes of capital stock of such controlled foreign corporations entitledto vote.

 

“CollateralState” means the state or states where the Collateral is located, which areCalifornia, Massachusetts, New Jersey, and Texas.

 

“ContingentObligation” means, as applied to any Person, any direct or indirect liability,contingent or otherwise, of that Person with respect to (i) any indebtedness,lease, dividend, letter of credit or other obligation of another, including,without limitation, any such obligation directly or indirectly guaranteed,endorsed, co-made or discounted or sold with recourse by that Person, or inrespect of which that Person is otherwise directly or indirectly liable; (ii)any obligations with respect to undrawn letters of credit, corporate creditcards or merchant services issued for the account of that Person; and (iii) allobligations arising under any interest rate, currency or commodity swapagreement, interest rate cap agreement, interest rate collar agreement, orother agreement or arrangement designated to protect a Person againstfluctuation in interest rates, currency exchange rates or commodity prices;provided, however, that the term “Contingent Obligation” shall not includeendorsements for collection or deposit in the ordinary course of business.  The amount of any Contingent Obligation shallbe deemed to be an amount equal to the stated or determined amount of theprimary obligation in respect of which such Contingent Obligation is made or,if not stated or determinable, the maximum reasonably anticipated liability inrespect thereof as determined by such Person in good faith; provided, however,that such amount shall not in any event exceed the maximum amount of theobligations under the guarantee or other support arrangement.

 

“Copyrights”means any and all copyright rights, copyright applications, copyrightregistrations and like protections in each work or authorship and derivativework thereof, whether published or unpublished and whether or not the same alsoconstitutes a trade secret, now or hereafter existing, created, acquired orheld.

 

“CreditExtension” means each Advance, or any other extension of credit by Bank to orfor the benefit of Borrower hereunder.

 

“EligibleAccounts” means those Accounts that arise in the ordinary course of Borrower’sbusiness that comply with all of Borrower’s representations and warranties toBank set forth in Section 5.3; provided, that Bank may change the standards ofeligibility by giving Borrower 30 days prior written notice.  Unless otherwise agreed to by Bank, EligibleAccounts shall not include the following:

 

### (a)                                  Accountsthat the account debtor has failed to pay in full within 90 days of invoicedate;

###  

### (b)                                 Creditbalances over 90 days;

###  

### (c)                                  Accountswith respect to an account debtor, 25% of whose Accounts the account debtor hasfailed to pay within 90 days of invoice date;

###  

----

 

### (d)                                 Accountswith respect to an account debtor, including Subsidiaries and Affiliates, whosetotal obligations to Borrower exceed 25% of all Accounts, to the extent suchobligations exceed the aforementioned percentage, except as approved in writingby Bank;

###  

### (e)                                  Accountswith respect to which the account debtor does not have its principal place ofbusiness in the United States, except for Eligible Foreign Accounts;

###  

### (f)                                    Accountswith respect to which the account debtor is the United States or anydepartment, agency, or instrumentality of the United States;

###  

### (g)                                 Accountswith respect to which Borrower is liable to the account debtor for goods soldor services rendered by the account debtor to Borrower, but only to the extentof any amounts owing to the account debtor against amounts owed to Borrower;

###  

### (h)                                 Accountswith respect to which goods are placed on consignment, guaranteed sale, sale orreturn, sale on approval, bill and hold, demo or promotional, or other terms byreason of which the payment by the account debtor may be conditional;

###  

### (i)                                     Accountswith respect to which the account debtor is an officer, employee, agent orAffiliate of Borrower;

###  

### (j)                                     Accountsthat have not yet been billed to the account debtor  or that relate to deposits (such as goodfaith deposits) or other property of the account debtor held by Borrower forthe performance of services or delivery of goods which Borrower has not yetperformed or delivered;

###  

### (k)                                  Pre-billedAccounts, other than contracts for software maintenance, which shall beincluded;

###  

### (l)                                     Accountswith respect to which the account debtor disputes liability or makes any claimwith respect thereto as to which Bank believes, in its sole discretion, thatthere may be a basis for dispute (but only to the extent of the amount subjectto such dispute or claim), or is subject to any Insolvency Proceeding, orbecomes insolvent, or goes out of business;

###  

### (m)                               Accountsthe collection of which Bank reasonably determines after inquiry andconsultation with Borrower to be doubtful; and

###  

### (n)                                 Retentionsand hold-backs.

###  

“EligibleForeign Accounts” means Accounts with respect to which the account debtor doesnot have its principal place of business in the United States and that are (i)supported by one or more letters of credit in an amount and of a tenor, andissued by a financial institution, acceptable to Bank, (ii) insured by theExport Import Bank of the United States, (iii) generated by an account debtorwith its principal place of business in Canada, provided that the Bank hasperfected its security interest in the appropriate Canadian province, or (iv)approved by Bank on a case-by-case basis. All Eligible Foreign Accounts must be calculated in U.S. Dollars.

 

“EnvironmentalLaws” means all laws, rules, regulations, orders and the like issued by anyfederal state, local foreign or other governmental or quasi-governmentalauthority or any agency pertaining to the environment or to any hazardousmaterials or wastes, toxic substances, flammable, explosive or radioactivematerials, asbestos or other similar materials.

 

----

 

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

 

“ERISA”means the Employee Retirement Income Security Act of 1974, as amended, and theregulations thereunder.

 

“Eventof Default” has the meaning assigned in Article 8.

 

 “GAAP” means generally accepted accountingprinciples, consistently applied, as in effect from time to time in the UnitedStates of America.

 

“InactiveSubsidiary” means any Subsidiary that is not actively carrying on business andthat has assets of less than $10,000.

 

“Indebtedness”means (a) all indebtedness for borrowed money or the deferred purchase price ofproperty or services, including without limitation reimbursement and otherobligations with respect to surety bonds and letters of credit, (b) allobligations evidenced by notes, bonds, debentures or similar instruments, (c)all capital lease obligations, and (d) all Contingent Obligations.

