Exhibit 10.35

LOAN AND SECURITY AGREEMENT        DATED AS OF OCTOBER 24, 2002        AMONG        SUN MICROSYSTEMS, INC.        AS LENDER        AND    
DOT HILL SYSTEMS CORP.        AND        DOT HILL SYSTEMS B.V.,        AS BORROWER

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INDEX OF EXHIBITS AND SCHEDULES

|Schedule A |  |  |  | Definitions                                 
|---------- |  | - |  | --------------------------------------------
|Schedule B |  |  |  | Lender's and Borrower' Addresses for Notices
|Schedule C |  |  |  | Schedule of Documents                       

|Disclosure Schedule(3.2)  |  |  |  | Places of Business; Corporate Names
|------------------------- |  | - |  | -----------------------------------
|Disclosure Schedule(3.6)  |  |  |  | Real Estate                        
|Disclosure Schedule(3.7)  |  |  |  | Indebtedness                       
|Disclosure Schedule(3.10) |  |  |  | Taxes                              
|Disclosure Schedule(3.12) |  |  |  | ERISA                              
|Disclosure Schedule(3.13) |  |  |  | Litigation                         
|Disclosure Schedule(3.14) |  |  |  | Intellectual Property              
|Disclosure Schedule(3.16) |  |  |  | Environmental Matters              
|Disclosure Schedule(3.17) |  |  |  | Insurance                          
|Disclosure Schedule(4.2)  |  |  |  | Liens                              

|Exhibit A |  |  |  | Form of Promissory Note              
|--------- |  | - |  | -------------------------------------
|Exhibit B |  |  |  | Form of Certificate of Compliance    
|Exhibit C |  |  |  | Form of Landlord's Waiver and Consent
|Exhibit D |  |  |  | Form of U.C.C. Schedule              

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LOAN AND SECURITY AGREEMENT

This LOAN AND SECURITY AGREEMENT is dated as of October 24, 2002, and agreed to by and among DOT HILL SYSTEMS CORPORATION, a Delaware corporation ("Dot
Hill"), its wholly-owned subsidiary, DOT HILL SYSTEMS B.V., a Netherlands corporation ("Dot Hill BV") (Dot Hill and Dot Hill BV are sometimes hereinafter individually and sometimes collectively
referred to herein as "Borrower"), and SUN MICROSYSTEMS, INC., a Delaware corporation ("Sun") (Sun being sometimes hereinafter referred to herein as "Lender" and sometimes as "Sun").

RECITALS

A.    Pursuant
to a certain Products Purchase Agreement No. AR-63645 dated May 24, 2002, and the exhibits and the other documents referenced therein and
executed by one or more of the Persons comprising Borrower and one or more of the Persons comprising Lender (including without limitation any Product Supplement/Award Letter sometimes collectively
referred to herein as the "PPA"), Sun has agreed to purchase and Borrower has agreed to design and sell to Sun for resale by Sun various network storage system and related products (collectively, the
"Products") to Lender pursuant to purchase orders issued by Sun to Borrower from time to time (each, a "Purchase Order"). Because of the length of time it takes Borrower to develop Products and for
other business reasons, Borrower has requested Sun to provide financing from time to time to Borrower to enable Borrower and its Affiliates to pay for the cost of designing and fulfilling each
Purchase Order issued by Sun pursuant to the PPA. Sun has agreed to provide such Purchase Order financing, in its sole discretion, upon the terms and conditions set forth herein.

B.    Each
of the Products contains certain "Controller Components" (as defined in the OEM Agreement) that are manufactured and supplied by Infortrend Technology, Inc.,
a Taiwan corporation ("Infortrend") to Dot Hill pursuant to a certain OEM agreement dated May 20, 2002 between Infortrend and Dot Hill (the "Infortrend OEM Agreement").

C.    Sun,
Infortrend and Dot Hill have also entered into a certain separate Manufacturing Rights Agreement dated May 24, 2002 (the "Infortrend Manufacturing Rights
Agreement") to provide Dot Hill and Sun, upon the occurrence of certain conditions, with rights to, among other things, manufacture the Controller Components.

D.    Pursuant
to and in connection with the PPA, Sun Microsystems and Dot Hill also executed a certain Manufacturing Rights Agreement No. AR-63762 dated
May 24, 2002 (the "Manufacturing Rights Agreement"), which accords to Sun under the circumstances described therein, manufacturing and other rights to the Products and to use certain
Intellectual Property Rights, Dot Hill Technical Information and Technology (as such initially capitalized terms are defined therein) and certain other property and rights belonging to Borrower.

