Document:

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                                                                    EXHIBIT 10.9

                              AMENDED AND RESTATED
                  SECURED NONRECOURSE REVOLVING PROMISSORY NOTE

$9,084,073.65                                           Incline Village, Nevada
                                                               November 18, 1999

        FOR VALUE RECEIVED, the undersigned, Avistar Systems Corporation, a
Nevada corporation ("Borrower") promises to pay to the order of Collaborative
Holdings, a Nevada limited partnership ("Lender"), in lawful money of the United
States of America and in immediately available funds at the principal office of
Lender, or its successor, or at such other location as Lender, or any subsequent
holder hereof shall designate in writing, the aggregate unpaid principal amount
of all advances ("Advances") set forth on Exhibit A as well as all Advances made
hereafter by Lender to Borrower under the terms of this Secured Nonrecourse
Revolving Promissory Note (this "Note"), up to a maximum principal amount of
Nine Million Eighty Four Thousand Seventy Three Dollars and Sixty Five Cents
($9,084,073.65). This note hereby amends and restates any loan agreements
previously entered into between Borrower and Lender and still outstanding as of
the date hereof. This Note evidences outstanding obligations and is being issued
in substitution for, and not in payment of, that certain amended and restated
secured nonrecourse revolving promissory note dated January 9, 1998, as amended,
made by Borrower in favor of Lender. Interest shall accrue on the aggregate
unpaid principal amount of such Advances at an interest rate equal to the lesser
of 10% per annum or the maximum rate allowed by law on the first business day of
each month after an Advance has been made and shall be payable annually in
arrears; provided that any interest not paid on any annual payment date shall be
added to principal and thereafter shall accrue interest along with the
principal. Interest shall be computed on a 365 day year based upon the actual
number of days elapsed. The entire principal amount and all accrued but unpaid
interest shall be due and payable upon the earlier of (i) three years from the
date hereof; (ii) the date of consummation of a transaction in which more than
50% of Borrower is not owned by persons who were holders of capital stock or
securities convertible into capital stock of Borrower immediately prior to such
transaction or in which the composition of a majority of the Board of Directors
of Borrower changes; or (iii) 180 days following a firmly underwritten initial
public offering of Borrower at an aggregate offering price to the public of at
least $20,000,000 and with an offering price to the public of at least $1.50 per
share. This Note shall be terminated and canceled promptly upon Borrower's
repayment of the principal amount and all accrued but unpaid interest.

        This Note is subject to prepayment upon ninety (90) days written notice,
without penalty. Lender may waive this prepayment notice requirement in Lender's
sole and absolute discretion.

        Borrower represents and warrants that it is duly organized, legally
existing, in good standing and authorized to enter into this Note and that this
Note constitutes the legal, valid and binding obligation of Borrower.

        Borrower irrevocably waives the right to direct the application of any
and all payments at any time hereafter received by Lender from or on behalf of
Borrower, and Borrower irrevocably agrees that Lender shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Lender may deem advisable. In the absence of a
specific determination by Lender with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses; (b)
then due and payable interest payments and mandatory prepayments; and (c) then
due and payable principal payments and optional prepayments.

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        Lender is hereby authorized by Borrower to endorse on Lender's books and
records each Advance made by Lender under this Note and the amount of each
payment or prepayment of principal of each such Advance received by Lender. It
is understood, however, that failure to make any such endorsement (or any errors
in notation) shall not affect the obligations of Borrower with respect to
Advances made hereunder, and payments of principal and interest by Borrower
shall be credited to Borrower notwithstanding the failure to make a notation (or
any errors in notations) thereof on such books and records.

        If Borrower shall fail to do or to perform all things required of
Borrower in this Note within the time provided herein (such failure being an
"Event of Default"), Lender or any other holder of this Note, by negotiation,
assignment or otherwise, may, at Lender's sole option, accelerate the maturity
of the Note and the obligation evidenced hereby shall become due and payable in
full upon written notice of such acceleration to Borrower. The failure to pay
interest on any annual payment date shall not constitute an Event of Default
hereunder, and such accrued and unpaid interest shall be added to principal as
set forth above.