 

“InsolvencyProceeding” means any proceeding commenced by or against any Person or entityunder any provision of the United States Bankruptcy Code, as amended, or underany other bankruptcy or insolvency law, including assignments for the benefitof creditors, formal or informal moratoria, compositions, extension generallywith its creditors, or proceedings seeking reorganization, arrangement, orother relief.

 

“IntellectualProperty Collateral” means all of Borrower’s right, title, and interest in andto the following:

 

### (a)                                  Copyrights,Trademarks and Patents;

###  

### (b)                                 Anyand all trade secrets, and any and all intellectual property rights in computersoftware and computer software products now or hereafter existing, created,acquired or held;

###  

### (c)                                  Anyand all design rights which may be available to Borrower now or hereafterexisting, created, acquired or held;

###  

### (d)                                 Anyand all claims for damages by way of past, present and future infringement ofany of the rights included above, with the right, but not the obligation, tosue for and collect such damages for said use or infringement of theintellectual property rights identified above;

###  

### (e)                                  Alllicenses or other rights to use any of the Copyrights, Patents or Trademarks,and all license fees and royalties arising from such use to the extentpermitted by such license or rights;

###  

### (f)                                    Allamendments, renewals and extensions of any of the Copyrights, Trademarks orPatents; and

###  

### (g)                                 Allproceeds and products of the foregoing, including without limitation allpayments under insurance or any indemnity or warranty payable in respect of anyof the foregoing.

###  

“Inventory”means all present and future inventory in which Borrower has any interest.

 

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

 

----

 

“IRC”means the Internal Revenue Code of 1986, as amended, and the regulationsthereunder.

 

 “Lien” means any mortgage, lien, deed oftrust, charge, pledge, security interest or other encumbrance.

 

 “Loan Documents” means, collectively, thisAgreement, any note or notes executed by Borrower, and any other document,instrument or agreement entered into in connection with this Agreement, all asamended or extended from time to time.

 

“MaterialAdverse Effect” means a material adverse effect on (i) the business operations,condition (financial or otherwise) or prospects of Borrower and itsSubsidiaries taken as a whole, (ii) the ability of Borrower to repay theObligations or otherwise perform its obligations under the Loan Documents,(iii) Borrower’s interest in, or the value, perfection or priority of Bank’ssecurity interest in the Collateral.

 

“MaterialLicense” means any license or other agreement of Borrower (other than licensesfor off-the-shelf software in the ordinary course of Borrower’s Business): (a)with Parent, any Subsidiary, Parent Subsidiary or any other Affiliate ofBorrower; and (b) with any non-Affiliate, that is material to Borrower’sbusiness or that gives rise to, or the absence of which would result in a lossof, more than five percent (5%) of Borrower’s gross revenues in any givenmonth, including revenue derived from the sale, licensing, rendering ordisposition of any product or service.

 

“NegotiableCollateral” means all of Borrower’s present and future letters of credit ofwhich it is a beneficiary, drafts, instruments (including promissory notes),securities, documents of title, and chattel paper, and Borrower’s Booksrelating to any of the foregoing.

 

“Obligations”means all debt, principal, interest, Bank Expenses and other amounts owed toBank by Borrower pursuant to this Agreement or any other agreement, whetherabsolute or contingent, due or to become due, now existing or hereafterarising, including any interest that accrues after the commencement of anInsolvency Proceeding and including any debt, liability, or obligation owingfrom Borrower to others that Bank may have obtained by assignment or otherwise.

 

“Parent”means RadView Software Ltd., a company formed under the laws of Israel.

 

“ParentSubsidiary” means any corporation, partnership or limited liability company,joint venture or other Person in which (i) any general partnership interest or(ii) more than 50% of the stock, limited liability company interest or jointventure of which by the terms thereof ordinary voting power to elect the Boardof Directors, managers or trustees of the entity (or similar governing body),at the time as of which any determination is being made, is owned by Parent,either directly or through an Affiliate.

 

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

 

“PeriodicPayments” means all installments or similar recurring payments that Borrowermay now or hereafter become obligated to pay to Bank pursuant to the terms andprovisions of any instrument, or agreement now or hereafter in existencebetween Borrower and Bank.

 

“PermittedIndebtedness” means:

 

### (a)                                  Indebtednessof Borrower in favor of Bank arising under this Agreement or any other LoanDocument;

 

----

 

### (b)                                 Indebtednessexisting on the Closing Date and disclosed in the Schedule;

###  

### (c)                                  Indebtednessnot to exceed $250,000 in the aggregate in any fiscal year of Borrower securedby a lien described in clause (c) of the defined term “Permitted Liens,”provided such Indebtedness does not exceed the lesser of the cost or fairmarket value of the equipment financed with such Indebtedness;

###  

### (d)                                 SubordinatedDebt;

###  

### (e)                                  Indebtednessto trade creditors incurred in the ordinary course of business;

###  

### (f)                                    Indebtednessto Parent consisting of intercompany journal entries made in connection withtransfer pricing transactions, provided that all such transactions arecashless; and

###  

### (g)                                 Extensions,refinancings and renewals of any items of Permitted Indebtedness, provided thatthe principal amount is not increased or the terms modified to impose moreburdensome terms upon Borrower or its Subsidiary, as the case may be.