E.    In
connection with the agreements described in the foregoing Recitals, Sun, Dot Hill, Infortrend, and DSI Technology Escrow Services ("Escrowee") executed and delivered a
certain Escrow Agreement dated as of May 24, 2002 (the "Escrow Agreement"), pursuant to which (i) Infortrend agreed to make available to Dot Hill and to Sun, respectively, the
"Infortrend Escrow Materials" (as defined therein), and (ii) Dot Hill agreed to make available to Sun the "Dot Hill Escrow Materials" (as defined therein).

F.    Unless
defined elsewhere in this Agreement, initially capitalized terms used herein shall have the meanings assigned to them in Schedule Aand, for purposes of this Agreement and the other Loan Documents,
the rules of construction set forth in Schedule Ashall govern. All Schedules, Attachments, Addenda and Exhibits (collectively, "Appendices") hereto, or expressly identified to this
Agreement, are incorporated herein by reference, and taken together with this Agreement, constitute but a single agreement.

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AGREEMENT

NOW, THEREFORE, in consideration of the Recitals, which the parties to intend to incorporate into this Agreement by reference, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.    AMOUNT
AND TERMS OF CREDIT



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2.    CONDITIONS
PRECEDENT



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3.    REPRESENTATIONS,
WARRANTIES AND AFFIRMATIVE COVENANTS

To
induce Lender to enter into this Agreement and to make the Loans, Borrower represents and warrants to Lender (each of which representations and warranties shall survive the execution
and delivery of this Agreement), and promises to and agrees with Lender, that except as provided in the Disclosure Schedules attached or to be attached hereto, until the Termination Date as follows:



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4.    FINANCIAL
MATTERS; REPORTS



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5.    NEGATIVE
COVENANTS

Borrower
covenants and agrees that, without Lender's prior written consent, from the date hereof until the Termination Date, Borrower shall not, directly or indirectly, by operation of
law or otherwise:



6.    SECURITY
INTEREST



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7.    EVENTS
OF DEFAULT: RIGHTS AND REMEDIES



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8.    SUCCESSORS
AND ASSIGNS

Each
Loan Document shall be binding on and shall inure to the benefit of Borrower, Lender, and their respective successors and assigns, except as otherwise provided herein or therein.
Borrower may not assign, transfer, hypothecate, delegate or otherwise convey its rights, benefits, obligations or duties under any Loan Document without the prior express written consent of Lender.
Any such purported conveyance by Borrower without the prior express written consent of Lender shall be void. There shall be no third party beneficiaries of any of the terms and provisions of any of
the Loan Documents. Lender reserves the right at any time to create and sell participations in the Loans and the Loan Documents and to sell, transfer or assign any or all of its rights in the Loans
and under the Loan Documents.

9.    GUARANTOR
WAIVERS BY BORROWER

IF
AND TO THE EXTENT THAT ANY OBLIGATION OF BORROWER TO LENDER SHALL BE CONSIDERED AN OBLIGATION OF GUARANTY OR SURETYSHIP, THEN THE FOLLOWING PROVISIONS OF THIS SECTION 9 SHALL APPLY
WITH RESPECT TO BORROWER SOLELY TO THE EXTENT THAT BORROWER IS DEEMED TO ACT IN THE CAPACITY OF A GUARANTOR AND SHALL NOT EFFECT A WAIVER OF RIGHTS IN SUCH PERSON'S CAPACITY AS A BORROWER:



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10.  MISCELLANEOUS



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11.  CROSS-GUARANTY



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IN
WITNESS WHEREOF, this Loan and Security Agreement has been duly texecuted as of the date first written above.

| |  | "Borrower"                  
| |  | ----------------------------
| |  | DOT HILL SYSTEMS CORPORATION
| |  | By:                         
| |  |                             
| |  | Name:                       
| |  |                             
| |  | Title:                      
| |  |                             
| |  | DOT HILL SYSTEMS B.V.       
| |  | By:                         
| |  |                             
| |  | Name:                       
| |  |                             
| |  | Title:                      
| |  |                             
| |  | "Lender"                    
| |  | SUN MICROSYSTEMS, INC.      
| |  | By:                         
| |  |                             
| |  | Name:                       
| |  |                             
| |  | Title:                      
| |  |                             

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SCHEDULE ADEFINITIONS

Initially capitalized terms used in this Agreement and the other Loan Documents shall have (unless otherwise provided elsewhere in this Agreement or in the other
Loan Documents) the following respective meanings:

"Account
Debtor" shall mean any Person who is or may become obligated with respect to, or on account of, an Account.

