Document:

Option
Agreement

    

    This
Agreement dated this 29th day of
April, 2009, by and between ALTERNATIVE WIND RESOURCES, LLC, a New York limited
liability company (hereinafter referred to as “AWR”), and WINDTAMER CORPORATION,
a New York State corporation (hereinafter referred to as
“WINDTAMER”).

     

    WHEREAS,
WINDTAMER holds certain United States and International patents and patent
pending claims and rights for WindTamer Turbines; and

     

    WHEREAS,
AWR desires to obtain Exclusive United States and International Licensing rights
to manufacture, lease and sell 15KW and larger WindTamer Turbines.

     

    NOW
THEREFORE, for good and valuable consideration and in consideration of the
mutual covenants contained herein the parties hereto agree as
follows:

     

    1.           WINDTAMER
agrees to grant to AWR an Exclusive License and appropriate rights under all of
WINDTAMER's patents, patents pending and other intellectual property rights, to
enable AWR to manufacture, market, lease and defend patents for all 15KW and
larger WindTamer Turbines.

     

    2.           In
consideration for said Exclusive Licensing rights to be granted, AWR will pay to
WINDTAMER the sum of $6,000,000.00. In addition, AWR shall pay to WINDTAMER the
following royalties for each turbine that is sold or leased: for each 15KW
turbine $5,000.00; for each 20KW turbine $6,000,00; for each 30KW turbine
$7,000.00. Each year the base amount of all royalties to be paid will be
adjusted to reflect the US Federal Cost of Living Index.

     

    3.           This
Option Agreement shall remain in full force and effect for a period of 60 days
from the date of the execution or this Agreement.

     

    4.           This
Option Agreement is contingent upon WINDTAMER. providing AWR with all
documentation reasonably necessary in order to evidence that WINDTAMER holds
valid United States and International patents and patents pending claims and
rights, which were granted for a fluid driven enhanced generator Patent No.
6655907 issued December 2, 2003, and that WINDTAMER has the authority to grant
such exclusive rights to AWR. In the event that WINDTAMER cannot provide such
information in a form reasonably acceptable by AWR, this Option Agreement shall
be extended 45 days after such information is provided.

     

    
      
         

      

      
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    5.           In
consideration for the granting of this option, AWR will pay to WINDTAMER the sum
of $10,000.00.

     

    6.           The
License Agreement shall provide:

     

    A.           AWR
shall pay such royalty on all sales of WindTamer Turbines to WINDTAMER each
calendar quarter, no later than 30 days after the end of each calendar
quarter.

     

    B.           AWR
will keep and maintain records, during the term of this License Agreement, to
reflect the exact number of WindTamer units manufactured and sold.

     

    C.           WINDTAMER
shall have the right, upon reasonable prior notice, to audit AWR's records to
determine the accuracy of AWR's royalty payments. In the event any underpayments
are discovered, AWR is to immediately make payment to WINDTAMER to correct the
underpayment.

     

    D.           That
the parties shall remain at all times, independent contractors in the
performance of the Agreement and nothing contained herein shall be deemed to
create a joint venture, partnership or agency relationship between the parties.
Neither party shall have the right or authority to assume or to create any
obligation or responsibility, expressed or implied, on behalf of the other as
may be expressly provided otherwise in said Agreement. Each party shall be
solely responsible for the performance of its employees and for all costs and
expenses of its employees, to include, but not be limited to employee
benefits.

     

    8.           The
License Agreement shall be effective and commence upon the payment of
$6,000,000.00 and shall remain in full force and effect for a period of 50
years, AWR may renew the License Agreement for an additional term of 50 years by
providing a written renewal notice to WINDTAMER, no later than 90 days prior to
the end of the initial term.

     

    9.           Any
amendments or modifications to this Agreement must be in writing and signed by
authorized representatives of both parties. Any verbal agreements, discussions,
and understandings, expressed or implied, shall not constitute an amendment to
this Agreement.

     

    
      
         

      

      
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    10.           Unless
otherwise expressly provided for, all notices, requests, demands, consents or
other communications required or pertaining to this Agreement shall be sent by
next business day courier, fax followed by confirmation by mail, e-mail or some
other method that provided proof of deliver, to the address set forth
below.

     

    
      
        	
                WindTamer
      Corporation

                156
      Court Street

                Geneseo,
      NY 14454

              	
                Alternative
      Wind Resources, LLC

                Attn:
      Mario J. Pirrello

                         
      2040 Ridge Road East

                         
      Rochester, NY 14622

              

      

    

    

    IN
WITNESS WHEREOF, the parties have caused this agreement to be executed by their
duly authorized representatives.

    

    
      
        
          
            
              
                	
                        WINDTAMER
      CORPORATION

                      	 
      	
                        ALTERNATIVE
      WIND RESOURCES, LLC

                      
	 
      	 
      	 
      
	
                        By:

                      	
                        /s/ Gerald Brock 4/29/2009

                      	 
      	
                        By:

                      	
                        /s/ George Cary

                      
	 
      	
                            
      Jerry Brock

                      	 
      	 
      	
                            
      George Cary

                      
	 
      	
                            
      President and CEO

                      	 
      	 
      	
                            
      Managing
Member

                      

              

            

          

        

      

    

     

    
      
         

      

      
        3 of
3DOCUMENT
CAPTURE TECHNOLOGIES, INC.

    

    SYSCAN,
INC.

    

    BRIDGE
BANK, NATIONAL ASSOCIATION

    

    LOAN
AND SECURITY AGREEMENT

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    This
LOAN AND SECURITY
AGREEMENT is entered into as of September 2, 2009, by and between
BRIDGE BANK, NATIONAL
ASSOCIATION (“Bank”), DOCUMENT CAPTURE TECHNOLOGIES, INC.
(“DCT”) and SYSCAN,
INC. (each, a “Borrower” and collectively, “Borrowers”).

     

    RECITALS

     

    Borrowers
wish to obtain credit from time to time from Bank, and Bank desires to extend
credit to Borrowers.  This Agreement sets forth the terms on which
Bank will advance credit to Borrowers, and Borrowers will repay the amounts
owing to Bank.

     

    AGREEMENT

     

    The
parties agree as follows:

     

    1.           DEFINITIONS AND
CONSTRUCTION.

     

    1.1           Definitions.  As
used in this Agreement, the following terms shall have the following
definitions:

     

    “Accounts”
means all presently existing and hereafter arising accounts, contract rights,
payment intangibles, and all other forms of obligations owing to a Borrower
arising out of the sale or lease of goods (including, without limitation, the
licensing of software and other technology) or the rendering of services by a
Borrower, whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by a Borrower and Borrower’s Books relating to any of
the foregoing.

     

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

     

    “Affiliate”
means, with respect to any Person, any Person that owns or controls directly or
indirectly such Person, any Person that controls or is controlled by or is under
common control with such Person, and each of such Person’s senior executive
officers, directors, and partners.

     

    “Bank
Expenses” means all:  reasonable costs or expenses (including
reasonable attorneys’ fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents;
reasonable Collateral audit fees; and Bank’s reasonable attorneys’ fees and
expenses incurred in amending, enforcing or defending the Loan Documents
(including fees and expenses of appeal), incurred before, during and after an
Insolvency Proceeding, whether or not suit is brought.

     

    “Borrower’s
Books” means all of a Borrower’s books and records
including:  ledgers; records concerning a Borrower’s assets or
liabilities, the Collateral, business operations or financial condition; and all
computer programs, or tape files, and the equipment, containing such
information.

     

    “Borrowing
Base” means an amount equal to seventy-five percent (75%) of Eligible Accounts
as determined by Bank with reference to the most recent Borrowing Base
Certificate delivered by Borrower.

     

    “Business
Day” means any day that is not a Saturday, Sunday, or other day on which banks
in the State of California are authorized or required to close.

     

    “Cash
Management Sublimit” means a sublimit for cash management transactions approved
by Bank under the Revolving Line subject to the availability under the Revolving
Line and the Borrowing Base in an aggregate amount not to exceed $1,000,000
minus, in each case,
any amounts outstanding under the Letter of Credit Sublimit and the Foreign
Exchange Sublimit.

     

    
      
        
        

      

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

     

    “Closing
Date” means the date of this Agreement.

     

    “Code”
means the California Uniform Commercial Code.

     

    “Collateral”
means the property described on Exhibit A attached
hereto.

     

    “Contingent
Obligation” means, as applied to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another;
(ii) any obligations with respect to undrawn letters of credit, corporate
credit cards, or merchant services issued or provided for the account of that
Person; and (iii) all obligations arising under any agreement or
arrangement designed to protect such Person against fluctuation in interest
rates, currency exchange rates or commodity prices; provided, however, that the
term “Contingent Obligation” shall not include endorsements for collection or
deposit in the ordinary course of business.  The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by Bank in good faith;
provided, however, that such amount shall not in any event exceed the maximum
amount of the obligations under the guarantee or other support
arrangement.

     

    “Copyrights”
means any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative
work thereof.

     

    “Credit
Extension” means each Advance, Letter of Credit, use of Cash Management
Services, FX Contracts, or any other extension of credit by Bank for the benefit
of a Borrower hereunder.

     

    “Current
Liabilities” means, as of any applicable date, all amounts that should, in
accordance with GAAP, be included as current liabilities on the consolidated
balance sheet of a Borrower and its Subsidiaries, as at such date, plus, to the
extent not already included therein, all outstanding Credit Extensions made
under this Agreement.

     

    “Daily
Balance” means the amount of the Obligations owed at the end of a given
day.