###  

“PermittedInvestment” means:

 

### (a)                                  Investmentsexisting on the Closing Date disclosed in the Schedule;

###  

### (b)                                 (i)Marketable direct obligations issued or unconditionally guaranteed by theUnited States of America or any agency or any State thereof maturing within oneyear from the date of acquisition thereof, (ii) commercial paper maturing nomore than one year from the date of creation thereof and currently havingrating of at least A-2 or P-2 from either Standard & Poor’s Corporation orMoody’s Investors Service, (iii) Bank’s certificates of deposit maturing nomore than one year from the date of investment therein, and (iv) Bank’s moneymarket accounts;

###  

### (c)                                  Repurchasesof stock from former employees or directors of Borrower under the terms ofapplicable repurchase agreements (i) in an aggregate amount not to exceed$100,000 in any fiscal year, provided that no Event of Default has occurred, iscontinuing or would exist after giving effect to the repurchases, or (ii) inany amount where the consideration for the repurchase is the cancellation ofindebtedness owed by such former employees to Borrower regardless of whether anEvent of Default exists;

###  

### (d)                                 Investmentsaccepted in connection with Permitted Transfers;

###  

### (e)                                  Loansto Parent made after the Closing Date to the extent necessary to fund Parent’soperating expenses incurred in the ordinary course of business (the “ParentAdvances”), provided that no Parent Advance shall be deemed a PermittedInvestment (and such Parent Advance shall be prohibited hereunder) if, as ofthe date such advance is to be funded and after giving effect to such advance,the aggregate amount of all funded Parent Advances would exceed the sumof:  (i) the aggregate amount of cashtransfers from Parent to Borrower occurring after the Closing Date and prior tothe funding of such Parent Advance (to the extent the obligation resulting fromsuch transfer is Subordinated Debt), plus (ii) either (A) Two Hundred ThousandDollars ($200,000) if such Parent Advance is to be funded prior to December 31,2005; or (B) Nine Hundred Eighty Thousand Dollars ($980,000) if such ParentAdvance is to be funded after December 31, 2005 but prior to the firstanniversary of the Closing Date.

###  

----

### (f)                                    Investmentsin Affiliates and Subsidiaries not to exceed $10,000 in the aggregate in anyfiscal year;

###  

### (g)                                 Investmentsnot to exceed $50,000 in the aggregate in any fiscal year consisting of (i)travel advances and employee relocation loans and other employee loans andadvances in the ordinary course of business, and (ii) loans to employees,officers or directors relating to the purchase of equity securities of Borroweror its Subsidiaries pursuant to employee stock purchase plan agreementsapproved by Borrower’s Board of Directors;

###  

### (h)                                 Investments(including debt obligations) received in connection with the bankruptcy orreorganization of customers or suppliers and in settlement of delinquentobligations of, and other disputes with, customers or suppliers arising in theordinary course of Borrower’s business;

###  

### (i)                                     Investmentsconsisting of notes receivable of, or prepaid royalties and other creditextensions, to customers and suppliers who are not Affiliates, in the ordinarycourse of business, provided that this subparagraph (h) shall not apply toInvestments of Borrower in any Subsidiary; and

###  

### (j)                                     Jointventures or strategic alliances in the ordinary course of Borrower’s businessconsisting of the non-exclusive licensing of technology, the development oftechnology or the providing of technical support, provided that any cashInvestments by Borrower do not exceed $50,000 in the aggregate in any fiscalyear.

###  

“PermittedLiens” means the following:

 

### (a)                                  AnyLiens existing on the Closing Date and disclosed in the Schedule (excludingLiens to be satisfied with the proceeds of the Advances) or arising under thisAgreement or the other Loan Documents;

###  

### (b)                                 Liensfor taxes, fees, assessments or other governmental charges or levies, eithernot delinquent or being contested in good faith by appropriate proceedings andfor which Borrower maintains adequate reserves, provided the same have nopriority over any of Bank’s security interests;

###  

### (c)                                  Liensnot to exceed $250,000 in the aggregate (i) upon or in any Equipment (otherthan Equipment financed by an Equipment Advance) acquired or held by Borroweror any of its Subsidiaries to secure the purchase price of such Equipment orindebtedness incurred solely for the purpose of financing the acquisition orlease of such Equipment, or (ii) existing on such Equipment at the time of itsacquisition, provided that the Lien is confined solely to the property so acquiredand improvements thereon, and the proceeds of such Equipment;

###  

### (d)                                 Liensincurred in connection with the extension, renewal or refinancing of theindebtedness secured by Liens of the type described in clauses (a) through (e)above, provided that any extension, renewal or replacement Lien shall belimited to the property encumbered by the existing Lien and the principalamount of the indebtedness being extended, renewed or refinanced does notincrease; and

###  

### (e)                                  Liensarising from judgments, decrees or attachments in circumstances notconstituting an Event of Default under Sections 8.4 (attachment) or 8.8(judgments).

###  

“PermittedTransfer” means the conveyance, sale, lease, transfer or disposition byBorrower or any Subsidiary of:

 

----

 

### (a)                                  Inventoryin the ordinary course of business;

###  

### (b)                                 licensesand similar arrangements for the use of the property of Borrower or itsSubsidiaries in the ordinary course of business;

###  

### (c)                                  worn-outor obsolete Equipment not financed with the proceeds of Equipment Advances; or

###  

### (d)                                 otherassets of Borrower or its Subsidiaries that do not in the aggregate exceed$50,000 during any fiscal year.

###  

“Person”means any individual, sole proprietorship, partnership, limited liabilitycompany, joint venture, trust, unincorporated organization, association,corporation, institution, public benefit corporation, firm, joint stockcompany, estate, entity or governmental agency.

 

“PrimeRate” means the variable rate of interest, per annum, most recently announcedby Bank, as its “prime rate,” whether or not such announced rate is the lowestrate available from Bank.

 

 “Responsible Officer” means each of the ChiefExecutive Officer, the Chief Operating Officer, the Chief Financial Officer andthe Controller of Borrower.

 

“RevolvingLine” means a Credit Extension of up to $2,000,000.

 

“RevolvingMaturity Date” means May 24, 2006.

 

“Schedule”means the schedule of exceptions attached hereto and approved by Bank, if any.