"Accounts"
shall mean all "accounts," as such term is defined in the Code, now or hereafter owned or acquired by the Borrower or in which the Borrower now or hereafter has or acquires
any right or interest, and, in any event, shall also include, without limitation, all accounts receivable, contract rights, book debts, notes, drafts, trust distributions, and other obligations or
indebtedness owing to the Borrower arising from the sale, lease or exchange of goods or other property by it or property to be sold, leased or exchanged, or the performance of services by it, or to be
performed (including, without limitation, any such obligation which might be characterized as an account, contract right or general intangible under the Uniform Commercial Code in effect in any
jurisdiction) and all of the Borrower's rights in, to and under all purchase orders for goods, services or other property, and all of the Borrower's rights to any goods, services or other property
represented by any of the foregoing (including returned or repossessed goods and unpaid sellers' rights of rescission, replevin, reclamation and rights to stoppage in transit) and all monies due to or
to become due to the Borrower under all contracts for the sale, lease or exchange of goods or other property or the performance of services by it (whether or not yet earned by performance on the part
of the Borrower), in each case whether now in existence or hereafter arising or acquired, including, without limitation, the right to receive the proceeds of said purchase orders and contracts and all
collateral security and guarantees of any kind given by any Person with respect to any of the foregoing.

"Affiliate"
shall mean, with respect to any Person: (i) each other Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other
fiduciary, five percent (5%) or more of the Stock having ordinary voting power for the election of directors of such Person; (ii) each other Person that controls, is controlled by or is under
common control with such Person or any Affiliate of such Person; or (iii) each of such Person's officers, directors, joint venturers and partners. For the purpose of this definition, "control"
of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by
contract or otherwise.

"Agreement"
shall mean this Agreement including all appendices, exhibits or schedules attached or otherwise identified thereto, restatements and modifications and supplements thereto,
and any appendices, exhibits or schedules to any of the foregoing, each as in effect at the time such reference becomes operative; provided, that except as specifically set forth in this Agreement,
any reference to theDisclosure Schedulesto this Agreement shall be deemed a reference to theDisclosure
Schedulesas in effect on the date hereof or in a written amendment thereto executed by Borrower and Lender.

"Books
and Records" shall mean all books, records, board minutes, contracts, licenses, insurance policies, environmental audits, business plans, files, computer files, computer discs and
other data and software storage and media devices, accounting books and records, financial statements (actual and pro forma), filings with Governmental Authorities and any and all records and
instruments relating to the Collateral or Borrower's business.

"Borrower"
shall have the meanings assigned to it in the preamble of this Agreement.

"Business
Day" shall mean any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of California.

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"Change
of Control" shall mean, (a) with respect to any Person on or after the date hereof, that any change in the composition of such Person's stockholders as of the date hereof
shall occur which would result in any stockholder or group acquiring 49.9% or more of any class of Stock of such Person, or that any Person (or group of Persons acting in concert) shall otherwise
acquire, directly or indirectly (including through Affiliates), the power to elect a majority of the Board of Directors of such Person or otherwise direct the management or affairs of such Person by
obtaining proxies, entering into voting agreements or trusts, acquiring securities or otherwise.

"Charges"
shall mean all Federal, state, county, city, municipal, local, foreign or other governmental taxes (including taxes owed to PBGC at the time due and payable), levies, customs
or other duties, assessments, charges, liens, and all additional charges, interest, penalties, expenses, claims or encumbrances upon or relating to (i) the Collateral, (ii) the
Obligations, (iii) the employees, payroll, income or gross receipts of Borrower, (iv) the ownership or use of any assets by Borrower, or (v) any other aspect of Borrower's
business.

"Chattel
Paper" shall mean all "chattel paper," as such term is defined in the Code, now owned or hereafter acquired by any Person, wherever located.

"Code"
shall mean the Uniform Commercial Code as the same may, from time to time, be in effect in the State of California; provided, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of Lender's Lien in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of California, the term "Code" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions of this Agreement relating to such attachment,
perfection or priority and for purposes of definitions related to such provisions.

"Collateral"
shall have the meaning assigned to it in Section 6.1.

"Contracts"
shall mean all the contracts, undertakings, or agreements (other than rights evidenced by Chattel Paper, Documents or Instruments) in or under which any Person may now or
hereafter have any right, title or interest, including any agreement relating to the terms of payment or the terms of performance of any Account.