        Borrower promises to pay Lender all reasonable costs and reasonable
expenses of collection of this Note and to pay all reasonable attorneys' fees
incurred in such collection or in any suit or action to collect this Note or in
any appeal thereof. Borrower waives presentment, demand, protest, notice of
protest, notice of dishonor, notice of nonpayment, and any and all other notices
and demands in connection with the delivery, acceptance, performance, default or
enforcement of this Note, as well as any applicable statute of limitations. No
delay by Lender in exercising any power or right hereunder shall operate as a
waiver of any power or right. Time is of the essence as to all obligations
hereunder.

        Payment of this Note is limited to payment out of the assets of Borrower
which secure the repayment of this Note, and no stockholder of Borrower shall be
personally liable for the payment of this Note.

        This Note shall be deemed to be made under, and shall be construed in
accordance with and governed by, the laws of the State of Nevada, excluding
conflicts of laws principles.

                                           AVISTAR SYSTEMS CORPORATION

                                           By:   /s/ Michael G. Barsotti
                                              ---------------------------------
                                           Title: Chief Financial Officer

                                      -2-
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                                    EXHIBIT A

                            Schedule of Advances for
                  Secured Nonrecourse Revolving Promissory Note
                             As of November 18, 1999<PAGE>   1
                                                                   EXHIBIT 10.10

                           [SILICON VALLEY BANK LOGO]
                              SILICON VALLEY BANK
                           SPECIALTY FINANCE DIVISION

                    ACCOUNTS RECEIVABLE FINANCING AGREEMENT

     This ACCOUNTS RECEIVABLE FINANCING AGREEMENT (the "Agreement"), dated as of
May 26, 2000 is between Silicon Valley Bank, Specialty Finance Division of
("Bank"), and AVISTAR SYSTEMS CORPORATION, a Delaware corporation, ("Borrower"),
whose address is 555 Twin Dolphins Drive, Suite 360, Redwood Shores, California
94065 and with a FAX number of (650) 610-2901.

1.   DEFINITIONS. In this Agreement:

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

     "ACCOUNT DEBTOR" is defined in the California Uniform Commercial Code and
shall include any person liable on any Financed Receivable, such as, a guarantor
of the Financed Receivable and any issuer of a letter of credit or banker's
acceptance.

     "ADJUSTED QUICK RATIO" is, as of the last day of each month, a ratio of
Quick Assets to Current Liabilities minus Deferred Revenue minus current portion
of long term debt of at least 1.25 to 1.00.

     "ADJUSTMENTS" are all discounts, allowances, returns, disputes,
counterclaims, offsets, defenses, rights of recoupment, rights of return,
warranty claims, or short payments, asserted by or on behalf of any Account
Debtor for any Financed Receivable.

     "ADVANCE" is defined in Section 2.2.

     "ADVANCE RATE" is (i) 80%, provided however, in the event Borrower is
unable to maintain the Adjusted Quick Ratio, then effective the first day of the
missed Adjusted Quick Ratio, the Advance Rate shall be 80% net of deferred
revenue and offsets related to each specific Account Debtor; (ii) or another
percentage as Bank establishes under Section 2.2.

     "APPLICABLE RATE" is a rate per annum equal to the "Prime Rate" plus ONE
(1) percentage point, provided however, if the Equity Event does not occur, then
effective October 1, 2000 and thereafter, the Applicable Rate shall be the Prime
Rate plus TWO AND ONE HALF (2.50) percentage points.

     "BORROWER'S BOOKS" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or discs or any
equipment containing the information.

     "CODE" is the California Uniform Commercial Code.

     "COLLATERAL" is attached as Exhibit "A".

     "COLLATERAL HANDLING FEE" is defined in Section 3.5.

     "COLLECTIONS" are all funds received by Bank from or on behalf of an
Account Debtor for Financed Receivables.

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     "CURRENT LIABILITIES" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year.

     "COMPLIANCE CERTIFICATE" is attached as Exhibit "B".