     

    “Eligible
Accounts” means those Accounts that arise in the ordinary course of a Borrower’s
business that comply with all of a Borrower’s representations and warranties to
Bank set forth in Section 5.4; provided, that standards of eligibility may
be fixed and revised from time to time by Bank in Bank’s reasonable judgment and
upon notification thereof to a Borrower in accordance with the provisions
hereof.  Unless otherwise agreed to by Bank, Eligible Accounts shall
not include the following:

     

    (a)           Accounts
that the account debtor has failed to pay within ninety (90) days of invoice
date;

     

    (b)           Accounts
with respect to an account debtor, thirty percent (30%) of whose Accounts the
account debtor has failed to pay within ninety (90) days of invoice
date;

     

    (c)           Accounts
with respect to which the account debtor is an officer, employee, or agent of a
Borrower;

     

    (d)           Accounts
with respect to which goods are placed on consignment, guaranteed sale, sale or
return, sale on approval, bill and hold, or other terms by reason of which the
payment by the account debtor may be conditional;

     

    (e)           Accounts
with respect to which the account debtor is an Affiliate of a
Borrower;

     

    
      
        
        

      

      
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    (f)           Accounts
with respect to which the account debtor does not have its principal place of
business in the United States or Canada, except for Eligible Foreign
Accounts;

     

    (g)          Accounts
with respect to which the account debtor is the United States or any department,
agency, or instrumentality of the United States;

     

    (h)          Accounts
with respect to which a Borrower is liable to the account debtor for goods sold
or services rendered by the account debtor to such Borrower or for deposits or
other property of the account debtor held by a Borrower, but only to the extent
of any amounts owing to the account debtor against amounts owed to such
Borrower;

     

    (i)           Accounts
with respect to an account debtor, including Subsidiaries and Affiliates, whose
total obligations to a Borrower exceed twenty-five percent (25%) of all
Accounts, to the extent such obligations exceed the aforementioned percentage,
except as approved in writing by Bank;

     

    (j)           Offsettable
deferred revenue in excess of $150,000;

     

    (k)          Accounts
with respect to which the account debtor disputes liability or makes any claim
with respect thereto as to which Bank believes, in its sole discretion, that
there may be a basis for dispute (but only to the extent of the amount subject
to such dispute or claim), or is subject to any Insolvency Proceeding, or
becomes insolvent, or goes out of business; and

     

    (l)           Accounts
the collection of which Bank reasonably determines to be doubtful.

     

    “Eligible
Foreign Accounts” means Accounts with respect to which the account debtor does
not have its principal place of business in the United States and that
(i) are supported by one or more letters of credit in an amount and of a
tenor, and issued by a financial institution, acceptable to Bank, or
(ii) that Bank approves on a case-by-case basis.

     

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

     

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

     

    “Event of
Default” has the meaning assigned in Article 8.

     

    “Foreign
Exchange Sublimit” means a sublimit for foreign exchange contracts under the
Revolving Line, subject to the availability under the Revolving Line and the
Borrowing Base, in an aggregate amount not to exceed $1,000,000 minus, in each case, any
amounts outstanding under the Letter of Credit Sublimit and the Cash Management
Sublimit.

     

    “GAAP”
means generally accepted accounting principles as in effect from time to
time.

     

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

     

    “Insolvency
Proceeding” means any proceeding commenced by or against any person or entity
under any provision of the United States Bankruptcy Code, as amended, or under
any other bankruptcy or insolvency law, including assignments for the benefit of
creditors, formal or informal moratoria, compositions, extension generally with
its creditors, or proceedings seeking reorganization, arrangement, or other
relief.

     

    
      
        
        

      

      
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    “Intellectual Property Collateral”
means all of a Borrower’s right, title, and interest in and to the following:
Copyrights, Trademarks and Patents; all trade secrets, all design rights, claims
for damages by way of past, present and future infringement of any of the rights
included above, all licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such use
to the extent permitted by such license or rights; all amendments, renewals and
extensions of any of the Copyrights, Trademarks or Patents; and all proceeds and
products of the foregoing, including without limitation all payments under
insurance or any indemnity or warranty payable in respect of any of the
foregoing.

     

    “Inventory”
means all inventory in which a Borrower has or acquires any interest, including
work in process and finished products intended for sale or lease or to be
furnished under a contract of service, of every kind and description now or at
any time hereafter owned by or in the custody or possession, actual or
constructive, of a Borrower, including such inventory as is temporarily out of
its custody or possession or in transit and including any returns upon any
accounts or other proceeds, including insurance proceeds, resulting from the
sale or disposition of any of the foregoing and any documents of title
representing any of the above, and Borrower’s Books relating to any of the
foregoing.

     

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

     

    “Letter
of Credit” means a commercial or standby letter of credit or similar undertaking
issued by Bank at a Borrower’s request in accordance with Section
2.1(b).

     

    “Letter
of Credit Sublimit” means a sublimit for Letters of Credit under the Revolving
Line, subject to the availability under the Revolving Line and the Borrowing
Base, in an aggregate amount not to exceed $1,000,000 minus, in each case, any
amounts outstanding under the Foreign Exchange Sublimit and the Cash Management
Sublimit.

     

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

     

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

     

    “Material
Adverse Effect” means a material adverse effect on (i) the business
operations, condition (financial or otherwise) or prospects of a Borrower and
its Subsidiaries taken as a whole or (ii) the ability of a Borrower to
repay the Obligations or otherwise perform its obligations under the Loan
Documents or (iii) the value or priority of Bank’s security interests in
the Collateral.

     

    “Negotiable
Collateral” means all letters of credit of which a Borrower is a beneficiary,
notes, drafts, instruments, securities, documents of title, and chattel paper,
and Borrower’s Books relating to any of the foregoing.

     

    “Obligations”
means all debt, principal, interest, Bank Expenses and other amounts owed to
Bank by a Borrower pursuant to this Agreement or any other agreement, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
including any interest that accrues after the commencement of an Insolvency
Proceeding and including any debt, liability, or obligation owing from a
Borrower to others that Bank may have obtained by assignment or
otherwise.

     

    “Patents”
means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.

     

    “Periodic
Payments” means all installments or similar recurring payments that a Borrower
may now or hereafter become obligated to pay to Bank pursuant to the terms and
provisions of any instrument, or agreement now or hereafter in existence between
a Borrower and Bank.

     

    “Permitted
Indebtedness” means:

     

    (a)           Indebtedness
of Borrowers in favor of Bank arising under this Agreement or any other Loan
Document;

     

    
      
        
        

      

      
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    (b)           Indebtedness
existing on the Closing Date and disclosed in the Schedule;

     

    (c)           Indebtedness
secured by a lien described in clause (c) of the defined term “Permitted
Liens,” provided (i) such Indebtedness does not exceed the lesser of the
cost or fair market value of the equipment financed with such Indebtedness and
(ii) such Indebtedness does not exceed $100,000 in the aggregate at any
given time; and

     

    (d)           Subordinated
Debt.

     

    “Permitted
Investment” means:

     

    (a)           Investments
existing on the Closing Date disclosed in the Schedule; and

     

    (b)           (i) marketable
direct obligations issued or unconditionally guaranteed by the United States of
America or any agency or any State thereof maturing within one (1) year from the
date of acquisition thereof, (ii) commercial paper maturing no more than
one (1) year from the date of creation thereof and currently having rating of at
least A-2 or P-2 from either Standard & Poor’s Corporation or
Moody’s Investors Service, (iii) certificates of deposit maturing no more
than one (1) year from the date of investment therein issued by Bank and
(iv) Bank’s money market accounts.

     

    “Permitted
Liens” means the following:

     

    (a)           Any
Liens existing on the Closing Date and disclosed in the Schedule or arising
under this Agreement or the other Loan Documents;

     

    (b)           Liens
for taxes, fees, assessments or other governmental charges or levies, either not
delinquent or being contested in good faith by appropriate proceedings, provided
the same have no priority over any of Bank’s security interests;

     

    (c)           Liens
(i) upon or in any equipment which was not financed by Bank acquired or
held by a Borrower or any of its Subsidiaries to secure the purchase price of
such equipment or indebtedness incurred solely for the purpose of financing the
acquisition of such equipment, or (ii) existing on such equipment at the
time of its acquisition, provided that the Lien is confined solely to the
property so acquired and improvements thereon, and the proceeds of such
equipment; and

     

    (d)           Liens
incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (a) through (c)
above, provided that any extension, renewal or replacement Lien shall be limited
to the property encumbered by the existing Lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not
increase.

     

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

     

    “Prime
Floor” means four percent (4.0%).

     

    “Prime
Rate” means the variable rate of interest, per annum, most recently announced by
Bank, as its “prime rate,” whether or not such announced rate is the lowest rate
available from Bank; provided, however that in no case shall the Prime Rate be
less than the Prime Floor.  Should Bank’s stated or otherwise
announced “prime rate” ever be below the Prime Floor, the Prime Rate, as used in
this Agreement, shall be the Prime Floor.

     

    
      
        
        

      

      
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    “Quick
Assets” means, at any date as of which the amount thereof shall be determined,
the unrestricted cash and cash-equivalents, plus net accounts receivable not to
exceed 90 days, of a Borrower determined in accordance with GAAP.

     

    “Responsible
Officer” means each of the Chief Executive Officer, the Chief Operating Officer,
the Chief Financial Officer and the Controller of a Borrower.

     

    “Revolving
Facility” means the facility under which a Borrower may request Bank to issue
Advances, as specified in Section 2.1(a) hereof.

     

    “Revolving
Line” means a credit extension of up to Two Million Dollars
($2,000,000).

     

    “Revolving
Maturity Date” means September 2, 2010.

     

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

     

    “Subordinated
Debt” means any debt incurred by a Borrower that is subordinated to the debt
owing by a Borrower to Bank on terms acceptable to Bank (and identified as being
such by Borrowers and Bank).

     

    “Subsidiary”
means any corporation, company or partnership in which (i) any general
partnership interest or (ii) more than 50% of the stock or other units of
ownership which by the terms thereof has the ordinary voting power to elect the
Board of Directors, managers or trustees of the entity, at the time as of which
any determination is being made, is owned by a Borrower, either directly or
through an Affiliate.

     

    “Tangible
Net Worth” means at any date as of which the amount thereof shall be determined,
the sum of the capital stock and additional paid-in capital plus retained
earnings (or minus accumulated deficit) of a Borrower and its Subsidiaries minus
intangible assets, plus Subordinated Debt, on a consolidated basis determined in
accordance with GAAP.

     

    “Trademarks”
means any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of a Borrower connected with and symbolized
by such trademarks.

     

    1.2         Accounting
Terms.  All accounting terms not specifically defined herein
shall be construed in accordance with GAAP and all calculations made hereunder
shall be made in accordance with GAAP.  When used herein, the terms
“financial statements” shall include the notes and schedules
thereto.

     

    2.           LOAN AND TERMS OF
PAYMENT.

     

    2.1         Credit
Extensions.

     

    Borrowers
promise to pay to the order of Bank, in lawful money of the United States of
America, the aggregate unpaid principal amount of all Credit Extensions made by
Bank to a Borrower hereunder.  Borrowers shall also pay interest on
the unpaid principal amount of such Credit Extensions at rates in accordance
with the terms hereof.

     

    (a)         Revolving
Advances.

     

    (i)           Subject
to and upon the terms and conditions of this Agreement,  Borrowers may
request Advances in an aggregate outstanding amount not to exceed the lesser of
(i) the Revolving Line or (ii) the Borrowing Base, minus, in each case, the
aggregate face amount of all outstanding Letters of Credit,  the Cash
Management Services, and the FX Amount.  Subject to the terms and
conditions of this Agreement, amounts borrowed pursuant to this
Section 2.1(a) may be repaid and reborrowed at any time prior to the
Revolving Maturity Date, at which time all Advances under this
Section 2.1(a) shall be immediately due and payable.  Borrowers
may prepay any Advances without penalty or premium.