 

“SOSReports” means the official reports from the Secretaries of State of eachCollateral State, Chief Executive Office State and the Borrower State and otherapplicable federal, state or local government offices identifying all currentsecurity interests filed in the Collateral and Liens of record as of the dateof such report.

 

“SubordinatedDebt” means any debt incurred by Borrower that is subordinated in writing tothe debt owing by Borrower to Bank on terms reasonably acceptable to Bank (andidentified as being such by Borrower and Bank).

 

“Subsidiary”means any corporation, partnership or limited liability company, joint ventureor other Person in which (i) any general partnership interest or (ii) more than50% of the stock, limited liability company interest or joint venture of whichby the terms thereof ordinary voting power to elect the Board of Directors,managers or trustees of the entity (or similar governing body), at the time asof which any determination is being made, is owned by Borrower, either directlyor through an Affiliate.

 

 “Trademarks” means any trademark and servicemarkrights, whether registered or not, applications to register and registrationsof the same and like protections, and the entire goodwill of the business ofBorrower connected with and symbolized by such trademarks.

 

----

 
| **DEBTOR**         | ** ** | **RADVIEW SOFTWARE, INC.** |
|--------------------|------------|----------------------------|
| ** **         | ** ** | ** **                 |
| **SECURED PARTY:** | ** ** | **COMERICA BANK**          |

 

EXHIBIT B

 

COLLATERALDESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT

 

Allpersonal property of Borrower (herein referred to as “Borrower” or “Debtor”)whether presently existing or hereafter created or acquired, and whereverlocated, including, but not limited to:

 

(a)          all accounts (includinghealth-care-insurance receivables), chattel paper (including tangible andelectronic chattel paper), deposit accounts, documents (including negotiabledocuments), equipment (including all accessions and additions thereto), generalintangibles (including payment intangibles and software), goods (includingfixtures), instruments (including promissory notes), inventory (including allgoods held for sale or lease or to be furnished under a contract of service,and including returns and repossessions), investment property (includingsecurities and securities entitlements), letter of credit rights, money, andall of Debtor’s books and records with respect to any of the foregoing, and thecomputers and equipment containing said books and records;

 

(b)         all common law andstatutory copyrights and copyright registrations, applications forregistration, now existing or hereafter arising, in the United States ofAmerica or in any foreign jurisdiction, obtained or to be obtained on or inconnection with any of the foregoing, or any parts thereof or any underlying orcomponent elements of any of the foregoing, together with the right tocopyright and all rights to renew or extend such copyrights and the right (butnot the obligation) of Secured Party to sue in its own name and/or in the nameof the Debtor for past, present and future infringements of copyright;

 

(c)          all trademarks, servicemarks, trade names and service names and the goodwill associated therewith,together with the right to trademark and all rights to renew or extend suchtrademarks and the right (but not the obligation) of Secured Party to sue inits own name and/or in the name of the Debtor for past, present and future infringementsof trademark;

 

(d)         all (i) patents andpatent applications filed in the United States Patent and Trademark Office orany similar office of any foreign jurisdiction, and interests under patentlicense agreements, including, without limitation, the inventions andimprovements described and claimed therein, (ii) licenses pertaining to anypatent whether Debtor is licensor or licensee, (iii) income, royalties, damages, payments, accounts andaccounts receivable now or hereafter due and/or payable under and with respectthereto, including, without limitation, damages and payments for past, presentor future infringements thereof, (iv) right (but not the obligation) to sue inthe name of Debtor and/or in the name of Secured Party for past, present andfuture infringements thereof, (v) rights corresponding thereto throughout theworld in all jurisdictions in which such patents have been issued or appliedfor, and (vi) reissues, divisions, continuations, renewals, extensions andcontinuations-in-part with respect to any of the foregoing; and

 

(e)          any and all cashproceeds and/or noncash proceeds of any of the foregoing, including, withoutlimitation, insurance proceeds, and all supporting obligations and the securitytherefor or for any right to payment.  All terms above have the meanings given tothem in the California Uniform Commercial Code, as amended or supplemented fromtime to time, including revised Division 9 of the Uniform CommercialCode-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section 35,operative July 1, 2001.

 

----

 

EXHIBIT B

 

**TECHNOLOGY& LIFE SCIENCES DIVISIONLOAN ANALYSISLOAN ADVANCE/PAYDOWN REQUEST FORM**

DEADLINE FOR NEXT DAYPROCESSING IS 3:30 P.M. Eastern TimeDEADLINE FOR WIRE TRANSFERS IS 3:30 P.M. Eastern Time

** **
| TO: Loan Analysis     |   | DATE:  |   | TIME:  |   |
|-----------------------|--------|--------|--------|--------|--------|
| FAX #: (650) 846-6840 |   |   |   |   |