     "DEFERRED REVENUE" is all amounts received in advance of performance under
contract and not yet recognized as revenue.

     "EARLY TERMINATION FEE" is defined in Section 3.6.

     "EQUITY EVENT" is a cash infusion into the Borrower in an amount no less
than $2,000,000.00 on or before September 30, 2000.

     "EVENT OF DEFAULT" is defined in Section 9.

     "FACILITY" is an extension of credit by Bank to Borrower in order to
finance receivables with an aggregate Account Balance not exceeding the
Facility Amount.

     "FACILITY AMOUNT" is $4,000,000.00.

     "FACILITY FEE" is defined in Section 3.4.

     "FACILITY PERIOD" is the period beginning on this date and continuing
until MAY 25, 2001, unless the period is terminated sooner by Bank with notice
to Borrower or by Borrower under Section 3.5.

     "FINANCE CHARGES" is defined in Section 3.2.

     "FINANCED RECEIVABLES" are all those accounts, receivables, chattel paper,
instruments, contract rights, documents, general intangibles, letters of
credit, drafts, bankers acceptances, and rights to payment, and all proceeds,
including their proceeds (collectively, "receivables"), which Bank finances and
make an Advance. A Financed Receivable stops being a Financed Receivable (but
remains Collateral) when the Advance made for the Financed Receivable has been
finally paid.

     "FINANCED RECEIVABLE BALANCE" is the total outstanding amount, at any
time, of all Financed Receivables.

     "GUARANTOR" means any guarantor of the Obligations.

     "INELIGIBLE RECEIVABLE" is any accounts receivable:

     (A) that is unpaid (90) calendar days after the invoice date; or

     (B) that is owed by an Account Debtor that has filed, or has had filed
         against it, any bankruptcy case, assignment for the benefit of
         creditors, receivership, or Insolvency Proceeding or who has become
         insolvent (as defined in the United States Bankruptcy Code) or who is
         generally not paying its debts as they become due; or

     (C) for which there has been any breach of warranty or representation in
         Section 6 or any breach of any covenant in this Agreement; or

     (D) for which the Account Debtor asserts any discount, allowance, return,
         dispute, counterclaim, offset, defense, right of recoupment, right of
         return, warranty claim, or short payment.

     "INSOLVENCY PROCEEDING" are proceedings by or against any person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

     "INVOICE TRANSMITTAL" shows accounts receivable which Bank may finance
and, for each receivable, includes the Account Debtor's name, address, invoice
amount, invoice date and invoice number and is signed by Borrower's authorized
representative.

     "LOCKBOX" is described in Section 6.2.

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     "MINIMUM FINANCE CHARGE" is $20,000.00.

     "OBLIGATIONS" are all advances, liabilities, obligations, covenants and
duties owing, arising, due or payable by Borrower to Bank now or later under
this Agreement or any other document, instrument or agreement, account
(including those acquired by assignment) primary or secondary, such as all
Advances, Finance Charges, Collateral Handling Fees, interest, fees, expenses,
professional fees and attorneys' fees or other.

     "PRIME RATE" is Bank's most recently announced "prime rate," even if it is
not Bank's lowest rate.

     "QUICK ASSETS" is, on any date, the Borrower's consolidated, unrestricted
cash, cash equivalents, net billed accounts receivable and investments with
maturities of fewer than 12 months determined according to GAAP.

     "RECONCILIATION DAY" is the last calendar day of each month.

     "RECONCILIATION PERIOD" is each calendar month.

     "SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's indebtedness owed to Bank and which is reflected in a written
agreement in a manner and form acceptable to Bank and approved by Bank in
writing.

     "TOTAL LIABILITIES" is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.

2.   FINANCING OF ACCOUNTS RECEIVABLE.

     2.1 REQUEST FOR ADVANCES. During the Facility Period, Borrower may offer
accounts receivable to Bank, if there is not an Event of Default. Borrower will
deliver an Invoice Transmittal for each accounts receivable it offers. Bank may
rely on information on or with the Invoice Transmittal.