     

    
      
        
        

      

      
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    (ii)           Whenever
a Borrower desires an Advance, such Borrower will notify Bank by facsimile
transmission or telephone no later than 3:00 p.m. Pacific time, on the
Business Day that the Advance is to be made.  Each such notification
shall be promptly confirmed by a Payment/Advance Form in substantially the form
of Exhibit B
hereto.  Bank is authorized to make Advances under this Agreement,
based upon instructions received from a Responsible Officer or a designee of a
Responsible Officer, or without instructions if in Bank’s discretion such
Advances are necessary to meet Obligations which have become due and remain
unpaid.  Bank shall be entitled to rely on any telephonic notice given
by a person who Bank reasonably believes to be a Responsible Officer or a
designee thereof, and Borrowers shall indemnify and hold Bank harmless for any
damages or loss suffered by Bank as a result of such reliance.  Bank
will credit the amount of Advances made under this Section 2.1(a) to a
Borrower’s deposit account.

     

    (b)           Letters of
Credit.  Subject to the terms and conditions of this Agreement,
at any time prior to the Revolving Maturity Date, Bank agrees to issue letters
of credit for the account of a Borrower (each, a “Letter of Credit” and
collectively, the “Letters of Credit”) in an aggregate outstanding face amount
not to exceed the lesser of the Revolving Line or the Borrowing Base minus, in each case, the
aggregate amount of the outstanding Advances at any time, provided that the
aggregate face amount of all outstanding Letters of Credit shall not exceed
$1,000,000 less any amounts outstanding under the Cash Management Sublimit and
the Foreign Exchange Sublimit.  All Letters of Credit shall be, in
form and substance, acceptable to Bank in its sole discretion and shall be
subject to the terms and conditions of Bank’s form of standard application and
letter of credit agreement (the  “Application”), which Borrowers
hereby agree to execute, including Bank’s standard fee.  On any drawn
but unreimbursed Letter of Credit, the unreimbursed amount shall be deemed an
Advance under Section 2.1(a).  Prior to the Revolving Maturity Date,
Borrowers shall secure in cash all obligations under any outstanding Letters of
Credit on terms acceptable to Bank.  The obligation of a Borrower to
reimburse Bank for drawings made under Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, the Application, and such Letters of Credit,
under all circumstances whatsoever.  Borrowers shall indemnify,
defend, protect, and hold Bank harmless from any loss, cost, expense or
liability, including, without limitation, reasonable attorneys’ fees, arising
out of or in connection with any Letters of Credit, except for expenses caused
by Bank’s gross negligence or willful misconduct.

     

    (c)           Cash Management
Sublimit.  Subject to the terms and conditions of this
Agreement and the availability under the Revolving Line and the Borrowing Base,
each Borrower may request cash management services which may include merchant
services, direct deposit of payroll, business credit card, and check cashing
services identified in various cash management services agreements related to
such services (the “Cash Management Services”) by delivering to Bank such
applications on Bank’s standard forms as requested by Bank; provided, however,
that the total amount of the Cash Management Services shall not exceed
$1,000,000 less any amounts outstanding under the Letter of Credit Sublimit and
the Foreign Exchange Sublimit, and that availability under the Revolving Line
shall be reduced by the Cash Management Sublimit.  In addition, Bank
may, in its sole discretion, charge as Advances any amounts that become due or
owing to Bank in connection with the Cash Management Services.  If at
any time the Revolving Facility is terminated or otherwise ceases to exist,
Borrowers shall immediately secure to Bank’s satisfaction its obligations with
respect to any Cash Management Services, and, effective as of such date, the
balance in any deposit accounts held by Bank and the certificates of deposit
issued by Bank in such Borrower’s name (and any interest paid thereon or
proceeds thereof, including any amounts payable upon the maturity or liquidation
of such certificates), shall automatically secure such obligations to the extent
of the then outstanding Cash Management Services.  Borrowers authorize
Bank to hold such balances in pledge and to decline to honor any drafts thereon
or any requests by a Borrower or any other Person to pay or otherwise transfer
any part of such balances for so long as the Cash Management Services
continue.

     

    (d)           Foreign Exchange
Sublimit.  Subject to and upon the terms and conditions of this
Agreement and any other agreement that a Borrower may enter into with the Bank
in connection with foreign exchange transactions (“FX Contracts”) and subject to
the availability under the Revolving Line and the Borrowing Base, a Borrower may
request Bank to enter into FX Contracts with such Borrower due not later than
the Revolving Maturity Date unless cash secured on terms satisfactory to
Bank.  Borrowers shall pay any standard issuance and other fees that
Bank notifies Borrowers will be charged for issuing and processing FX Contracts
for Borrowers.  The FX Amount shall at all times be equal to or less
than $1,000,000 minus any amounts outstanding under the Letter of Credit
Sublimit and the Cash Management Sublimit.  The “FX Amount” shall
equal the amount determined by multiplying (i) the aggregate amount, in United
States Dollars, of FX Contracts between Borrowers and Bank remaining outstanding
as of any date of determination by (ii) the applicable Foreign Exchange Reserve
Percentage as of such date.  The “Foreign Exchange Reserve Percentage”
shall be a percentage as determined by Bank, in its sole discretion from time to
time.  If at any time the Revolving Facility is terminated or
otherwise ceases to exist, Borrowers shall immediately secure in cash all
obligations under the Foreign Exchange Sublimit on terms acceptable to
Bank.

     

    
      
        
        

      

      
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    2.2         Overadvances.  If
the aggregate amount of the outstanding Advances plus any amounts
outstanding under the Letter of Credit Sublimit, the Cash Management Sublimit
and the Foreign Exchange Sublimit exceeds the lesser of the Revolving Line or
the Borrowing Base at any time, Borrowers shall immediately pay to Bank, in
cash, the amount of such excess.

     

    2.3         Interest Rates, Payments, and
Calculations.

     

    (a)          Interest
Rates.

     

    (i)           Advances.  Except as
set forth in Section 2.3(b), the Advances shall bear interest, on the
outstanding Daily Balance thereof, at a rate equal to two percent (2%) above the
Prime Rate.

     

    (b)          Late Fee; Default
Rate.  If any payment is not made within ten (10) days after
the date such payment is due, Borrowers shall pay Bank a late fee equal to the
lesser of (i) five percent (5%) of the amount of such unpaid amount or
(ii) the maximum amount permitted to be charged under applicable
law.  All Obligations shall bear interest, from and after the
occurrence and during the continuance of an Event of Default, at a rate equal to
five (5) percentage points above the interest rate applicable immediately prior
to the occurrence of the Event of Default.

     

    (c)          Payments.  Interest
hereunder shall be due and payable on the tenth calendar day of each month
during the term hereof.  Bank shall, at its option, charge such
interest, all Bank Expenses, and all Periodic Payments against any of Borrowers’
deposit accounts or against the Revolving Line, in which case those amounts
shall thereafter accrue interest at the rate then applicable
hereunder.  Any interest not paid when due shall be compounded by
becoming a part of the Obligations, and such interest shall thereafter accrue
interest at the rate then applicable hereunder.  All payments shall be
free and clear of any taxes, withholdings, duties, impositions or other charges,
to the end that Bank will receive the entire amount of any Obligations payable
hereunder, regardless of source of payment.  All payments shall be
made via auto debit from a Borrower’s account at Bank.

     

    (d)          Computation.  In the
event the Prime Rate is changed from time to time hereafter, the applicable rate
of interest hereunder shall be increased or decreased, effective as of the day
the Prime Rate is changed, by an amount equal to such change in the Prime
Rate.  All interest chargeable under the Loan Documents shall be
computed on the basis of a three hundred sixty (360) day year for the actual
number of days elapsed.

     

    2.4         Crediting
Payments.  Prior to the occurrence of an Event of Default, Bank
shall credit a wire transfer of funds, check or other item of payment to such
deposit account or Obligation as a Borrower specifies.  After the
occurrence of an Event of Default, the receipt by Bank of any wire transfer of
funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on
account unless such payment is of immediately available federal funds or unless
and until such check or other item of payment is honored when presented for
payment.  Notwithstanding anything to the contrary contained herein,
any wire transfer or payment received by Bank after 12:00 noon Pacific time
shall be deemed to have been received by Bank as of the opening of business on
the immediately following Business Day.  Whenever any payment to Bank
under the Loan Documents would otherwise be due (except by reason of
acceleration) on a date that is not a Business Day, such payment shall instead
be due on the next Business Day, and additional fees or interest, as the case
may be, shall accrue and be payable for the period of such
extension.

     

    2.5         Fees.  Borrowers
shall pay to Bank the following:

     

    (a)           Facility Fee.  On
the Closing Date, a Facility Fee equal to $10,000, which shall be nonrefundable;
and

     

    
      
        
        

      

      
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    (b)           Bank Expenses.  On
the Closing Date, all Bank Expenses incurred through the Closing Date, including
reasonable attorneys’ fees and expenses and, after the Closing Date, all Bank
Expenses, including reasonable attorneys’ fees and expenses, as and when they
are incurred by Bank.

     

    2.6         Term.  This
Agreement shall become effective on the Closing Date and, subject to
Section 12.7, shall continue in full force and effect for so long as any
Obligations remain outstanding or Bank has any obligation to make Credit
Extensions under this Agreement.  Notwithstanding the foregoing, Bank
shall have the right to terminate its obligation to make Credit Extensions under
this Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default.  Notwithstanding termination,
Bank’s Lien on the Collateral shall remain in effect for so long as any
Obligations are outstanding.

     

    3.           CONDITIONS OF
LOANS.

     

    3.1         Conditions Precedent to Initial
Credit Extension.  The obligation of Bank to make the initial
Credit Extension is subject to the condition precedent that Bank shall have
received, in form and substance satisfactory to Bank, the
following:

     

    (a)          this
Agreement;

     

    (b)          a
certificate of the Secretary of each Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this
Agreement;

     

    (c)          UCC
National Form Financing Statement for each Borrower;

     

    (d)          an
intellectual property security agreement for each Borrower;

     

    (e)          a
warrant to purchase stock from DCT;

     

    (f)           agreement
to provide insurance;

     

    (g)          payment
of the fees and Bank Expenses then due specified in Section 2.5
hereof;

     

    (h)          current
financial statements of each Borrower;

     

    (i)           an
audit of the Collateral by no later than February 2010, the results of
which shall be satisfactory to Bank; and

     

    (j)           such
other documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate.