 
| FROM:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | RADVIEW SOFTWARE, INC.           |                 | TELEPHONE REQUEST (For Bank Use Only):                                                                                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|----------------------|--------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Borrower’s Name             |                 |                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |                 | The following person is  authorized to request the loan payment transfer/loan advance on the  designated account and is known to me. |
| FROM:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Authorized Signer’s  Name   |                 |
| FROM:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                             |                 |                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Authorized Signature  (Borrower) |                 | Authorized Request  & Phone #                                                                                                    |
| PHONE #:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                             |                 |                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |                 | Received by (Bank)  & Phone #                                                                                                    |
| FROM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |                 |                                                                                                                                 |
| ACCOUNT#:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                             |                 |                                                                                                                                 |
| (please include Note  number, if applicable)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                             |                 |
| TO ACCOUNT #:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                             |                 | Authorized Signature  (Bank)                                                                                                         |
| (please include Note  number, if applicable)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |                 |                                                                                                                                 |
| REQUESTED TRANSACTION TYPE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | REQUESTED DOLLAR AMOUNT          | For Bank Use Only    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |                 |
| PRINCIPAL INCREASE* (ADVANCE)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $                                |                 |                                                                                                                                 | Date Rec’d: |
| PRINCIPAL PAYMENT (ONLY)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | $                                |                 |                                                                                                                                 | Time: |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             | Comp. Status:        | YES                                                                                                                                  | NO |
| OTHER INSTRUCTIONS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Status Date:                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Time:                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Approval:                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |                 |                                                                                                                                 |
| All representations and warranties of Borrower  stated in the Loan Agreement are true, correct and complete in all material  respects as of the date of the telephone request for and advance confirmed by  this Borrowing Certificate, including without limitation the representation  that Borrower has paid for and owns the equipment financed by the Bank;  provided, however, that those representations and warranties the date expressly  referring to another date shall be true, correct and complete in all material  respects as of such date. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ***IS THERE A WIRE REQUEST TIED TO  THIS LOAN ADVANCE?  (PLEASE CIRCLE ONE)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **YES**                          | **NO**               |                                                                                                                                 |
| If YES, the Outgoing  Wire Transfer Instructions must be completed below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |                 |                                                                                                                                 |
| **OUTGOING WIRE TRANSFER INSTRUCTIONS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Fed Reference Number             | Bank Transfer Number |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |                 |                                                                                                                                 |
| **The  items marked with an asterisk (*) are required to be completed.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                             |
| *Beneficiary Name                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                             |
| *Beneficiary Account Number                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                  |                      |                                                                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

 
| *Beneficiary Address           |            |
|--------------------------------|-----------------|
| Currency Type                  | US DOLLARS ONLY |
| *ABA Routing Number (9 Digits) |            |
| *Receiving Institution Name    |            |
| *Receiving Institution Address |            |
| *Wire Account                  | $               |

 

----

 

EXHIBIT C

 

BORROWING BASECERTIFICATE

 
| Borrower:  RADVIEW SOFTWARE, INC. |   | Lender: Comerica Bank |
|-----------------------------------|--------|-----------------------|
|                              |   |                  |
| Commitment Amount: $2,000,000     |   |                  |

 
| ACCOUNTS RECEIVABLE                                                                                                                             |   |   |   |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|-----------|
| 1.             Accounts  Receivable Book Value as of       |   |   | $      |      |   |
| 2.             Additions  (please explain on reverse)                               |   |   | $      |      |   |
| 3.             TOTAL  ACCOUNTS RECEIVABLE                                           |   |   | $      |      |   |
|                                                                                                                                            |   |   |   |      |
| ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)                                                                                            |   |   |   |      |
| 4.             Amounts  over 90 days due                                            | $      |   |   |      |   |
| 5.             Balance  of 25% over 90 day accounts                                 | $      |   |   |      |   |
| 6.             Concentration  Limits                                                | $      |   |   |      |   |
| 7.             Foreign  Accounts                                                    | $      |   |   |      |   |
| 8.             Governmental  Accounts                                               | $      |   |   |      |   |
| 9.             Contra  Accounts                                                     | $      |   |   |      |   |
| 10.           Demo  Accounts                                                                  | $      |   |   |      |   |
| 11.           Intercompany/Employee  Accounts                                                 | $      |   |   |      |   |
| 12.           Other  (please explain on reverse)                                              | $      |   |   |      |   |
| 13.           TOTAL  ACCOUNTS RECEIVABLE DEDUCTIONS                                           |   |   | $      |      |   |
| 14.           Eligible  Accounts (#3 minus #13)                                               |   |   | $      |      |   |
| 15.           LOAN  VALUE OF ACCOUNTS ($1,000,000 plus 75% of #14)                            |   |   | $      |      |   |
|                                                                                                                                            |   |   |   |      |
| BALANCES                                                                                                                                        |   |   |   |      |
| 16.           Maximum  Loan Amount                                                            |   |   | $      | 2,000,000 |   |
| 17.           Total  Funds Available [Lesser of #16 or #15]                                   |   |   | $      |      |   |
| 18.           Present  balance owing on Line of Credit                                        |   |   | $      |      |   |
| 19.           RESERVE  POSITION (#17 minus #18)                                               |   |   | $      |      |   |

 

*Theundersigned represents and warrants that the foregoing is true, complete andcorrect, and that the information reflected in this Borrowing Base Certificatecomplies with the representations and warranties set forth in the Loan andSecurity Agreement between the undersigned and Comerica Bank.*

 
| RADVIEW SOFTWARE, INC. |              |   |
|------------------------|-------------------|--------|
|                   |              |   |
|                   |              |   |
| By:                    |              |   |   |
|                   | Authorized Signer |   |   |

 

----

 

**EXHIBIT DCOMPLIANCE CERTIFICATE**

TO:                                                                            COMERICABANK

 

FROM:                                                         RADVIEWSOFTWARE, INC.

 

The undersignedauthorized officer of RADVIEW SOFTWARE, INC. hereby certifies that inaccordance with the terms and conditions of the Loan and Security Agreement betweenBorrower and Bank (the “Agreement”), (i) Borrower is in completecompliance for the period ending                with all required covenants except as noted below and (ii) allrepresentations and warranties of Borrower stated in the Agreement are true andcorrect as of the date hereof.  Attachedherewith are the required documents supporting the above certification.  The Officer further certifies that these areprepared in accordance with Generally Accepted Accounting Principles (GAAP) andare consistently applied from one period to the next except as explained in anaccompanying letter or footnotes.