     2.2 ACCEPTANCE OF ACCOUNTS RECEIVABLE. Bank is not obligated to finance
any accounts receivable. Bank may approve any Account Debtor's credit before
financing any receivable. When Bank accepts a receivable, it will pay Borrower
the Advance Rate times the face amount of the receivable (the "Advance"). Bank
may, in its discretion, change the percentage of the Advance Rate. When Bank
makes an Advance, the receivable becomes a "Financed Receivable." All
representations and warranties in Section 6 must be true as of the date of the
Invoice Transmittal and of the Advance and no Event of Default exists would
occur as a result of the Advance. The aggregate amount of all Financed
Receivables outstanding at any time may not exceed the Facility Amount.

3.   COLLECTIONS, FINANCE CHARGES, REMITTANCES AND FEES. The Obligations shall
be subject to the following fees and Finance Charges. Fees and Finance Charges
may, in Bank's discretion, be charged as an Advance, and shall thereafter
accrue fees and Finance Charges as described below. Bank may, in its
discretion, charge fee and Finance Charges to Borrower's deposit account
maintained with Bank.

     3.1 COLLECTIONS. Collections will be credited to the Financed Receivables
Balance, but if there is an Event of Default, Bank may apply Collections to the
Obligation in any order it chooses. If Bank receives a payment for both
Financed Receivable and a non Financed Receivable, the funds will first be
applied to the Financed Receivable and, if there is not an Event of Default,
the excess will be remitted to the Borrower, subject to Section 3.10.

     3.2 FINANCE CHARGES. In computing Finance Charges on the Obligations, all
Collections received by Bank shall be deemed applied by Bank on account of the
Obligations 3 Business Days after receipt of the Collections. Borrower will pay
a finance charge (the "Finance Charge"), which is the greater of (i) the
Applicable Rate times the number of days in the Reconciliation Period times the
outstanding average daily Financed Receivable Balance for that Reconciliation
Period or (ii) the Minimum Finance Charge. After an Event of Default,
Obligations accrue interest at 5 percent above the Applicable Rate effective
immediately before the Event of Default.

     3.3 INTENTIONALLY OMITTED.

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     3.4.  FACILITY FEE. A fully earned, non-refundable facility fee of
     $40,000.00 is due upon execution of this Agreement.

     3.5.  COLLATERAL HANDLING FEE. On each Reconciliation Day, Borrower will
     pay to Bank a collateral handling fee, equal to .25% per month of the
     average daily Financed Receivable Balance outstanding during the applicable
     Reconciliation Period. After an Event of Default, the Collateral Handling
     Fee will increase an additional .50% effective immediately before the Event
     of Default.

     3.6.  EARLY TERMINATION FEE. A fully earned, non-refundable early
     termination fee of $80,000.00 is due upon voluntary or involuntary full
     payment of the Obligations and termination of this Facility prior to APRIL
     26, 2001 unless the Obligations are paid in full from an initial advance
     from a loan agreement with Silicon Valley Bank.

     3.7.  ACCOUNTING. After each Reconciliation Period, Bank will provide an
     accounting of the transactions for that Reconciliation Period, including
     the amount of all Financed Receivables, all Collections, Adjustments,
     Finance Charges and the Collateral Handling Fee. If Borrower does not
     object to the accounting in writing within 30 days it is considered
     correct. All Finance Charges and other interest and fees calculated on the
     basis of a 360 day year and actual days elapsed.

     3.8.  DEDUCTIONS. Bank may deduct fees, finance charges and other amounts
     due from any Advances made or Collections received by Bank.

     3.9.  INTENTIONALLY OMITTED.

     3.10. ACCOUNT COLLECTION SERVICES. All Borrowers' receivables are to be
     paid to the same address/or party and Borrower and Bank must agree on such
     address. If Bank collects all receivables and there is not an Event of
     Default or an event that with notice or lapse of time will be an Event of
     Default, within 3 days of receipt of those collections, Bank will give
     Borrower, the receivables collections it receives for receivables other
     than Financed Receivables and/or amount in excess of the amount for which
     Bank has made an Advance to Borrower, less any amount due to Bank, such as
     the Finance Charge, Collateral Handling Fee and expenses or otherwise. This
     Section does not impose any affirmative duty on Bank to do any act other
     than to turn over amounts. All receivables and collections are Collateral
     and if an Event of Default occurs, Bank need not remit collections of
     Collateral and may apply them to the Obligations.