"Contractual
Obligation" shall mean as to any Person, any provision of any security issued by such Person or of any agreement, instrument, or other undertaking to which such Person is a
party or by which it or any of its property is bound. As used herein, the term "Contractual Obligation" shall be deemed to include each of the Manufacturing Agreements to which Dot Hill is a party.

"Copyright
License" shall mean rights under any written agreement now owned or hereafter acquired by any Person granting the right to use any Copyright or Copyright registration.

"Copyrights"
shall mean all of the following now owned or hereafter acquired by any Person: (i) all copyrights in any original work of authorship fixed in any tangible medium of
expression, now known or later developed, all registrations and applications for registration of any such copyrights in the United States or any other country, including registrations, recordings and
applications, and supplemental registrations, recordings, and applications in the United States Copyright Office; and (ii) all Proceeds of the foregoing, including license royalties and
proceeds of infringement suits, the right to sue for past, present and future infringements, all rights corresponding thereto throughout the world and all renewals and extensions thereof.

"Default"
shall mean any Event of Default or any event which, with the passage of time or notice or both, would, unless cured or waived, become an Event of Default.

"Documents"
shall mean all "documents," as such term is defined in the Code, now owned or hereafter acquired by any Person, wherever located, including all bills of lading, dock
warrants, dock receipts, warehouse receipts, and other documents of title, whether negotiable or non-negotiable.

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"Environmental
Laws" shall mean all Federal, state and local laws, statutes, ordinances and regulations, now or hereafter in effect, and in each case as amended or supplemented from time
to time, and any applicable judicial or administrative interpretation thereof relating to the regulation and protection of human health, safety, the environment and natural resources (including
ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation).

"Environmental
Liabilities" shall mean all liabilities, obligations, responsibilities, remedial actions, removal costs, losses, damages of whatever nature, costs and expenses (including
all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result
of any claim, suit, action or demand of whatever nature by any Person and which relate to any health or safety condition regulated under any Environmental Law, environmental permits or in connection
with any Release, threatened Release, or the presence of a Hazardous Material.

"Equipment"
shall mean all "equipment" as such term is defined in the Code, now owned or hereafter acquired by any Person, wherever located, including any and all machinery, apparatus,
equipment, fittings, furniture, fixtures, motor vehicles and other tangible personal property (other than Inventory) of every kind and description which may be now or hereafter used in such Person's
operations or which are owned by such Person or in which such Person may have an interest, and all parts, accessories and accessions thereto and substitutions and replacements therefor.

"ERISA"
shall mean the Employee Retirement Income Security Act of 1974 (or any successor legislation thereto), as amended from time to time, and any regulations promulgated thereunder.

"ERISA
Affiliate" shall mean any trade or business (whether or not incorporated) that, together with Borrower, is treated as a single employer under Section 414(b), (c),
(m) or (o) of the IRC, or, solely for the purposes of Section 302 of ERISA and Section 412 of the IRC, is treated as a single employer under Section 414 of the IRC.

"ERISA
Event" shall mean (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event
for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the IRC or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(b) of the IRC or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan; (f) the incurrence by Borrower or any ERISA Affiliate of any liability with respect to any
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from Borrower
or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within
the meaning of Title IV of ERISA.

"Event
of Default" shall have the meaning assigned to it in Section 7.1.

"Financial
Statements" shall mean the financial statements filed by Borrower with the Securities Exchange Commission from time to time.

"Fiscal
Month" shall mean any of the monthly accounting periods of Borrower.

"Fiscal
Quarter" shall mean any of the quarterly accounting periods of Borrower.

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"Fiscal
Year" shall mean the 12 month period of Borrower ending December 31 of each year. Subsequent changes of the fiscal year of Borrower shall not change the term
"Fiscal Year" unless Lender shall consent in writing to such change.

"GAAP"
shall mean generally accepted accounting principles in the United States of America as in effect from time to time, consistently applied.

"General
Intangibles" shall mean all "general intangibles," as such term is defined in the Code, now owned or hereafter acquired by any Person, including all right, title and interest
which such Person may now or hereafter have in or under any Contract, Intellectual Property, interests in partnerships, joint ventures and other business associations, permits, proprietary or
confidential information, inventions (whether or not patented or patentable), technical information, procedures, designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials, Books and Records, Goodwill (including the Goodwill associated with any Intellectual Property), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss, and casualty, whether covering personal property, real property, tangible rights or intangible rights, all liability, life, key-person, and
business interruption insurance, and all unearned premiums), uncertificated securities, choses in action, deposit accounts, rights to receive tax refunds and other payments and rights of
indemnification.

"Goods"
shall mean all "goods," as such term is defined in the Code, now owned or hereafter acquired by any Person, wherever located, including movables, fixtures, equipment, inventory,
or other tangible personal property.