 

**Please indicate compliance status by circlingYes/No under “Complies” column.**

 
| **Reporting Covenant**                                         | ** ** | **Required**             | ** **        | ** ** | ** ** | ** ** | ** ** | **Complies** | ** ** |
|----------------------------------------------------------------|------------|--------------------------|-------------------|------------|------------|------------|------------|--------------|------------|
|                                                           |       |                     |              |       |       |       |       |         |       |
| Quarterly financial statements (10Q)                           |       | Quarterly within 45 days |              |       |       | Yes        |       | No           |       |
| Annual (CPA Audited) (10K)                                     |       | FYE within 120 days      |              |       |       | Yes        |       | No           |       |
| A/R & A/P Agings, Borrowing Base Cert.                     |       | Monthly within 30 days   |              |       |       | Yes        |       | No           |       |
| A/R Audit                                                      |       | Initial and Semi-Annual  |              |       |       | Yes        |       | No           |       |
| IP Report                                                      |       | Quarterly within 30 days |              |       |       | Yes        |       | No           |       |
| Total amount of Borrower’s Cash                           |       | Amount:                  | $                 |       |       |       |       | Yes          |       | No |   |
| Total amount of Borrower’s Cash at Bank &  affiliates |       | Amount:                  | $                 |       |       |       |       | Yes          |       | No |   |
| Total amount of Parent’s Cash                             |       | Amount:                  | $                 |       |       |       |       | Yes          |       | No |   |
| Total amount of Parent’s Cash at Bank &  affiliates   |       | Amount:                  | $                 |       |       |       |       | Yes          |       | No |   |
| Total amount of RadView (UK) Cash                              |       | Amount:                  | $                 |       |       |       |       | Yes          |       | No |   |
| Total amount of RadView (UK) Cash at Bank &  affiliates    |       | Amount:                  | $                 |       |       |       |       | Yes          |       | No |   |
| Total amount of RadView GmbH Cash                              |       | Amount:                  | $                 |       |       |       |       | Yes          |       | No |   |
| Total amount of RadView GmbH Cash at Bank &  affiliates    |       | Amount:                  | $                 |       |       |       |       | Yes          |       | No |   |
| Projections                                                    |       | Dec. 31                  |              |       |       | Yes        |       | No           |       |
|                                                           |       |                     |              |       |       |       |       |         |       |
| **Financial Covenant**                                         | ** ** | **Required**             | ** **        | **Actual** | ** ** | ** ** | ** ** | **Complies** | ** ** |
| ** **                                                     |       |                     |              |       |       |       |       |         |       |
| Minimum Cash at Bank                                           |       | $300,000 (Closing Date)  |              | $          | ** ** |       | Yes        |         | No         |   |
|                                                           |       | $1,200,000 (thereafter)  |              |       |       |       |       |         |       |
| Maximum Net Loss                                               |       | See Section 6.7(b)       |              | $          |       |       | Yes        |         | No         |   |
|                                                           |       |                     |              |       |       |       |       |         |       |
| **Comments Regarding Exceptions:**  See Attached.              | ** ** | **BANK USE ONLY**        | ** **        | ** ** | ** ** | ** ** | ** ** | ** **   | ** ** |
|                                                           |       |                     |              |       |       |       |       |         |       |
|                                                           |       | Received by:             |              |       |
| Sincerely,                                                     |       |                     | AUTHORIZED SIGNER |       |
|                                                           |       |                     |              |       |
|                                                           |       | Date:                    |              |       |
|                                                           |       |                     |              |       |
|                                                           |       | Verified:                |              |       |
| SIGNATURE                                                      |       |                     | AUTHORIZED SIGNER |       |
|                                                           |       |                     |              |       |       |       |       |         |       |
|                                                           |       |                     | Date:             |       |       |
| TITLE                                                          |       |                     |              |       |       |
|                                                           |       |                     | Compliance Status |       |       |       | Yes        |         | No         |   |
|                                                           |       |                     |              |       |       |       |       |         |       |   |
| DATE                                                           |       |                     |              |       |       |       |       |         |       |   |
|                                                                |            |                          |                   |            |            |            |            |              |            |  |  |  |  |  |  |  |  |

 

----

 

SCHEDULE OFEXCEPTIONS

 

----

 

**Corporation Resolutions and IncumbencyCertification**

**Authority to Procure Loans**

 

I certify that I am the duly elected and qualified Secretary of RadViewSoftware, Inc., a New Jersey corporation; that the following is a true andcorrect copy of resolutions duly adopted by the Board of Directors of theCorporation in accordance with its bylaws and applicable statutes.

 

**Copy of Resolutions:**

 

Be it Resolved, That:

 

1.               Any one (1) of thefollowing                                (insert titles only) of the Corporation are/is authorized, for, on behalf of,and in the name of the Corporation to:

 

(a)          Negotiate and procureloans, letters of credit and other credit or financial accommodations fromComerica Bank (“Bank”), a Michigan banking corporation, including, withoutlimitation, that certain Loan and Security Agreement dated as of May 25, 2005,as may subsequently be amended from time to time.

 

(b)         Discount with the Bank,commercial or other business paper belonging to the Corporation made or drawnby or upon third parties, without limit as to amount;

 

(c)          Purchase, sell,exchange, assign, endorse for transfer and/or deliver certificates and/orinstruments representing stocks, bonds, evidences of Indebtedness or othersecurities owned by the Corporation, whether or not registered in the name ofthe Corporation;

 

(d)         Give security for anyliabilities of the Corporation to the Bank by grant, security interest,assignment, lien, deed of trust or mortgage upon any real or personal property,tangible or intangible of the Corporation; and

 

(e)          Execute and deliver inform and content as may be required by the Bank any and all notes, evidences ofIndebtedness, applications for letters of credit, guaranties, subordinationagreements, loan and security agreements, financing statements, assignments,liens, deeds of trust, mortgages, trust receipts and other agreements, instrumentsor documents to carry out the purposes of these Resolutions, any or all ofwhich may relate to all or to substantially all of the Corporation’s propertyand assets.