4.   REPAYMENT OF OBLIGATIONS AND AGREEMENT EXPIRATION.

     4.1. REPAYMENT ON MATURITY. Borrower will repay each Advance on the
     earliest of: (a) payment of the Financed Receivable in respect which the
     Advance was made, (b) the Financed Receivable becomes an Ineligible
     Receivable, (c) when any Adjustment is made to the Financed Receivable (but
     only to the extent of the Adjustment if the Financed Receivable is not
     otherwise an Ineligible Receivable, or (d) the last day of the Facility
     Period (including any early termination). Each payment will also include
     all accrued Finance Charges on the Advance and all other amounts due
     hereunder.

     4.2. REPAYMENT ON EVENT OF DEFAULT. When there is an Event of Default,
     Borrower will, if Bank demands (or, in an Event of Default under Section
     9(B), immediately without notice or demand from Bank) repay all of the
     Advances. The demand may, at Bank's option, include the Advance for each
     Financed Receivable then outstanding and all accrued Finance Charges,
     attorneys and professional fees, court costs and expenses, and any other
     Obligations.

     4.3. AGREEMENT EXPIRATION. This Agreement shall expire upon the later of
     (i) the end of the Facility Period; or (ii) repayment of the Obligations.

5.   POWER OF ATTORNEY. Borrower irrevocably appoints Bank and its successors
     and assigns it attorney-in-fact and authorizes Bank, regardless of whether
     there has been an Event of Default, to:

     (A)  sell, assign, transfer, pledge, compromise, or discharge all or any
          part of the Financed Receivables;

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     (B)  demand, collect, sue, and give releases to any Account Debtor for
          monies due and compromise, prosecute, or defend any action, claim,
          case or proceeding about the Financed Receivables, including filing a
          claim or voting a claim in any bankruptcy case in Bank's or
          Borrower's name, as Bank chooses;

     (C)  prepare, file and sign Borrower's name on any notice, claim,
          assignment, demand, draft, or notice of or satisfaction of lien or
          mechanics' lien or similar document;

     (D)  notify all Account Debtors to pay Bank directly;

     (E)  receive, open, and dispose of mail addressed to Borrower;

     (F)  endorse Borrower's name on check or other instruments;

     (G)  execute on Borrower's behalf any instruments, documents, financing
          statements to perfect Bank's interests in the Financed Receivables and
          Collateral; and

     (H)  do all acts and things necessary or expedient.

6.   REPRESENTATIONS, WARRANTIES AND COVENANTS.

     6.1. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants for
          each Financed Receivable:

          (A)  It is the owner with legal right to sell, transfer and assign it;

          (B)  The correct amount is on the Invoice Transmittal and is not
               disputed;

          (C)  Payment is not contingent on any obligation or contract and it
               has fulfilled all its obligations as of the Invoice Transmittal
               date;

          (D)  It is based on an actual sale and delivery of goods and/or
               services rendered, due to Borrower, it is not past due or in
               default, has not been previously sold, assigned, transferred, or
               pledged and is free of any liens, security interests and
               encumbrances;

          (E)  There are no defenses, offsets, counterclaims or agreements for
               which the Account Debtor may claim any deduction or discount;

          (F)  It reasonably believes no Account Debtor is insolvent or subject
               to any Insolvency Proceedings;

          (G)  It has not filed or had filed against it Insolvency Proceedings
               and does not anticipate any filing;

          (H)  Bank has the right to endorse and/or require Borrower to endorse
               all payments received on Financed Receivables and all proceeds of
               Collateral.

          (I)  No representation, warranty or other statement of Borrower in any
               certificate or written statement given to Bank contains any
               untrue statement of a material fact or omits to state a material
               fact necessary to make the statement contained in the
               certificates or statement not misleading.