"Goodwill"
shall mean all goodwill, trade secrets, proprietary or confidential information, technical information, procedures, formulae, quality control standards, designs, operating and
training manuals, customer lists, and distribution agreements now owned or hereafter acquired by any Person.

"Governmental
Authority" shall mean any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to government.

"Guaranteed
Indebtedness" shall mean, as to any Person, any obligation of such Person guaranteeing any indebtedness, lease, dividend, or other obligation ("primary obligations") of any
other Person (the "primary obligor") in any manner, including any obligation or arrangement of such guaranteeing Person (whether or not contingent): (i) to purchase or repurchase any such
primary obligation; (ii) to advance or supply funds (a) for the purchase or payment of any such primary obligation or (b) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the primary obligor; (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation; or (iv) to indemnify the owner of such primary
obligation against loss in respect thereof.

"Guarantor"
shall mean each Person which executes a guaranty or a support, put or other similar agreement in favor of Lender in connection with the transactions contemplated by this
Agreement.

"Guaranty"
shall mean any agreement to perform all or any portion of the Obligations on behalf of Borrower or any other Credit Party, in favor of, and in form and substance satisfactory
to, Lender, together with all amendments, modifications and supplements thereto, and shall refer to such Guaranty as the same may be in effect at the time such reference becomes operative.

"Hazardous
Material" shall mean any substance, material or waste which is regulated by or forms the basis of liability now or hereafter under, any Environmental Laws, including any
material or substance which is (a) defined as a "solid waste," "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant,"

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"hazardous constituent," "special waste," "toxic substance" or other similar term or phrase under any Environmental Laws, (b) petroleum or any fraction or by-product thereof,
asbestos, polychlorinated biphenyls (PCB's), or any radioactive substance.

"Hazardous
Waste" shall have the meaning ascribed to such term in the Resource Conservation and Recovery Act (42 U.S.C. 6901 et. seq.).

"Indebtedness"
of any Person shall mean: (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (including reimbursement
and all other obligations with respect to surety bonds, letters of credit and bankers' acceptances, whether or not matured, but not including obligations to trade creditors incurred in the ordinary
course of business and not more than 45 days past due); (ii) all obligations evidenced by notes, bonds, debentures or similar instruments; (iii) all indebtedness created or
arising under any conditional sale or other title retention agreements with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such property); (iv) all capital lease obligations; (v) all Guaranteed Indebtedness; (vi) all Indebtedness
referred to in clauses (i), (ii), (iii), (iv) or (v) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; (vii) the
Obligations; and (viii) all liabilities under Title IV of ERISA.

"Indemnified
Liabilities" and "Indemnified Person" shall have the meaning assigned to such terms in Section 1.11.

"Instruments"
shall mean all "instruments," as such term is defined in the Code, now owned or hereafter acquired by any Person, wherever located, including all certificated securities
and all notes and other evidences of indebtedness, other than instruments that constitute, or are a part of a group of writings that constitute, Chattel Paper.

"Intellectual
Property" shall mean any and all Licenses, Patents, Copyrights, Trademarks, trade secrets and customer lists. As used herein, the term "Intellectual Property" shall include
(a) all of the "Intellectual Property" as defined in the Escrow Agreement deposited by Dot Hill with the Escrowee thereunder, and the "Intellectual Property" described in that certain
Intellectual Property Security Agreement dated as of the date hereof executed by Borrower in favor of Lender, and (b) all systems software and applications software, including, but not limited
to, screen displays and formats, program structures, sequence and organization, all documentation for such software, including, but not limited to, user manuals libraries, maintenance manuals
libraries, products documents libraries,, engineer's change orders, histories of bugs and patches, flowcharts, programmer's notes, functional specifications, and operations manuals, all formulas,
processes, ideas and know-how embodied in any of the foregoing, and all program materials, flowcharts, notes and outlines created in connection with any of the foregoing, whether or not
patentable or copyrightable, (b) concepts, discoveries, improvements and ideas, (c) any useful information relating to the items described in clause (a) or (b), including
know-how, technology, engineering drawings, reports, design information, trade secrets, practices, laboratory
notebooks, specifications, test procedures, maintenance manuals, research, development, manufacturing, marketing, merchandising, selling, purchasing and accounting, (d) Patents, patent rights
and patent applications, Copyrights and copyright applications, Trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights, applications for registration of
trademarks, trade names and service marks, and trademark, trade name and service mark registrations and patent licenses, trademark licenses and copyright licenses, and (e) other licenses to use
any of the items described in the foregoingclauses (a), (b), (c)and(d)or any other
similar items of the Borrower necessary for the conduct of its business.