 

2.               Said Bank be and itis authorized and directed to pay the proceeds of any such loans or discountsas directed by the persons so authorized to sign, whether so payable to theorder of any of said persons in their individual capacities or not, and whethersuch proceeds are deposited to the individual credit of any of said persons or not;

 

3.               Any and allagreements, instruments and documents previously executed and acts and thingspreviously done to carry out the purposes of these Resolutions are ratified,confirmed and approved as the act or acts of the Corporation.

 

4.               These Resolutionsshall continue in force, and the Bank may consider the holders of said officesand their signatures to be and continue to be as set forth in a certified copyof these Resolutions delivered to the Bank, until notice to the contrary inwriting is duly served on the Bank (such notice to have no effect on any actionpreviously taken by the Bank in reliance on these Resolutions).

 

5.               Any person,corporation or other legal entity dealing with the Bank may rely upon acertificate signed by an officer of the Bank to effect that these Resolutionsand any agreement, instrument or document executed pursuant to them are stillin full force and effect and binding upon the Corporation.

 

6.               The Bank mayconsider the holders of the offices of the Corporation and their signatures,respectively, to be and continue to be as set forth in the Certificate of theSecretary of the Corporation until notice to the contrary in writing is dulyserved on the Bank.

 

I further certifythat the above Resolutions are in full force and effect as of the date of thisCertificate; that these Resolutions and any borrowings or financialaccommodations under these Resolutions have been properly noted in thecorporate books and records, and have not been rescinded, annulled, revoked ormodified; that neither the foregoing Resolutions nor any actions to be takenpursuant to them are or will be in contravention of any provision of thearticles of incorporation or bylaws of the Corporation or of any agreement,indenture or other instrument to which

 

----

 

the Corporation isa party or by which it is bound; and that neither the articles of incorporationnor bylaws of the Corporation nor any agreement, indenture or other instrumentto which the Corporation is a party or by which it is bound require the vote orconsent of shareholders of the Corporation to authorize any act, matter orthing described in the foregoing Resolutions.

 

I further certifythat the following named persons have been duly elected to the offices setopposite their respective names, that they continue to hold these offices atthe present time, and that the signatures which appear below are the genuine,original signatures of each respectively:

 

**(PLEASESUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)**

 

 
| **NAME (Type or Print)** | ** ** | **TITLE** | ** ** | **SIGNATURE** | ** ** |
|--------------------------|------------|-----------|------------|---------------|------------|
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |
|                     |       |      |       |          |       |

 

In WitnessWhereof, I have affixed my name as Secretary and have caused the corporate seal(where available) of said Corporation to be affixed on May 25, 2005.

 
|   |   |      |   |
|--------|--------|-----------|--------|
|   |   | Secretary |   |
|   |   |      |
|   | ***    |      |

 
| The Above Statements are Correct. |                                                                                                                          |   |
|-----------------------------------|-------------------------------------------------------------------------------------------------------------------------------|--------|
|                              | SIGNATURE OF OFFICER OR DIRECTOR OR, IF NONE. A SHAREHOLDER OTHER  THAN SECRETARY WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE. |
|                                   |                                                                                                                               |        |  |

 

Failure tocomplete the above when the Secretary is authorized to sign alone shallconstitute a certification by the Secretary that the Secretary is the soleShareholder, Director and Officer of the Corporation.

 

----

 

**COMERICA BANK**

**Member FDIC**

 

**ITEMIZATION OF AMOUNT FINANCED**

**DISBURSEMENT INSTRUCTIONS**

**(Revolver)**

 
| Name(s):  RADVIEW  SOFTWARE, INC.                                                                        Date:  May 25, 2005 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | credited to deposit  account No.                      when  Advances are requested or disbursed to Borrower by cashiers check or wire  transfer |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Amounts paid to others  on your behalf:                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | to Comerica Bank for  Facility Fee |
| $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | to Comerica Bank for  accounts receivable audit (estimate) |
| $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | to Bank counsel fees  and expenses |
| $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | to                     |
| $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | to                     |
| $2,000,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | TOTAL (AMOUNT FINANCED) |

 

Upon consummationof this transaction, this document will also serve as the authorization forComerica Bank to disburse the loan proceeds as stated above.

 

 
|      |   |      |   |
|-----------|--------|-----------|--------|
| Signature |   | Signature |

 

----

 

**AGREEMENTTO PROVIDE INSURANCE**

 

TO:         COMERICABANK                                                                             Date:  May 25, 2005

Attn:  Deni M. Snider, MC 4770

75 E. Trimble Road

SanJose, CA  95131                                                                            Borrower:  RADVIEW SOFTWARE, INC.

 

In consideration of aloan in the amount of $2,000,000, secured by all tangible personal propertyincluding inventory and equipment.

 

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

 

I/We also agree to advisethe below named agent to add Comerica Bank as lender’s loss payable on the newor existing insurance policy, and to furnish Bank at above address with a copyof said policy/endorsements and any subsequent renewal policies.

 

I/We understandthat the policy must contain:

 

1.             Fireand extended coverage in an amount sufficient to cover:

 

(a)           Theamount of the loan, OR

 

(b)           Allexisting encumbrances, whichever is greater,

 

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

 

2.                                       Lender’s“Loss Payable” Endorsement Form 438 BFU in favor of Comerica Bank, or any otherform acceptable to Bank.