     6.1.1     ADDITIONAL REPRESENTATIONS AND WARRANTIES.  Borrower represents
               and warrants as follows:

          (A)  Borrower is duly existing and in good standing in its state of
               formation and qualified and licensed to do business in, and in
               good standing in, any state in which the conduct of its business
               or its ownership of property requires that it be qualified. The
               execution, delivery and performance of this Agreement has been
               duly authorized, and does not conflict with Borrower's
               organizational documents, nor constitute an Event of Default
               under any material agreement by which Borrower is bound. Borrower
               is not in default under any agreement to which or by which it is
               bound.

          (B)  Borrower has good title to the Collateral. All inventory is in
               all material respects of good and marketable quality, free from
               material defects.

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     (C)  Borrower is not an "investment company" or a company "controlled" by
          an "investment company" under the Investment Company Act. Borrower is
          not engaged as one of its important activities in extending credit
          for margin stock (under Regulations G, T and U of the Federal Reserve
          Board of Governors). Borrower has complied with the Federal Fair
          Labor Standards Act. Borrower has not violated any laws, ordinances
          or rules. None of Borrower's properties or assets has been used by
          Borrower, to the best of Borrower's knowledge, by previous persons,
          in disposing, producing, storing, treating, or transporting any
          hazardous substance other than legally. Borrower has timely filed all
          required tax returns and paid, or made adequate provision to pay, all
          taxes. Borrower has obtained all consents, approvals and
          authorizations of, made all declarations or filings with, and given
          all notices to, all government authorities that are necessary to
          continue its business as currently conducted.

6.2  AFFIRMATIVE COVENANTS. Borrower will do all of the following:

     (A)  Maintain its corporate existence and good standing in its
          jurisdictions of incorporation and maintain its qualification in each
          jurisdiction necessary to Borrower's business or operations.

     (B)  Give Bank at least 10 days prior written notice of changes to its
          name, organization, chief executive office or location of records.

     (C)  Pay all its taxes including gross payroll, withholding and sales
          taxes when due and will deliver satisfactory evidence of payment if
          requested.

     (D)  Provide a written report within 10 days, if payment of any Financed
          Receivable does not occur by its due date and include the reasons for
          the delay.

     (E)  Give Bank copies of all Forms 10-K, 10-Q and 8-K (or equivalents)
          within 5 days of filing with the Securities and Exchange Commission,
          while any Financed Receivable is outstanding.

     (F)  Execute any further instruments and take further action as Bank
          requests to perfect or continue Bank's security interest in the
          Collateral or to effect the purposes of this Agreement.

     (G)  Provide Bank with a Compliance Certificate no later than 5 days
          following each quarter end or as requested by Bank.

     (H)  Provide Bank with, as soon as available, but no later than 30 days
          following each Reconciliation Period, a company prepared balance
          sheet and income statement, prepared under GAAP, consistently
          applied, covering Borrower's operations during the period together
          with an aged listing of accounts receivable and accounts payable and
          a detailed listing of deferred revenue.

     (I)  Immediately notify, transfer and deliver to Bank all collections
          Borrower receives for Financed Receivables.

     (J)  Direct each Account Debtor to make payments to a lockbox account with
          Bank or to wire transfer payments to Bank.

     (K)  Borrower will allow Bank to audit Borrower's Collateral, including
          but not limited to Borrower's Accounts, at Borrowers expense, no
          later than 90 days of the execution of this Agreement and annually
          thereafter. Provided however, if an Event of Default has occurred,
          Bank may audit Borrower's Collateral, including but not limited to
          Borrower's Accounts at Bank's sole discretion and without notification
          and authorization from Borrower.

6.3  NEGATIVE COVENANTS. Borrower will not do any of the following without
Bank's prior written consent:

     (A)  Assign, transfer, sell or grant, or permit any lien or security
          interest in the Collateral.

     (B)  Convey, sell, lease, transfer or otherwise dispose of the Collateral.