"Interest
Rate" shall have the meaning assigned to it in Section 1.5(a).

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"Inventory"
shall mean all "inventory," as such term is defined in the Code, now or hereafter owned or acquired by any Person, wherever located, including all inventory, merchandise,
goods and other personal property which are held by or on behalf of such Person for sale or lease or are furnished or are to be furnished under a contract of service or which constitute raw materials,
work in process or materials used or consumed or to be used or consumed in such Person's business or in the processing, production, packaging, promotion, delivery or shipping of the same, including
other supplies.

"Investment
Property" shall mean all "investment property," as such term is defined in the Code, now or hereafter acquired by an Person, wherever located.

"IRC"
and "IRS" shall mean respectively, the Internal Revenue Code of 1986 and the Internal Revenue Service, and any successor thereto.

"Lender"
shall mean Sun Microsystems, Inc. or any Affiliate of Sun Microsystems, Inc., and, if at any time Lender shall decide to assign or syndicate all or any of the
Obligations, such term shall include such assignee or such other members of the syndicate.

"License"
shall mean any Copyright License, Patent License, Trademark License or other license of rights or interests now held or hereafter acquired by any Person.

"Lien"
shall mean any mortgage, security deed or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, security title, easement
or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease
having substantially
the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the Code or comparable law of any jurisdiction).

"Litigation"
shall mean any claim, lawsuit, litigation, investigation or proceeding of or before any arbitrator or Governmental Authority.

"Loan
Documents" shall mean this Agreement, the Notes, the Intellectual Property Security Agreement, the Power of Attorney, and the other documents and instruments listed in
Schedule C, and all security agreements, mortgages and all other documents, instruments, certificates, and notices at any time delivered by any Person (other than Lender) in connection with any
of the foregoing.

"Loan"
shall have the meaning assigned to it in Section 1.1(a).

"Material
Adverse Effect" shall mean: a material adverse effect on (a) the business, assets, operations, prospects or financial or other condition of Borrower or the industry
within which Borrower operates, (b) Borrower's or any other Credit Party's ability to pay or perform the Obligations under the Loan Documents to which Borrower is a party in accordance with the
terms thereof, (c) the Collateral or Lender's Liens on the Collateral or the priority of any such Lien, or (d) Lender's rights and remedies under this Agreement and the other Loan
Documents.

"Minimum
Actionable Amount" shall mean $50,000.

"Multiemployer
Plan" shall mean a "multiemployer plan," as defined in Section 4001(a) (3) of ERISA, to which Borrower or any ERISA Affiliate is making, is obligated to
make, has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them.

"Notes"
shall mean each Note evidencing a Loan.

"Notice
of Loan" shall have the meaning assigned to it in Section 1.1(b).

"Obligations"
shall mean all loans, advances, debts, expense reimbursement, fees, liabilities, and obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or contingent, or amounts are liquidated or

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determinable) owing by Borrower to Lender, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, whether arising under any of the Loan
Documents or under any other agreement between Borrower and Lender, and all covenants and duties regarding such amounts. This term includes all principal, interest (including interest accruing at the
then applicable rate provided in this Agreement after the maturity of the Loans and interest accruing at the then applicable rate provided in this Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such
proceeding), fees, Charges, expenses, attorneys' fees and any other sum chargeable to Borrower under any of the Loan Documents, and all principal and interest due in respect of the Loans and all
obligations and liabilities of any Guarantor under any Guaranty.

"Patent
License" shall mean rights under any written agreement now owned or hereafter acquired by any Person granting any right with respect to any invention on which a Patent is in
existence.

"Patents"
shall mean all of the following in which any Person now holds or hereafter acquires any interest: (i) all letters patent of the United States or any other country, all
registrations and recordings thereof, and all applications for letters patent of the United States or any other country, including registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United States, any State or Territory thereof, or any other country; and (ii) all reissues, continuations,
continuations-in-part or extensions thereof.

"PBGC"
shall mean the Pension Benefit Guaranty Corporation or any successor thereto.