     

    3.2         Conditions Precedent to all Credit
Extensions.  The obligation of Bank to make each Credit
Extension, including the initial Credit Extension, is further subject to the
following conditions:

     

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

     

    (b)           the
representations and warranties contained in Section 5 shall be true and
correct in all material respects on and as of the date of such Payment/Advance
Form and on the effective date of each Credit Extension as though made at and as
of each such date, and no Event of Default shall have occurred and be
continuing, or would exist after giving effect to such Credit
Extension.  The making of each Credit Extension shall be deemed to be
a representation and warranty by Borrowers on the date of such Credit Extension
as to the accuracy of the facts referred to in this
Section 3.2.

     

    
      
        
        

      

      
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    4.           CREATION OF SECURITY
INTEREST.

     

    4.1           Grant of Security
Interest.  Each Borrower grants and pledges to Bank a
continuing security interest in all presently existing and hereafter acquired or
arising Collateral in order to secure prompt repayment of any and all
Obligations and in order to secure prompt performance by Borrowers of each of
the covenants and duties under the Loan Documents.  Except as set
forth in the Schedule, such security interest constitutes a valid, first
priority security interest in the presently existing Collateral, and will
constitute a valid, first priority security interest in Collateral acquired
after the date hereof.

     

    4.2           Delivery of Additional Documentation
Required.  Borrowers shall from time to time execute and
deliver to Bank, at the request of Bank, all Negotiable Collateral, all
financing statements and other documents that Bank may reasonably request, in
form satisfactory to Bank, to perfect and continue the perfection of Bank’s
security interests in the Collateral and in order to fully consummate all of the
transactions contemplated under the Loan Documents.  Borrowers from
time to time may deposit with Bank specific time deposit accounts to secure
specific Obligations.  Each Borrower authorizes Bank to hold such
balances in pledge and to decline to honor any drafts thereon or any request by
a Borrower or any other Person to pay or otherwise transfer any part of such
balances for so long as the Obligations are outstanding.

     

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

     

    5.           REPRESENTATIONS AND
WARRANTIES.

     

    Each
Borrower represents and warrants as follows:

     

    5.1           Due Organization and
Qualification.  Borrower and each Subsidiary is a corporation
duly existing under the laws of its state of incorporation and qualified and
licensed to do business in any state in which the conduct of its business or its
ownership of property requires that it be so qualified.

     

    5.2           Due Authorization; No
Conflict.  The execution, delivery, and performance of the Loan
Documents are within Borrower’s powers, have been duly authorized, and are not
in conflict with nor constitute a breach of any provision contained in
Borrower’s Articles of Incorporation or Bylaws, nor will they constitute an
event of default under any material agreement to which Borrower is a party or by
which Borrower is bound.  Borrower is not in default under any
material agreement to which it is a party or by which it is bound.

     

    5.3           No Prior
Encumbrances.  Borrower has good and marketable title to its
property, free and clear of Liens, except for Permitted Liens.

     

    5.4           Bona Fide Eligible
Accounts.  The Eligible Accounts are bona fide existing
obligations.  The property and services giving rise to such Eligible
Accounts has been delivered or rendered to the account debtor or to the account
debtor’s agent for immediate and unconditional acceptance by the account
debtor.  Borrower has not received notice of actual or imminent
Insolvency Proceeding of any account debtor that is included in any Borrowing
Base Certificate as an Eligible Account.

     

    5.5           Merchantable
Inventory.  All Inventory is in all material respects of good
and marketable quality, free from all material defects, except for Inventory for
which adequate reserves have been made.

     

    5.6           Intellectual Property
Collateral.  Borrower is the sole owner of the Intellectual
Property Collateral, except for non-exclusive licenses granted by Borrower to
its customers in the ordinary course of business.  Each of the Patents
is valid and enforceable, and no part of the Intellectual Property Collateral
has been judged invalid or unenforceable, in whole or in part, and no claim has
been made that any part of the Intellectual Property Collateral violates the
rights of any third party.  Except as set forth in the Schedule,
Borrower’s rights as a licensee of intellectual property do not give rise to
more than five percent (5%) of its gross revenue in any given month, including
without limitation revenue derived from the sale, licensing, rendering or
disposition of any product or service.  Except as set forth in the
Schedule, Borrower is not a party to, or bound by, any agreement that restricts
the grant by Borrower of a security interest in Borrower’s rights under such
agreement.

     

    
      
        
        

      

      
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    5.7           Name; Location of Chief Executive
Office.  Except as disclosed in the Schedule, Borrower has not
done business under any name other than that specified on the signature page
hereof.  The chief executive office of Borrower is located at the
address indicated in Section 10 hereof.  All Borrower’s Inventory
and Equipment is located only at the location set forth in Section 10
hereof.

     

    5.8           Litigation.  Except
as set forth in the Schedule, there are no actions or proceedings pending by or
against Borrower or any Subsidiary before any court or administrative
agency.

     

    5.9           No Material Adverse Change in
Financial Statements.  All consolidated and consolidating
financial statements related to Borrower and any Subsidiary that Bank has
received from Borrower fairly present in all material respects Borrower’s
financial condition as of the date thereof and Borrower’s consolidated and
consolidating results of operations for the period then ended.  There
has not been a material adverse change in the consolidated or the consolidating
financial condition of Borrower since the date of the most recent of such
financial statements submitted to Bank.

     

    5.10        Solvency, Payment of
Debts.  Borrower is solvent and able to pay its debts
(including trade debts) as they mature.

     

    5.11        Regulatory
Compliance.  Borrower and each Subsidiary have met the minimum
funding requirements of ERISA with respect to any employee benefit plans subject
to ERISA, and no event has occurred resulting from Borrower’s failure to comply
with ERISA that could result in Borrower’s incurring any material
liability.  Borrower is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940.  Borrower is not engaged principally, or as one
of the important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulations T
and U of the Board of Governors of the Federal Reserve
System).  Borrower has complied with all the provisions of the Federal
Fair Labor Standards Act.  Borrower has not violated any statutes,
laws, ordinances or rules applicable to it.

     

    5.12        Environmental
Condition.  Except as disclosed in the Schedule, none of
Borrower’s or any Subsidiary’s properties or assets has ever been used by
Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous
owners or operators, in the disposal of, or to produce, store, handle, treat,
release, or transport, any hazardous waste or hazardous substance other than in
accordance with applicable law; to the best of Borrower’s knowledge, none of
Borrower’s properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a hazardous waste or
hazardous substance disposal site, or a candidate for closure pursuant to any
environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste
or hazardous substances into the environment.

     

    5.13        Taxes.  Borrower and
each Subsidiary have filed or caused to be filed all tax returns required to be
filed, and have paid, or have made adequate provision for the payment of, all
taxes reflected therein.

     

    5.14        Subsidiaries.  Borrower
does not own any stock, partnership interest or other equity securities of any
Person, except for Permitted Investments.

     

    5.15        Government
Consents.  Borrower and each Subsidiary have obtained all
material consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all governmental authorities that are
necessary for the continued operation of Borrower’s business as currently
conducted.

     

    
      
        
        

      

      
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    5.16        Accounts.  None of
Borrower’s nor any Subsidiary’s property is maintained or invested with a Person
other than Bank.

     

    5.17        Full Disclosure.  No
representation, warranty or other statement made by Borrower in any certificate
or written statement furnished to Bank contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained in such certificates or statements not
misleading.

     

    6.           AFFIRMATIVE
COVENANTS.

     

    Each
Borrower shall do all of the following:

     

    6.1           Good
Standing.  Borrower shall maintain its and each of its
Subsidiaries’ corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which it is
required under applicable law.  Borrower shall maintain, and shall
cause each of its Subsidiaries to maintain, in force all licenses, approvals and
agreements required under applicable law.

     

    6.2           Government
Compliance.  Borrower shall meet, and shall cause each
Subsidiary to meet, the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA.  Borrower shall comply,
and shall cause each Subsidiary to comply, with all statutes, laws, ordinances
and government rules and regulations to which it is subject.

     

    6.3           Financial Statements, Reports,
Certificates.  Borrower shall deliver the following to
Bank:  (a) as soon as available, but in any event within
twenty-five (25) days after the end of each calendar month, a company prepared
consolidated balance sheet, income, and cash flow statement covering Borrower’s
consolidated operations during such period, prepared in accordance with GAAP,
consistently applied, in a form acceptable to Bank and certified by a
Responsible Officer; (b) copies of all statements, reports and notices sent
or made available generally by Borrower to its security holders or to any
holders of Subordinated Debt; (c) within five days of the filing date all
reports on Forms 10-K, 10-Q, and 8K filed with the Securities and Exchange
Commission (for purposes hereof the filing of such documents via the SEC’s Edgar
filing system shall be deemed to be sufficient delivery to Bank);
(d) promptly upon receipt of notice thereof, a report of any legal actions
pending or threatened against Borrower or any Subsidiary that could result in
damages or costs to Borrower or any Subsidiary of Fifty Thousand Dollars
($50,000) or more; and (e) within thirty (30) days prior to each fiscal
year end a company prepared operating budget for the next fiscal year; and
(f) such other budgets, sales projections, operating plans or other
financial information as Bank may reasonably request from time to
time.

     

    Within
twenty five (25) days after the last day of each month, Borrower shall deliver
to Bank a Borrowing Base Certificate signed by a Responsible Officer in
substantially the form of Exhibit C hereto,
together with aged listings of accounts receivable and accounts payable and a
statement of deferred revenues.

     

    Borrower
shall deliver to Bank with the monthly financial statements a Compliance
Certificate signed by a Responsible Officer in substantially the form of Exhibit D
hereto.

     

    Bank
shall have a right from time to time hereafter to audit Borrower’s Accounts and
appraise Collateral at Borrower’s reasonable expense (not to exceed $5,000),
provided that such audits will be conducted no more often than every six (6)
months unless an Event of Default has occurred and is
continuing.  Notwithstanding the foregoing, the initial collateral
audit is due no later than February 2010.

     

    6.4           Inventory;
Returns.  Borrower shall keep all Inventory in good and
marketable condition, free from all material defects except for Inventory for
which adequate reserves have been made.  Returns and allowances, if
any, as between Borrower and its account debtors shall be on the same basis and
in accordance with the usual customary practices of Borrower, as they exist at
the time of the execution and delivery of this Agreement.  Borrower
shall promptly notify Bank of all returns and recoveries and of all disputes and
claims, where the return, recovery, dispute or claim involves more than Fifty
Thousand Dollars ($50,000).