** **

**INSURANCE INFORMATION**

 

Insurance Co./Agent                                                           TelephoneNo.:

 

Agent’s Address:

 
| Signature of  Obligor: |   |
|------------------------|--------|
|                   |   |
| Signature of  Obligor: |   |

 

| FOR BANK USE ONLY              |
|--------------------------------|
|                           |
| INSURANCE VERIFICATION:  Date: |   |
|                           |   |
| Person Spoken to:              |   |
|                           |
| Policy Number:                 |   |
|                           |
| Effective From:                |   | To: |   |
|                           |
| Verified by:                   |   |
|                                |  |  |  |  |  |  |  |

 

----

 
| **COMERICA BANK**                                                                                                                                                                                                                                       |                              |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|
| ** **                                                                                                                                                                                                                                              | **AUTOMATIC DEBIT AUTHORIZATION** |
| **Member FDIC**                                                                                                                                                                                                                                         | ** **                        |
| ** **                                                                                                                                                                                                                                              | ** **                        |
| ** **                                                                                                                                                                                                                                              | ** **                        |
| To:  **Comerica Bank**                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                    |
| Re:  **Loan #**                                                                                        |
|                                                                                                                                                                                                                                                    |
| You are hereby  authorized and instructed to charge account No.                           in the name of RADVIEW SOFTWARE, INC. |
| for principal, interest  and other payments due on above referenced loan as set forth below and credit  the loan referenced above.                                                                                                                      |
|                                                                                                                                                                                                                                                    |
| ý            Debit  each interest payment as it becomes due according to the terms of the Loan  and Security Agreement and any renewals or amendments thereof.                              |
|                                                                                                                                                                                                                                                    |
| ý            Debit  each principal payment as it becomes due according to the terms of the Loan  and Security Agreement and any renewals or amendments thereof.                             |
|                                                                                                                                                                                                                                                    |
| ý            Debit  each payment for Bank Expenses as it becomes due according to the terms of  the Loan and Security Agreement and any renewals or amendments thereof.                     |
|                                                                                                                                                                                                                                                    |
| This Authorization is  to remain in full force and effect until revoked in writing.                                                                                                                                                                     |
|                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                    |
| Borrower Signature                                                                                                                                                                                                                                      | Date                              |
|                                                                                                                                                                                                                                                    |                              |
|                                                                                                                                                                                                                                                    | May 25, 2005                      |
|                                                                                                                                                                                                                                                         |                                   |  |

 

----

 
| Phone: | **COMERICA BANK**        |
|--------|--------------------------|
| Fax    | **CLIENT AUTHORIZATION** |

 

**General Authorization**

 

I hereby authorizeComerica Bank to use my company name, logo, and information relating to ourbanking relationship in its marketing and advertising campaigns which isintended for Comerica Bank’s customers, prospects and shareholders.

 

Comerica Bank willforward any advertising or article including client for prior review andapproval.

 
|                  |   |
|-----------------------|--------|
| Signature             |   |
|                  |   |
|                  |   |
| Printed Name          | Title  |   |
|                  |   |
|                  |   |
| Company               |   |
|                  |   |
|                  |   |
| Mailing Address       |   |
|                  |   |
|                  |   |
| City, State, Zip Code |   |
|                  |   |
|                  |   |
| Phone Number          |   |
|                  |   |
|                  |   |
| Fax Number            |   |
|                  |   |
|                  |   |
| E-Mail                |   |
|                  |   |
|                  |   |
| Date                  |   |
|                       |        |  |

 

----

 

SecuredParty:  Comerica Bank

 

Debtor:  RADVIEW SOFTWARE, INC.

 

EXHIBIT A to UCC Financing Statement

 

COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT

 

Allpersonal property of Borrower (herein referred to as “Borrower” or “Debtor”)whether presently existing or hereafter created or acquired, and whereverlocated, including, but not limited to:

 

(a)          all accounts (includinghealth-care-insurance receivables), chattel paper (including tangible andelectronic chattel paper), deposit accounts, documents (including negotiabledocuments), equipment (including all accessions and additions thereto), generalintangibles (including payment intangibles and software), goods (includingfixtures), instruments (including promissory notes), inventory (including allgoods held for sale or lease or to be furnished under a contract of service,and including returns and repossessions), investment property (includingsecurities and securities entitlements), letter of credit rights, money, andall of Debtor’s books and records with respect to any of the foregoing, and thecomputers and equipment containing said books and records;

 

(b)         all common law andstatutory copyrights and copyright registrations, applications forregistration, now existing or hereafter arising, in the United States ofAmerica or in any foreign jurisdiction, obtained or to be obtained on or inconnection with any of the foregoing, or any parts thereof or any underlying orcomponent elements of any of the foregoing, together with the right tocopyright and all rights to renew or extend such copyrights and the right (butnot the obligation) of Secured Party to sue in its own name and/or in the nameof the Debtor for past, present and future infringements of copyright;

 

(c)          all trademarks, servicemarks, trade names and service names and the goodwill associated therewith,together with the right to trademark and all rights to renew or extend suchtrademarks and the right (but not the obligation) of Secured Party to sue inits own name and/or in the name of the Debtor for past, present and futureinfringements of trademark;

 

(d)         all (i) patents andpatent applications filed in the United States Patent and Trademark Office orany similar office of any foreign jurisdiction, and interests under patentlicense agreements, including, without limitation, the inventions andimprovements described and claimed therein, (ii) licenses pertaining to anypatent whether Debtor is licensor or licensee, (iii) income, royalties, damages, payments, accounts and accountsreceivable now or hereafter due and/or payable under and with respect thereto,including, without limitation, damages and payments for past, present or futureinfringements thereof, (iv) right (but not the obligation) to sue in the nameof Debtor and/or in the name of Secured Party for past, present and futureinfringements thereof, (v) rights corresponding thereto throughout the world inall jurisdictions in which such patents have been issued or applied for, and(vi) reissues, divisions, continuations, renewals, extensions andcontinuations-in-part with respect to any of the foregoing; and

 

(e)          any and all cashproceeds and/or noncash proceeds of any of the foregoing, including, withoutlimitation, insurance proceeds, and all supporting obligations and the securitytherefor or for any right to payment. All terms above have the meanings given to them in the CaliforniaUniform Commercial Code, as amended or supplemented from time to time,including revised Division 9 of the Uniform Commercial Code-SecuredTransactions, added by Stats. 1999, c.991 (S.B. 45), Section 35, operative July1, 2001.

 

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