"Permitted
Encumbrances" shall mean the following encumbrances: (i) Liens for taxes or assessments or other governmental Charges or levies, either not yet due and payable or to
the extent that nonpayment thereof is permitted by the terms of Section 3.10; (ii) pledges or deposits securing obligations under worker's compensation, unemployment insurance, social
security or public liability laws or similar legislation; (iii) pledges or deposits securing bids, tenders, contracts (other than contracts for the payment of money) or leases to which Borrower
is a party as lessee made in the ordinary course of business; (iv) deposits securing public or statutory obligations of Borrower; (v) inchoate and unperfected workers', mechanics' or
similar liens arising in the ordinary course of business so long as such Liens attach only to Equipment, fixtures or real estate; (vi) carriers', warehousemen's, suppliers' or other similar
possessory liens arising in the ordinary course of business and securing indebtedness not yet due and payable in an outstanding aggregate amount not in excess of $25,000 at any time so long as such
Liens attach only to Inventory; (vii) deposits of money securing, or in lieu of, surety, appeal or customs bonds in proceedings to which Borrower is a party; and (viii) Liens in
existence on the date hereof as disclosed onDisclosure Schedule 4.2.

"Person"
shall mean any individual, sole proprietorship, partnership, limited liability partnership, joint venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or
department thereof), and shall include such Person's successors and assigns.

"Plan"
shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the IRC or
Section 302 of ERISA, and in respect of which Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.

"Proceeds"
shall mean "proceeds," as such term is defined in the Code and, in any event, shall include: (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to Borrower from time to time with respect to any Collateral; (ii) any and all payments (in any form whatsoever) made or due and payable to Borrower from time to time in connection with
any requisition,

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confiscation, condemnation, seizure or forfeiture of any Collateral by any governmental body, authority, bureau or agency (or any person acting under color of Governmental Authority);
(iii) any claim of Borrower against third parties (a) for past, present or future infringement of any Intellectual Property or (b) for past, present or future infringement or
dilution of any Trademark or Trademark License or for injury to the goodwill associated with any Trademark, Trademark registration or Trademark licensed under any Trademark License; (iv) any
recoveries by Borrower against third parties with respect to any litigation or dispute concerning any Collateral; and (v) any and all other amounts from time to time paid or payable under or in
connection with any Collateral, upon disposition or otherwise.

"Projections"
shall mean as of any date the consolidated and consolidating balance sheet, statements of income and cash flow for Borrower and its Subsidiaries (including forecasted
Capital Expenditures and Net Borrowing Availability) (i) by month for the next Fiscal Year, and (ii) by year for the following three Fiscal Years, in each case prepared in a manner
consistent with GAAP and accompanied by senior management's discussion and analysis of such plan.

"Purchase
Money Indebtedness" shall mean (i) any Indebtedness incurred for the payment of all or any part of the purchase price of any fixed asset, (ii) any Indebtedness
incurred for the sole purpose of financing or refinancing all or any part of the purchase price of any fixed asset, and (iii) any renewals, extensions or refinancings thereof (but not any
increases in the principal amounts thereof outstanding at that time).

"Purchase
Money Lien" shall mean any Lien upon any fixed assets which secures the Purchase Money Indebtedness related thereto but only if such Lien shall at all times be confined solely
to the asset the purchase price of which was financed or refinanced through the incurrence of the Purchase Money Indebtedness secured by such Lien and only if such Lien secures only such Purchase
Money Indebtedness.

"Real
Property" shall have the meaning assigned to it in Section 3.15.

"Release"
shall mean, as to any Person, any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Materials in the indoor or outdoor environment by such Person, including the movement of Hazardous Materials through or in the air, soil, surface water, ground water or property.

"Requirement
of Law" shall mean as to any Person, the Certificate or Articles of Incorporation and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case binding upon such Person or any of its property or to which such Person
or any of its property is subject.

"Restricted
Payment" shall mean: (i) the declaration or payment of any dividend or the incurrence of any liability to make any other payment or distribution of cash or other
property or assets on or in respect of Borrower's Stock; (ii) any payment or distribution made in respect of any subordinated Indebtedness of Borrower in violation of any subordination or other
agreement made in favor of Lender; (iii) any payment on account of the purchase, redemption, defeasance or other retirement of Borrower's Stock or Indebtedness or any other payment or
distribution made in respect of any thereof, either directly or indirectly; other than (a) that arising under this Agreement or (b) the payment of interest and principal, when due
without acceleration or modification of the amortization as in effect on the date hereof, under Indebtedness (not including subordinated Indebtedness, payments of which shall be permitted only in
accordance with the terms of the relevant subordination agreement made in favor of Lender) described inDisclosure Schedule 3.7, or otherwise
permitted under Section 5(b)(vi); or (iv) any bonus payment or other form of compensation to an employee, Stockholder, or Affiliate of Borrower, except as specifically permitted herein;
(v) any payment, loan, contribution, or other transfer of funds or other property to any Stockholder or Affiliate of such Person which is not expressly and