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<PAGE>   7
     (C) Create, incur, assume, or be liable for any indebtedness.

     (D) Become an "investment company" or a company controlled by an
         "investment company," under the Investment Company Act of 1940 or
         undertake as one of its important activities extending credit to
         purchase or carry margin stock, or use the proceeds of any Advance for
         that purpose; fail to meet the minimum funding requirements of ERISA,
         permit a Reportable Event or Prohibited Transaction, as defined in
         ERISA, to occur; fail to comply with the Federal Fair Labor Standards
         Act or violate any other law or regulation, or permit any of its
         subsidiaries to do so.

7. ADJUSTMENTS. If any Account Debtor asserts a discount, allowance, return,
offset, defense, warranty claim, or the like (an "Adjustment") or if Borrower
breaches any of the representations, warranties or covenants set forth in
Section 6., Borrower will promptly advise Bank. Borrower will resell any
rejected, returned, returned or recovered personal property for Bank, at
Borrower's expense, and pay proceeds to Bank. While Borrower has returned goods
that are Borrower property, Borrower will segregate and mark them "property of
Silicon Valley Bank." Bank owns the Financed Receivables and until receipt of
payment, has the right to take possession of any rejected, returned, or
recovered personal property.

8. SECURITY INTEREST. Borrower grants to Bank a continuing security interest in
all presently and later acquired Collateral. Any security interest will be a
first priority security interest in the Collateral.

9. EVENTS OF DEFAULT. Any one or more of the following is an Event of Default.

     (A) Borrower fails to pay any amount owed to Bank when due;

     (B) Borrower files or has filed against it any Insolvency Proceedings or
         any assignment for the benefit of creditors, or appointment of a
         receiver or custodian for any of its assets;

     (C) Borrower becomes insolvent or is generally not paying its debts as
         they become due or is left with unreasonably small capital;

     (D) Any involuntary lien, garnishment, attachment attaches to the Financed
         Receivables or any Collateral;

     (E) Borrower breaches any covenant, agreement, warranty, or representation
         and does not cure it to Bank's satisfaction within 10 days; but a
         breach that cannot be cured it is an immediate Event of Default;

     (F) Borrower is in default under any document, instrument or agreement
         evidencing any debt, obligation or liability in favor of Bank its
         affiliates or vendors regardless of whether the debt, obligation or
         liability is direct or indirect, primary or secondary, or fixed or
         contingent;

     (G) An event of default occurs under any Guaranty of the Obligations or
         any material provision of any Guaranty is not valid or enforceable or
         a Guaranty is repudiated or terminated;

     (H) A material default of Event of Default occurs under any agreement
         between Borrower and any creditor of Borrower that signed a
         subordination agreement with Bank;

     (I) Any creditor that has signed a subordination agreement with Bank
         breaches any terms of the subordination agreement; or

     (J) (i) A material impairment in the perfection or priority of the Bank's
         security interest in the Collateral; (ii) a material adverse change in
         the business, operations, or conditions (financial or otherwise) of
         the Borrower occurs; or (iii) a material impairment of the prospect of
         repayment of any portion of the Advances occurs.

10. REMEDIES.

    10.1 REMEDIES UPON DEFAULT. When an Event of Default occurs, (1) Bank may
    stop financing receivables or extending credit to Borrower; (2) at Banks
    option and on demand, all or a portion of the Obligations or, for to an
    Event of Default described in Section 9(B), automatically and without
    demand, are due and payable in full; (3) apply to the Obligations any (i)
    balances and deposits of Borrower it holds, or (ii) any amount held by Bank

                                       7
<PAGE>   8
     owing to or for the credit or the account of Borrower; and (4) Bank may
     exercise all rights and remedies under this Agreement and the law,
     including those of a secured party under the Code, power of attorney rights
     in Section 5 for the Collateral, and the right to collect, dispose of,
     sell, lease, use, and realize upon all Financed Receivables and Collateral
     in any commercial manner. Borrower agrees that any notice of sale required
     to be given to Borrower is deemed given if at least five days before the
     sale may be held.