     

    
      
        
        

      

      
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    6.5          Taxes.  Borrower
shall make, and shall cause each Subsidiary to make, due and timely payment or
deposit of all material federal, state, and local taxes, assessments, or
contributions required of it by law, and will execute and deliver to Bank, on
demand, appropriate certificates attesting to the payment or deposit thereof;
and Borrower will make, and will cause each Subsidiary to make, timely payment
or deposit of all material tax payments and withholding taxes required of it by
applicable laws, including, but not limited to, those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal income taxes, and
will, upon request, furnish Bank with proof satisfactory to Bank indicating that
Borrower or a Subsidiary has made such payments or deposits; provided that
Borrower or a Subsidiary need not make any payment if the amount or validity of
such payment is contested in good faith by appropriate proceedings and is
reserved against (to the extent required by GAAP) by Borrower.

     

    6.6          Insurance.

     

    (a)           Borrower,
at its expense, shall keep the Collateral insured against loss or damage by
fire, theft, explosion, sprinklers, and all other hazards and risks, and in such
amounts, as ordinarily insured against by other owners in similar businesses
conducted in the locations where Borrower’s business is conducted on the date
hereof.  Borrower shall also maintain insurance relating to Borrower’s
business, ownership and use of the Collateral in amounts and of a type that are
customary to businesses similar to Borrower’s.

     

    (b)           All
such policies of insurance shall be in such form, with such companies, and in
such amounts as are reasonably satisfactory to Bank.  All such
policies of property insurance shall contain a lender’s loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee thereof, and all liability insurance policies shall show the Bank as an
additional insured and shall specify that the insurer must give at least twenty
(20) days notice to Bank before canceling its policy for any
reason.  Upon Bank’s request, Borrower shall deliver to Bank certified
copies of such policies of insurance and evidence of the payments of all
premiums therefor.  All proceeds payable under any such policy shall,
at the option of Bank, be payable to Bank to be applied on account of the
Obligations.

     

    6.7          Accounts.  Borrower
shall maintain and shall cause each of its Subsidiaries to maintain its primary
depository, operating, and investment accounts with Bank.

     

    6.8          Quick
Ratio.  Borrowers shall maintain at all times a ratio of Quick
Assets to Current Liabilities less deferred revenue, and
warrant liability, including all Obligations owing by Borrowers to Bank, of at
least 1.25 to 1.00.

     

    6.9          Tangible Net
Worth.  Borrowers shall maintain at all times a Tangible Net
Worth plus Subordinated Debt of at least One Million Three Hundred Fifty
Thousand Dollars ($1,350,000), plus (i) fifty percent (50%) of any future
equity raises plus (ii) fifty percent (50%) of any future Subordinated Debt
raised plus (iii) twenty five percent (25%) of Borrowers’ quarterly net
profit after tax.

     

    6.10       Intellectual Property
Rights.

     

    (a)           Borrower
shall promptly give Bank written notice of any applications or registrations of
intellectual property rights filed with the United States Patent and Trademark
Office, including the date of such filing and the registration or application
numbers, if any.  Borrower shall (i) give Bank not less than 30 days
prior written notice of the filing of any applications or registrations with the
United States Copyright Office, including the title of such intellectual
property rights to be registered, as such title will appear on such applications
or registrations, and the date such applications or registrations will be filed,
and (ii) prior to the filing of any such applications or registrations, shall
execute such documents as Bank may reasonably request for Bank to maintain its
perfection in such intellectual property rights to be registered by Borrower,
and upon the request of Bank, shall file such documents simultaneously with the
filing of any such applications or registrations.  Upon filing any
such applications or registrations with the United States Copyright Office,
Borrower shall promptly provide Bank with (i) a copy of such applications or
registrations, without the exhibits, if any, thereto, (ii) evidence of the
filing of any documents requested by Bank to be filed for Bank to maintain the
perfection and priority of its security interest in such intellectual property
rights, and (iii) the date of such filing.

     

    
      
        
        

      

      
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    (b)           Bank
may audit Borrower's Intellectual Property Collateral to confirm compliance with
this Section, provided such audit may not occur more often than twice per year,
unless an Event of Default has occurred and is continuing.  Bank shall
have the right, but not the obligation, to take, at Borrower's sole expense, any
actions that Borrower is required under this Section to take but which Borrower
fails to take, after 15 days' notice to Borrower.  Borrower shall
reimburse and indemnify Bank for all reasonable costs and reasonable expenses
incurred in the reasonable exercise of its rights under this
Section.

     

    6.11       Further
Assurances.  At any time and from time to time Borrower shall
execute and deliver such further instruments and take such further action as may
reasonably be requested by Bank to effect the purposes of this
Agreement.

     

    7.           NEGATIVE
COVENANTS.

     

    Each
Borrower will not do any of the following:

     

    7.1           Dispositions.  Convey,
sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”), or
permit any of its Subsidiaries to Transfer, all or any part of its business or
property, other than:  (i) Transfers of Inventory in the ordinary
course of business; (ii) Transfers of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; or (iii) Transfers of worn-out or obsolete
Equipment which was not financed by Bank.

     

    7.2           Change in Business; Change in Control
or Executive Office.  Engage in any business, or permit any of
its Subsidiaries to engage in any business, other than the businesses currently
engaged in by Borrower and any business substantially similar or related thereto
(or incidental thereto); or cease to conduct business in the manner conducted by
Borrower as of the Closing Date; or suffer or permit a Change in Control; or
without thirty (30) days prior written notification to Bank, relocate its chief
executive office or state of incorporation or change its legal name; or without
Bank’s prior written consent, change the date on which its fiscal year
ends.

     

    7.3           Mergers or
Acquisitions.  Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another
Person.

     

    7.4           Indebtedness.  Create,
incur, assume or be or remain liable with respect to any Indebtedness, or permit
any Subsidiary so to do, other than Permitted Indebtedness.

     

    7.5           Encumbrances.  Create,
incur, assume or suffer to exist any Lien with respect to any of its property,
or assign or otherwise convey any right to receive income, including the sale of
any Accounts, or permit any of its Subsidiaries so to do, except for Permitted
Liens, or agree with any Person other than Bank not to grant a security interest
in, or otherwise encumber, any of its property, or permit any Subsidiary to do
so.

     

    7.6           Distributions.  Pay
any dividends or make any other distribution or payment on account of or in
redemption, retirement or purchase of any capital stock, or permit any of its
Subsidiaries to do so, except that Borrower may repurchase the stock of former
employees pursuant to stock repurchase agreements as long as an Event of Default
does not exist prior to such repurchase or would not exist after giving effect
to such repurchase.

     

    7.7           Investments.  Directly
or indirectly acquire or own, or make any Investment in or to any Person, or
permit any of its Subsidiaries so to do, other than Permitted Investments; or
maintain or invest any of its property with a Person other than Bank or permit
any of its Subsidiaries to do so unless such Person has entered into an account
control agreement with Bank in form and substance satisfactory to Bank; or
suffer or permit any Subsidiary to be a party to, or be bound by, an agreement
that restricts such Subsidiary from paying dividends or otherwise distributing
property to Borrower.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    7.8           Transactions with
Affiliates.  Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower except for
transactions that are in the ordinary course of Borrower’s business, upon fair
and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated
Person.

     

    7.9           Subordinated
Debt.  Make any payment in respect of any Subordinated Debt, or
permit any of its Subsidiaries to make any such payment, except in compliance
with the terms of such Subordinated Debt, or amend any provision contained in
any documentation relating to the Subordinated Debt without Bank’s prior written
consent.

     

    7.10        Inventory and Equipment. Store
the Inventory or the Equipment with a bailee, warehouseman, or other third party
unless the third party has been notified of Bank’s security interest and Bank
(a) has received an acknowledgment from the third party that it is holding or
will hold the Inventory or Equipment for Bank’s benefit or (b) is in pledge
possession of the warehouse receipt, where negotiable, covering such Inventory
or Equipment. Store or maintain any Equipment or Inventory at a location other
than the location set forth in Section 10 of this Agreement.

     

    7.11        Compliance.  Become
an “investment company” or be controlled by an “investment company,” within the
meaning of the Investment Company Act of 1940, or become principally engaged in,
or undertake as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying margin stock, or use the
proceeds of any Credit Extension for such 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 law or regulation, which violation could have
a Material Adverse Effect, or a material adverse effect on the Collateral or the
priority of Bank’s Lien on the Collateral, or permit any of its Subsidiaries to
do any of the foregoing.

     

    8.           EVENTS OF
DEFAULT.

     

    Any one
or more of the following events shall constitute an Event of Default by
Borrowers under this Agreement:

     

    8.1         Payment Default.  If
Borrowers fail to pay, when due, any of the Obligations;

     

    8.2         Covenant Default.

     

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

     

    (b)           If
a Borrower fails or neglects to perform or observe any other material term,
provision, condition, covenant contained in this Agreement, in any of the Loan
Documents, or in any other present or future agreement between a Borrower and
Bank and as to any default under such other term, provision, condition or
covenant that can be cured, has failed to cure such default within ten days
after a Borrower receives notice thereof or any officer of a Borrower becomes
aware thereof; provided, however, that if the default cannot by its nature be
cured within the ten day period or cannot after diligent attempts by such
Borrower be cured within such ten day period, and such default is likely to be
cured within a reasonable time, then such Borrower shall have an additional
reasonable period (which shall not in any case exceed 30 days) to attempt to
cure such default, and within such reasonable time period the failure to have
cured such default shall not be deemed an Event of Default but no Credit
Extensions will be made.

     

    8.3           Material Adverse
Effect.  If there occurs any circumstance or circumstances that
could have a Material Adverse Effect;

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    8.4           Attachment.  If any
portion of a Borrower’s assets is attached, seized, subjected to a writ or
distress warrant, or is levied upon, or comes into the possession of any
trustee, receiver or person acting in a similar capacity and such attachment,
seizure, writ or distress warrant or levy has not been removed, discharged or
rescinded within ten (10) days, or if a Borrower is enjoined, restrained, or in
any way prevented by court order from continuing to conduct all or any material
part of its business affairs, or if a judgment or other claim becomes a lien or
encumbrance upon any material portion of a Borrower’s assets, or if a notice of
lien, levy, or assessment is filed of record with respect to any of a Borrower’s
assets by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental
agency, and the same is not paid within ten (10) days after a Borrower receives
notice thereof, provided that none of the foregoing shall constitute an Event of
Default where such action or event is stayed or an adequate bond has been posted
pending a good faith contest by such Borrower (provided that no Credit
Extensions will be required to be made during such cure period);

     

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

     

    8.6           Other
Agreements.  If there is a default or other failure to perform
in any agreement to which a Borrower is a party or by which it is bound
resulting in a right by a third party or parties, whether or not exercised, to
accelerate the maturity of any Indebtedness in an amount in excess of Fifty
Thousand Dollars ($50,000) or which could have a Material Adverse
Effect;

     

    8.7           Judgments.  If a
judgment or judgments for the payment of money in an amount, individually or in
the aggregate, of at least Fifty Thousand Dollars ($50,000) shall be rendered
against a Borrower and shall remain unsatisfied and unstayed for a period of ten
(10) days (provided that no Credit Extensions will be made prior to the
satisfaction or stay of such judgment); or

     

    8.8           Misrepresentations.  If
any material misrepresentation or material misstatement exists now or hereafter
in any warranty or representation set forth herein or in any certificate
delivered to Bank by any Responsible Officer pursuant to this Agreement or to
induce Bank to enter into this Agreement or any other Loan
Document.