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specifically permitted in this Agreement; provided, that no payment to Lender shall constitute a Restricted Payment. Neither of the following shall constitute a Restricted Payment: (i) the
granting of Stock bonuses and options to employees (including officers) of Borrower, and (ii) the declaration, but not the payment of cash bonuses to officers of Borrower, so long as such cash
bonuses are not paid in whole or in part for so long as this Agreement remains in effect, and (iii) the payment to Wells Fargo Bank of principal and interest payments in accordance with the
agreements between Borrower and Wells Fargo Bank described inDisclosure Schedule 3.7(the "Wells Fargo Agreements"); provided, that in no event
shall Wells Fargo Bank obtain a Lien on the assets of Borrower other than a certain collateral securities account described inDisclosure
Schedule 3.7.

"Stated
Expiry Date" shall mean June 30, 2003; provided that, in Lender's sole discretion, the Stated Expiry Date may be extended for one or more additional six month terms but
only if Lender agrees to such extensions in writing prior to the then Stated Maturity Date. The foregoing notwithstanding, the Sated Expiry Date shall not be extended if, as of the then current Stated
Expiry Date, a Default shall have occurred and is continuing. Nothing contained herein shall be deemed to be a commitment by Lender to extend the Stated Expiry Date at any time in effect.

"Stock"
shall mean all certificated and uncertificated shares, options, warrants, membership interests, general or limited partnership interests, participation or other equivalents
(regardless of how designated) of or in a corporation, partnership, company, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock, or any
other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934).

"Stockholder"
shall mean each holder of Stock of Borrower.

"Subsidiary"
shall mean, with respect to any Person, (i) any corporation of which an aggregate of more than 50% of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, Stock of any other class or classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person and/or one or more Subsidiaries of such Person, or with respect to which any such
Person has the right to vote or designate the vote of 50% or more of such Stock whether by proxy, agreement, operation of law or otherwise, and (ii) any partnership or limited liability company
in which such Person or one or more Subsidiaries of such Person has an equity interest (whether in the form of voting or participation in profits or capital contribution) of more than 50% or of which
any such Person is a general partner or manager or may exercise the powers of a general partner or manager.

"Taxes"
shall mean taxes, levies, imposts, deductions, Charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on or measured by the net income of
Lender.

"Termination
Date" shall mean the earliest of (i) the Stated Expiry Date, (ii) the date Lender's obligation to advance funds is terminated pursuant to Section 7.2,
and (iii) the date of indefeasible prepayment in full by Borrower of the Obligations in accordance with the provisions of Section 1.2(c).

"Trademark
License" shall mean rights under any written agreement now owned or hereafter acquired by any Person granting any right to use any Trademark or Trademark registration.

"Trademarks"
shall mean all of the following now owned or hereafter acquired by any Person: (i) all trademarks, trade names, corporate names, business names, trade styles, service
marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any State or Territory thereof, or any other country or any political subdivision thereof, and (ii) all reissues,
extensions or renewals thereof.

"Withdrawal
Liability" shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.

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Any
accounting term used in this Agreement or the other Loan Documents shall have, unless otherwise specifically provided therein, the meaning customarily given such term in accordance
with GAAP, and all financial computations thereunder shall be computed, unless otherwise specifically provided therein, in accordance with GAAP consistently applied; provided, that all financial
covenants and calculations in the Loan Documents shall be made in accordance with GAAP as in effect on the date hereof unless Borrower and Lender shall otherwise specifically agree in writing. That
certain items or computations are explicitly modified by the phrase "in accordance with GAAP" shall in no way be construed to limit the foregoing. All other undefined terms contained in this Agreement
or the other Loan Documents shall, unless the context indicates otherwise, have the meanings provided for by the Code. The words "herein," "hereof" and "hereunder" or other words of similar import
refer to this Agreement as a whole, including the exhibits and schedules thereto, as the same may from time to time be amended, modified or supplemented, and not to any particular section, subsection
or clause contained in this Agreement.

For
purposes of this Agreement and the other Loan Documents, the following additional rules of construction shall apply, unless specifically indicated to the contrary:
(a) wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural,; (b) the term "or" is not exclusive;
(c) the term "including" (or any form thereof) shall not be limiting or exclusive; (d) all references to statutes and related regulations shall include any amendments of same and any
successor statutes and regulations; and (e) all references to any instruments or agreements, including references to any of the Loan Documents, shall include any and all modifications or
amendments thereto and any and all extensions or renewals thereof.

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