     10.2 DEMAND WAIVER. Borrower waives demand, notice of default or dishonor,
     notice of payment and nonpayment, notice of any default, nonpayment at
     maturity, release, compromise, settlement, extension, or renewal of
     accounts, documents, instruments, chattel paper, and guaranties held by
     Bank on which Borrower is liable.

     10.3 DEFAULT RATE.  If any amount is not paid when due, the amount bears
     interest at the Applicable Rate plus five percent until the earlier of (a)
     payment in good funds or (b) entry of a final judgment when the principal
     amount of any money judgment will accrue interest at the highest rate
     allowed by law.

11.  FEES, COSTS AND EXPENSES. The Borrower will pay on demand all fees, costs
and expenses (including attorneys' and professionals fees with costs and
expenses) that Bank incurs from: (a) preparing, negotiating, administering, and
enforcing this Agreement or related agreement, including any amendments, waivers
or consents, (b) any litigation or dispute relating to the Financed Receivables,
the Collateral, this Agreement or any other agreement, (c) enforcing any rights
against Borrower or any guarantor, or any Account Debtor, (d) protecting or
enforcing its interest in the Financed Receivables or other Collateral, (e)
collecting the Financed Receivables and the Obligations, and (f) any bankruptcy
case or insolvency proceeding involving Borrower, any Financed Receivable, the
Collateral, any Account Debtor, or any Guarantor.

12.  CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER. California law governs this
Agreement. Borrower and Bank each submit to the exclusive jurisdiction of the
State and Federal courts in Santa Clara County, California.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

13.  NOTICES. Notices or demands by either party about this Agreement must be in
writing and personally delivered or sent by an overnight delivery service, by
certified mail postage prepaid return receipt requested, or by FAX to the
addresses listed at the beginning of this Agreement. A party may change notice
address by written notice to the other party.

14.  GENERAL PROVISIONS.

     14.1 SUCCESSORS AND ASSIGNS. This Agreement binds and is for the benefit of
     successors and permitted assigns of each party. Borrower may not assign
     this Agreement or any rights under it without Bank's prior written consent
     which may be granted or withheld in Bank's discretion. Bank may, without
     the consent of or notice to Borrower, sell, transfer, or grant
     participation in any part of Bank's obligations, rights or benefits under
     this Agreement.

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

     14.3 TIME OF ESSENCE. Time is of the essence for performance of all
     obligations in this Agreement.

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

                                       8

<PAGE>   9
14.5 AMENDMENTS IN WRITING, INTEGRATION. All amendments to this Agreement must
be in writing. This Agreement is the entire agreement about this subject matter
and supersedes prior negotiations or agreements.

14.6 COUNTERPARTS. This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts and when executed and
delivered are one Agreement.

14.7 SURVIVAL. All covenants, representations and warranties made in this
Agreement continue in force while any Financed Receivable amount remains
outstanding. Borrower's indemnification obligations survive until all statutes
of limitations for actions that may be brought against Bank have run.

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

14.9 OTHER AGREEMENTS. This Agreement may not adversely affect Banks rights
under any other document or Agreement. If there is a conflict between this
Agreement and any Agreement between Borrower and Bank, Bank may determine in its
sole discretion which provision applies. Borrower acknowledges that any security
agreements, liens and/or security interests securing payment of Borrower's
Obligations also secure Borrower's Obligations under this Agreement and are not
adversely affected by this Agreement. Additionally, (a) any Collateral under
other agreements or documents between Borrower and Bank secures Borrowers
Obligations under this Agreement and (b) a default by Borrower under this
Agreement is a default under agreements between Borrower and Bank.

BORROWER: AVISTAR SYSTEMS CORPORATION

By  /s/ [SIGNATURE ILLEGIBLE]
   -------------------------------------
Title  Chief Financial Officer 5/23/00
      ----------------------------------

BANK: SILICON VALLEY BANK

By  /s/ [SIGNATURE ILLEGIBLE]
   -------------------------------------
Title  SVP
      ----------------------------------

                                       9

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