     

    9.           BANK’S RIGHTS AND
REMEDIES.

     

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

     

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

     

    (b)           Cease
advancing money or extending credit to or for the benefit of a Borrower under
this Agreement or under any other agreement between a Borrower and
Bank;

     

    (c)           Settle
or adjust disputes and claims directly with account debtors for amounts, upon
terms and in whatever order that Bank reasonably considers
advisable;

     

    (d)           Make
such payments and do such acts as Bank considers necessary or reasonable to
protect its security interest in the Collateral.  Each Borrower agrees
to assemble the Collateral if Bank so requires, and to make the Collateral
available to Bank as Bank may designate.  Each Borrower authorizes
Bank to enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase, contest,
or compromise any encumbrance, charge, or lien which in Bank’s determination
appears to be prior or superior to its security interest and to pay all expenses
incurred in connection therewith.  With respect to any of a Borrower’s
owned premises, each Borrower hereby grants Bank a license to enter into
possession of such premises and to occupy the same, without charge, in order to
exercise any of Bank’s rights or remedies provided herein, at law, in equity, or
otherwise;

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (e)           Set
off and apply to the Obligations any and all (i) balances and deposits of a
Borrower held by Bank, or (ii) indebtedness at any time owing to or for the
credit or the account of a Borrower held by Bank;

     

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

     

    (g)          Dispose
of the Collateral by way of one or more contracts or transactions, for cash or
on terms, in such manner and at such places (including a Borrower’s premises) as
Bank determines is commercially reasonable, and apply any proceeds to the
Obligations in whatever manner or order Bank deems appropriate;

     

    (h)          Bank
may credit bid and purchase at any public sale; and

     

    (i)           Any
deficiency that exists after disposition of the Collateral as provided above
will be paid immediately by Borrowers.

     

    9.2           Power of
Attorney.  Effective only upon the occurrence and during the
continuance of an Event of Default, each Borrower hereby irrevocably appoints
Bank (and any of Bank’s designated officers, or employees) as such Borrower’s
true and lawful attorney to:  (a) send requests for verification of
Accounts or notify account debtors of Bank’s security interest in the Accounts;
(b) endorse a Borrower’s name on any checks or other forms of payment or
security that may come into Bank’s possession; (c) sign a Borrower’s name on any
invoice or bill of lading relating to any Account, drafts against account
debtors, schedules and assignments of Accounts, verifications of Accounts, and
notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and
adjust all claims under and decisions with respect to a Borrower’s policies of
insurance; (f) settle and adjust disputes and claims respecting the accounts
directly with account debtors, for amounts and upon terms which Bank determines
to be reasonable; and (g) to file, in its sole discretion, one or more financing
or continuation statements and amendments thereto, relative to any of the
Collateral.  The appointment of Bank as a Borrower’s attorney in fact,
and each and every one of Bank’s rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully repaid and
performed and Bank’s obligation to provide Credit Extensions hereunder is
terminated.

     

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

     

    9.4           Bank Expenses.  If a
Borrower fails to pay any amounts or furnish any required proof of payment due
to third persons or entities, as required under the terms of this Agreement,
then Bank may do any or all of the following after reasonable notice to such
Borrower:  (a) make payment of the same or any part thereof;
(b) set up such reserves under a loan facility in Section 2.1 as Bank deems
necessary to protect Bank from the exposure created by such failure; or
(c) obtain and maintain insurance policies of the type discussed in
Section 6.6 of this Agreement, and take any action with respect to such
policies as Bank deems prudent.  Any amounts so paid or deposited by
Bank shall constitute Bank Expenses, shall be immediately due and payable, and
shall bear interest at the then applicable rate hereinabove provided, and shall
be secured by the Collateral.  Any payments made by Bank shall not
constitute an agreement by Bank to make similar payments in the future or a
waiver by Bank of any Event of Default under this Agreement.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    9.5           Bank’s Liability for
Collateral.  So long as Bank complies with reasonable banking
practices, Bank shall not in any way or manner be liable or responsible
for:  (a) the safekeeping of the Collateral; (b) any loss or
damage thereto occurring or arising in any manner or fashion from any cause;
(c) any diminution in the value thereof; or (d) any act or default of
any carrier, warehouseman, bailee, forwarding agency, or other person
whomsoever.  All risk of loss, damage or destruction of the Collateral
shall be borne by Borrowers.

     

    9.6           Remedies
Cumulative.  Bank’s rights and remedies under this Agreement,
the Loan Documents, and all other agreements shall be
cumulative.  Bank shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in
equity.  No exercise by Bank of one right or remedy shall be deemed an
election, and no waiver by Bank of any Event of Default on a Borrower’s part
shall be deemed a continuing waiver.  No delay by Bank shall
constitute a waiver, election, or acquiescence by it.  No waiver by
Bank shall be effective unless made in a written document signed on behalf of
Bank and then shall be effective only in the specific instance and for the
specific purpose for which it was given.

     

    9.7           Demand;
Protest.  Each Borrower waives demand, protest, notice of
protest, 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
guarantees at any time held by Bank on which a Borrower may in any way be
liable.

     

    10.         NOTICES.

     

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

     

    
      
        
          
            
              	
                      If
      to a Borrower:

                    	
                      Document
      Capture Technologies, Inc.

                    
	 
      	
                      Syscan,
      Inc.

                    
	 
      	
                      1798
      Technology Drive, Suite 178

                    
	 
      	
                      San
      Jose, CA 95110

                    
	 
      	
                      Attn:  Carolyn
      Ellis, CFO

                    
	 
      	
                      Email:  cellis@docucap.com

                    
	 	 
	
                      If
      to Bank:

                    	
                      Bridge
      Bank, National Association

                    
	 
      	
                      55
      Almaden Boulevard

                    
	 
      	
                      San
      Jose, CA 95113

                    
	 
      	
                      Attn:  Technology
      Division

                    
	 
      	
                      FAX:  (408)
      282-1681

                    

            

          

        

      

    

     

    The
parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the
other.

     

    11.         CHOICE OF LAW AND VENUE; JURY TRIAL
WAIVER.

     

    This
Agreement and all Loan Documents unless otherwise specified therein shall be
governed by, and construed in accordance with, the internal laws of the State of
California, without regard to principles of conflicts of
law.  Borrowers and Bank hereby submit to the exclusive jurisdiction
of the state and Federal courts located in the County of Santa Clara, State of
California.  BORROWERS AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS.  EACH PARTY RECOGNIZES AND AGREES THAT
THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT.  EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

     

    
      
        
        

      

      
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    If the
jury waiver set forth in Section is not enforceable, then any dispute,
controversy or claim arising out of or relating to this Agreement, the Loan
Documents or any of the transactions contemplated therein shall be settled by
judicial reference pursuant to Code of Civil Procedure Section 638 et seq.
before a referee sitting without a jury, such referee to be mutually acceptable
to the parties or, if no agreement is reached, by a referee appointed by the
Presiding Judge of the California Superior Court for Santa Clara
County.  This Section shall not restrict a party from exercising
remedies under the Code or from exercising pre-judgment remedies under
applicable law.

     

    12.         GENERAL
PROVISIONS.

     

    12.1        Successors and
Assigns.  This Agreement shall bind and inure to the benefit of
the respective successors and permitted assigns of each of the parties;
provided, however, that neither this Agreement nor any rights hereunder may be
assigned by a Borrower without Bank’s prior written consent, which consent may
be granted or withheld in Bank’s sole discretion.  Bank shall have the
right without the consent of or notice to Borrowers to sell, transfer,
negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights and benefits hereunder.

     

    12.2        Indemnification.  Each
Borrower shall defend, indemnify and hold harmless Bank and its officers,
employees, and agents against:  (a) all obligations, demands,
claims, and liabilities claimed or asserted by any other party in connection
with the transactions contemplated by this Agreement; and (b) all losses or
Bank Expenses in any way suffered, incurred, or paid by Bank as a result of or
in any way arising out of, following, or consequential to transactions between
Bank and Borrowers whether under this Agreement, or otherwise (including without
limitation reasonable attorneys’ fees and expenses), except for losses caused by
Bank’s gross negligence or willful misconduct.

     

    12.3        Time of
Essence.  Time is of the essence for the performance of all
obligations set forth in this Agreement.

     

    12.4        Severability of
Provisions.  Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

     

    12.5        Amendments in Writing,
Integration.  Neither this Agreement nor the Loan Documents can
be amended or terminated orally.  All prior agreements,
understandings, representations, warranties, and negotiations between the
parties hereto with respect to the subject matter of this Agreement and the Loan
Documents, if any, are merged into this Agreement and the Loan
Documents.

     

    12.6        Counterparts.  This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.

     

    12.7        Survival.  All
covenants, representations and warranties made in this Agreement shall continue
in full force and effect so long as any Obligations remain outstanding or Bank
has any obligation to make Credit Extensions to Borrower.  The
obligations of Borrowers to indemnify Bank with respect to the expenses,
damages, losses, costs and liabilities described in Section 12.2 shall
survive until all applicable statute of limitations periods with respect to
actions that may be brought against Bank have run.

     

    12.8        Confidentiality.  In
handling any confidential information Bank and all employees and agents of Bank,
including but not limited to accountants, shall exercise the same degree of care
that it exercises with respect to its own proprietary information of the same
types to maintain the confidentiality of any non-public information thereby
received or received pursuant to this Agreement except that disclosure of such
information may be made (i) to the subsidiaries or affiliates of Bank in
connection with their present or prospective business relations with a Borrower,
(ii) to prospective transferees or purchasers of any interest in the Credit
Extensions, provided that they have entered into a comparable confidentiality
agreement in favor of such Borrower and have delivered a copy to such Borrower,
(iii) as required by law, regulations, rule or order, subpoena, judicial
order or similar order, (iv) as may be required in connection with the
examination, audit or similar investigation of Bank and (v) as Bank may
determine in connection with the enforcement of any remedies
hereunder.  Confidential information hereunder shall not include
information that either:  (a) is in the public domain or in the
knowledge or possession of Bank when disclosed to Bank, or becomes part of the
public domain after disclosure to Bank through no fault of Bank; or (b) is
disclosed to Bank by a third party, provided Bank does not have actual knowledge
that such third party is prohibited from disclosing such
information.

     

    
      
        
        

      

      
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    12.9        Patriot Act.  To
help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an
account.  WHAT THIS MEANS FOR YOU:  when you open an
account, we will ask your name, address, date of birth, and other information
that will allow us to identify you.  We may also ask to see your
driver’s license or other identifying documents.

     

    13.         CO-BORROWER
PROVISIONS.

     

    13.1        Primary
Obligation.  This Agreement is a primary and original
obligation of each Borrower and shall remain in effect notwithstanding future
changes in conditions, including any change of law or any invalidity or
irregularity in the creation or acquisition of any Obligations or in the
execution or delivery of any agreement between Bank and any
Borrower.  Each Borrower shall be liable for existing and future
Obligations as fully as if all of all Credit Extensions were advanced to such
Borrower.  Bank may rely on any certificate or representation made by
any Borrower as made on behalf of, and binding on, all Borrowers, including
without limitation Revolving Advance Request, Borrowing Base Certificates and
Compliance Certificates.

     

    13.2        Enforcement of
Rights.  Borrowers are jointly and severally liable for the
Obligations and Bank may proceed against one or more of the Borrowers to enforce
the Obligations without waiving its right to proceed against any of the other
Borrowers.

     

    13.3        Borrowers as
Agents.  Each Borrower appoints the other Borrower as its agent
with all necessary power and authority to give and receive notices, certificates
or demands for and on behalf of both Borrowers, to act as disbursing agent for
receipt of any Credit Extensions on behalf of each Borrower and to apply to Bank
on behalf of each Borrower for Credit Extensions, any waivers and any
consents.  This authorization cannot be revoked, and Bank need not
inquire as to each Borrower’s authority to act for or on behalf of
Borrower.

     

    13.4        Subrogation and Similar
Rights.  Notwithstanding any other provision of this Agreement
or any other Loan Document, each Borrower irrevocably waives all rights that it
may have at law or in equity (including, without limitation, any law subrogating
the Borrower to the rights of Bank under the Loan Documents) to seek
contribution, indemnification, or any other form of reimbursement from any other
Borrower, or any other Person now or hereafter primarily or secondarily liable
for any of the Obligations, for any payment made by the Borrower with respect to
the Obligations in connection with the Loan Documents or otherwise and all
rights that it might have to benefit from, or to participate in, any security
for the Obligations as a result of any payment made by the Borrower with respect
to the Obligations in connection with the Loan Documents or
otherwise.  Any agreement providing for indemnification, reimbursement
or any other arrangement prohibited under this Section 14.4 shall be null and
void.  If any payment is made to a Borrower in contravention of this
Section 14.4, such Borrower shall hold such payment in trust for Bank and such
payment shall be promptly delivered to Bank for application to the Obligations,
whether matured or unmatured.

     

    13.5        Waivers of
Notice.  Except as otherwise provided in this Agreement, each
Borrower waives notice of acceptance hereof; notice of the existence, creation
or acquisition of any of the Obligations; notice of an Event of Default; notice
of the amount of the Obligations outstanding at any time; notice of intent to
accelerate; notice of acceleration; notice of any adverse change in the
financial condition of any other Borrower or of any other fact that might
increase the Borrower’s risk; presentment for payment; demand; protest and
notice thereof as to any instrument; default; and all other notices and demands
to which the Borrower would otherwise be entitled.  Each Borrower
waives any defense arising from any defense of any other Borrower, or by reason
of the cessation from any cause whatsoever of the liability of any other
Borrower.  Bank’s failure at any time to require strict performance by
any Borrower of any provision of the Loan Documents shall not waive, alter or
diminish any right of Bank thereafter to demand strict compliance and
performance therewith.  Nothing contained herein shall prevent Bank
from foreclosing on the Lien of any deed of trust, mortgage or other security
instrument, or exercising any rights available thereunder, and the exercise of
any such rights shall not constitute a legal or equitable discharge of any
Borrower.  Each Borrower also waives any defense arising from any act
or omission of Bank that changes the scope of the Borrower’s risks
hereunder.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    13.6       Subrogation
Defenses.  Each Borrower hereby waives any defense based on
impairment or destruction of its subrogation or other rights against any other
Borrower and waives all benefits which might otherwise be available to it under
California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850,
2899, and 3433 and California Code of Civil Procedure Sections 580a, 580b, 580d
and 726, as those statutory provisions are now in effect and hereafter amended,
and under any other similar statutes now and hereafter in effect.

     

    13.7       Right to Settle,
Release.

     

    (a)           The
liability of Borrowers hereunder shall not be diminished by (i) any agreement,
understanding or representation that any of the Obligations is or was to be
guaranteed by another Person or secured by other property, or (ii) any release
or unenforceability, whether partial or total, of rights, if any, which Bank may
now or hereafter have against any other Person, including another Borrower, or
property with respect to any of the Obligations.

     

    (b)           Without
affecting the liability of any Borrower hereunder, Bank may (i) compromise,
settle, renew, extend the time for payment, change the manner or terms of
payment, discharge the performance of, decline to enforce, or release all or any
of the Obligations with respect to a Borrower, (ii) grant other indulgences to a
Borrower in respect of the Obligations, (iii) modify in any manner any documents
relating to the Obligations with respect to a Borrower, (iv) release, surrender
or exchange any deposits or other property securing the Obligations, whether
pledged by a Borrower or any other Person, or (v) compromise, settle, renew, or
extend the time for payment, discharge the performance of, decline to enforce,
or release all or any obligations of any guarantor, endorser or other Person who
is now or may hereafter be liable with respect to any of the
Obligations.

     

    13.8       Subordination.  All
indebtedness of a Borrower now or hereafter arising held by another Borrower is
subordinated to the Obligations and the Borrower holding the indebtedness shall
take all actions reasonably requested by Lender to effect, to enforce and to
give notice of such subordination.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          	 
      	
                                                                  DOCUMENT
      CAPTURE TECHNOLOGIES, INC.

                                                                
	 	 
	 
      	
                                                                  By:

                                                                	   
      
	 	 	 
	 
      	
                                                                  Name:

                                                                	 
      
	 	 	 
	 
      	
                                                                  Title:

                                                                	 
      
	 
      	 
      	 
      
	 
      	
                                                                  SYSCAN,
      INC.

                                                                
	 	 
	 
      	
                                                                  By:

                                                                	 
      
	 	 	 
	 
      	
                                                                  Name:

                                                                	 
      
	 	 	 
	 
      	
                                                                  Title:

                                                                	 
      
	 
      	 
      	 
      
	 
      	
                                                                  BRIDGE
      BANK, NATIONAL ASSOCIATION

                                                                
	 	 
	 
      	
                                                                  By:

                                                                	 
      
	 	 	 
	 
      	
                                                                  Name: 

                                                                	 
      
	 	 	 
	 
      	
                                                                  Title:

                                                                	 
      

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      
        	
                DEBTOR:

              	
                DOCUMENT
      CAPTURE TECHNOLOGIES, INC.

              
	
                DEBTOR:

              	
                SYSCAN,
      INC.

              
	 
      	 
      
	
                SECURED
      PARTY:

              	
                BRIDGE
      BANK, NATIONAL ASSOCIATION

              

      

    

     

    EXHIBIT
A

     

    COLLATERAL
DESCRIPTION ATTACHMENT

    TO
LOAN AND SECURITY AGREEMENT

     

    All
personal property of a Borrower (herein referred to as “Borrower” or “Debtor”)
whether presently existing or hereafter created or acquired, and wherever
located, including, but not limited to:

     

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

     

    (b)           any
and all cash proceeds and/or noncash proceeds of any of the foregoing,
including, without limitation, insurance proceeds, and all supporting
obligations and the security therefor or for any right to
payment.  All terms above have the meanings given to them in the
California Uniform Commercial Code, as amended or supplemented from time to
time.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    REVOLVING
ADVANCE REQUEST

    (To
be submitted no later than 2:00 PM to be considered for same day
processing)

    

    
      
        	
                To:

              	
                Bridge
      Bank, National Association

              

      

    

    

    
      
        	
                Fax:

              	
                (408)
      282-1681

              

      

    

    

    
      
        	
                Date:

              	 
      

      

    

    

    
      
        
          
            	
                    From:

                  	
                    Document
      Capture Technologies, Inc.

                    Syscan,
      Inc.

                  
	 	Borrower's
      Name 

          

        

      

    

     

    
      
        
          
            
              
                	 
      	 
      
	 	
                        Authorized
      Signature

                      

              

            

          

        

      

       

      
        
          
            
              
                
                  	 
      	 
      
	 
      	
                          Authorized
      Signer's Name (please
print)

                        

                

              

            

          

        

      

       

      
        
          
            
              
                	 
      	 
      
	 
      	
                        Phone
      Number

                      

              

            

          

        

      

    

    

    
      
        
          	
                  To Account #    

                	 
      

        

      

    

    

    Borrower
hereby requests funding in the amount of $ _______ in accordance with the
Advance as defined in the Loan and Security Agreement dated September 2,
2009.

    

    Borrower
hereby authorizes Lender to rely on facsimile stamp signatures and treat them as
authorized by Borrower for the purpose of requesting the above
advance.

    

    All
representations and warranties of Borrower stated in the Loan and Security
Agreement are true, correct and complete in all material respects as of the date
of this Revolving Advance Request; provided that those
representations and warranties expressly referring to another date shall be
true, correct and complete in all material respects as of such
date.

    

    Capitalized
terms used herein and not otherwise defined have the meanings set forth in the
Loan and Security Agreement.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    EXHIBIT
C

    BORROWING
BASE CERTIFICATE

    BRIDGE
BANK

    55
Almaden Blvd, San Jose, CA 95113

    

    
      
        	
                Borrower:
      Document Capture Technologies

              	
                Co-Borrower:
      Syscan, Inc.

              

      

    

    

    
      
        
          
            	
                    ACCOUNTS
      RECEIVABLE BORROWING BASE CALCULATION:

                  	 	
                    As
      of Date:

                  	 	 
      	 
      
	 
      	 	 
      	 	 
      	 
      
	
                    1.

                  	
                    Add:
      Accounts Receivable Aged Current to 30 Days From Invoice
    Date

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    2.

                  	
                    Add:
      Accounts Receivable Aged 31 to 60 Days From Invoice Date

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    3.

                  	
                    Add:
      Accounts Receivable Aged 61 to 90 Days From Invoice Date

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    4.

                  	
                    Add:
      Accounts Receivable Aged 91 Days and Over From Invoice
Date

                  	 	
                    $________________

                  	 	 
      	 
      
	 
      	 
      	 	 
      	 	 
      	 
      
	
                    5.

                  	
                    GROSS
      ACCOUNTS RECEIVABLE

                  	 	 
      	 	
                    $________________

                  	 
      
	 
      	 
      	 	 
      	 	 
      	 
      
	
                    6.

                  	
                    Less:
      Accounts Receivable Aged over 90 days

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    7.

                  	
                    Less:
      U.S. Government Receivables (Net of > 90s)

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    8.

                  	
                    Less:
      Foreign Receivables excluding Canadian receivables (Net of >
      90s)

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    9.

                  	
                    Less:
      Affiliate or Related Accounts Receivables (Net of >
90s)

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    10.

                  	
                    Less:
      Account concentration in excess of 25%

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    11.

                  	
                    Less:
      Contra Accounts

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    12.

                  	
                    Less:
      Cross Aging  30%

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    13.

                  	
                    Less:
      Over 90 day A/R credits

                  	 	
                    $________________

                  	 	 
      	 
      
	
                    14.

                  	
                    Add:
      Lines 6 through 13 - Total Ineligible Accounts

                  	 	
                    $________________

                  	 	 
      	 
      
	 
      	 
      	 	 
      	 	 
      	 
      
	
                    15.

                  	
                    NET
      ELIGIBLE ACCOUNTS

                    RECEIVABLE

                  	 	 
      	 	
                    $________________

                  	 
      
	
                    16.

                  	
                    Account
      Receivable Advance Rate

                  	 	 
      	 	
                    75

                  	% 
      
	
                    17.

                  	
                    TOTAL
      A/R BORROWING BASE

                  	 	 
      	 	
                    $________________

                  	 
      
	 
      	
                    MAXIMUM AVAILABLE LINE OF
      CREDIT $2,000,000

                  	 	 
      	 	 
      	 
      
	 
      	 
      	 	 
      	 	 
      	 
      
	
                    18.

                  	
                    Less:
      Outstanding Loan Balance

                  	 	 
      	 	
                    $________________

                  	 
      
	
                    19.

                  	
                    Less:
      Outstanding under Sublimits (Letters of Credit, FX, Cash
      Management)

                  	 	 
      	 	
                    $________________

                  	 
      
	 
      	 
      	 	 
      	 	 
      	 
      
	
                    20.  

                  	
                    AVAILABLE
      FOR DRAW/NEED TO PAY

                  	 	 
      	 	
                    $________________

                  	 
      

          

        

      

    

    

    The
undersigned hereby represents and warrants that the foregoing is true, complete
and correct, and that the information reflected in this Borrowing Base
Certificate complies with the representations and warranties set forth in the
Loan and Security Agreement between the undersigned and Bridge Bank, National
Association.

    

    
      
        	
                DOCUMENT
      CAPTURE TECHNOLOGIES, INC.

              
	
                SYSCAN,
      INC.

              
	 
      
	
                By: 

              	 
      
	 
      	
                Authorized
      Signer

              

      

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    EXHIBIT
D

    COMPLIANCE
CERTIFICATE

     

    
      
        	
                TO:

              	
                BRIDGE
      BANK, NATIONAL ASSOCIATION

              
	 
      	 
      
	
                FROM:

              	
                DOCUMENT
      CAPTURE TECHNOLOGIES, INC.

              
	 
      	
                SYSCAN,
      INC.

              

      

    

    

    The
undersigned authorized officer of Document Capture Technologies, Inc. and
Syscan, Inc. (collectively, “Borrower”) hereby certifies that in accordance with
the terms and conditions of the Loan and Security Agreement between Borrower and
Bank (the “Agreement”), (i) Borrower is in complete compliance for the period
ending ___________ with all required covenants except as noted below and (ii)
all representations and warranties of Borrower stated in the Agreement are true
and correct as of the date hereof. Attached herewith are the required documents
supporting the above certification. The Officer further certifies that these are
prepared in accordance with Generally Accepted Accounting Principles (GAAP) and
are consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.

     

    Please
indicate compliance status by marking Yes/No under “Complies”
column.

     

    
      
        
          
            
              	
                      Reporting Covenant

                    	 	
                      Required

                    	 	
                      Complies

                    
	 
      	 	 
      	 	
                      Yes

                    	
                      No

                    
	
                      Annual
      Operating Projections

                    	 	
                      Annually,
      at least 30 days prior to FYE

                    	 	
                       ̈

                    	
                       ̈

                    
	 
      	 	 
      	 	 
      	 
      
	
                      Monthly
      Financial Statements

                    	 	
                      Monthly,
      within 25 days

                    	 	
                       ̈

                    	
                       ̈

                    
	 
      	 	 
      	 	 
      	 
      
	
                      Compliance
      Certificate

                    	 	
                      Monthly,
      within 30 days

                    	 	
                       ̈

                    	
                       ̈

                    
	 
      	 	 
      	 	 
      	 
      
	
                      10K,
      10Q and 8K

                    	 	
                      Within
      5 days of filing with the SEC

                    	 	
                       ̈

                    	
                       ̈

                    
	 
      	 	 
      	 	 
      	 
      
	
                      A/R
      and A/P Agings, Statement of Deferred Revenues

                    	 	
                      Monthly,
      within 25 days

                    	 	
                       ̈

                    	
                       ̈

                    
	 
      	 	 
      	 	 
      	 
      
	
                      Borrowing
      Base Certificate

                    	 	
                      Monthly,
      within 25 days

                    	 	
                       ̈

                    	
                       ̈

                    
	 
      	 	 
      	 	 
      	 
      
	
                      A/R
      Audit

                    	 	
                      Initial
      and Semi-Annually

                    	 	
                       ̈

                    	
                       ̈

                    
	 
      	 	 
      	 	 
      	 
      
	
                      Deposit
      balances with Bank

                    	 	
                      $
      ______________________

                    	 	 
      	 
      
	
                      Deposit
      balances outside Bank

                    	 	
                      $
      ______________________

                    	 	 
      	 
      

            

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    	
                            Financial Covenant

                          	 	
                            Required

                          	 	
                            Actual

                          	 	
                            Complies

                          
	 
      	 	 
      	 	 
      	 	
                            Yes

                          	
                            No

                          
	
                            Minimum
      Monthly Adjusted Quick Ratio

                          	 	
                            1.25:1.00

                          	 	
                            _____:1.00

                          	 	
                             ̈

                          	
                             ̈

                          
	
                            Minimum
      Monthly Tangible Net Worth

                          	 	
                            See
      Agreement

                            (Section
      6.9)

                          	 	
                            _____

                          	 	
                             ̈

                          	
                             ̈

                          

                  

                

              

            

          

        

      

    

     

    
      
        
          	
                  Comments Regarding
      Exceptions: See Attached.

                	 
      	
                  Bank
      Use Only

                
	
                  Sincerely,

                	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                  SIGNATURE

                	 
      	 
      	 
      	
                  Received

                	 
      	
                  Date

                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                  TITLE

                	 
      	 
      	 
      	
                  Verified

                	 
      	
                  Date

                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                  DATE

                	 
      	 
      	 
      	
                  Compliance
      Status

                	
                  Yes

                	
                  No

                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      

        

      

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    SCHEDULE
OF EXCEPTIONS

     

    Permitted
Indebtedness  (Section 1.1)

     

    Permitted
Investments  (Section 1.1)

     

    Permitted
Liens  (Section 1.1)

     

    Inbound
Licenses  (Section 5.6)

     

    Prior
Names  (Section 5.7)

     

    Litigation  (Section 5.8)

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    CORPORATE
RESOLUTIONS TO BORROW

     

      
        

      

    

    
      
        
          	
                  Borrower:                      DOCUMENT
      CAPTURE TECHNOLOGIES,
INC.

                

        

      

    

    
      

    

     

    I, the
undersigned Secretary or Assistant Secretary of DOCUMENT CAPTURE TECHNOLOGIES,
INC. (the “Corporation”), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of the State of Delaware.

     

    I FURTHER
CERTIFY that attached hereto as Attachments 1 and 2 are true and complete
copies of the Certificate of Incorporation, as amended, and the Bylaws of the
Corporation, each of which is in full force and effect on the date
hereof.

     

    I FURTHER
CERTIFY that at a meeting of the Directors of the Corporation, duly called and
held, at which a quorum was present and voting (or by other duly authorized
corporate action in lieu of a meeting), the following resolutions (the
“Resolutions”) were adopted.

     

    BE IT
RESOLVED, that any one (1) of the following named officers, employees, or agents
of this Corporation, whose actual signatures are shown below:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                NAMES

                                              	 	
                                                POSITION

                                              	 	
                                                ACTUAL SIGNATURES

                                              
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    acting
for and on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:

     

    Borrow Money.  To
borrow from time to time from Bridge Bank, National Association (“Bank”), on
such terms as may be agreed upon between the officers, employees, or agents of
the Corporation and Bank, such sum or sums of money as in their judgment should
be borrowed, without limitation.

     

    Execute Loan
Documents.  To execute and deliver to Bank that certain Loan
and Security Agreement dated as of September 2, 2009 (the “Loan Agreement”)
and any other agreement entered into between Corporation and Bank in connection
with the Loan Agreement, including any amendments, all as amended or extended
from time to time (collectively, with the Loan Agreement, the “Loan Documents”),
and also to execute and deliver to Bank one or more renewals, extensions,
modifications, refinancings, consolidations, or substitutions for the Loan
Documents, or any portion thereof.

     

    Grant Security.  To
grant a security interest to Bank in the Collateral described in the Loan
Documents, which security interest shall secure all of the Corporation’s
Obligations, as described in the Loan Documents.

     

    Negotiate Items.  To
draw, endorse, and discount with Bank all drafts, trade acceptances, promissory
notes, or other evidences of indebtedness payable to or belonging to the
Corporation or in which the Corporation may have an interest, and either to
receive cash for the same or to cause such proceeds to be credited to the
account of the Corporation with Bank, or to cause such other disposition of the
proceeds derived therefrom as they may deem advisable.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Warrants.  To issue
Bank warrants to purchase the Corporation’s capital stock.

     

    Letters of
Credit.  To execute letter of credit applications and other
related documents pertaining to Bank’s issuance of letters of
credit.

     

    Corporate Credit
Cards.  To execute corporate credit card applications and
agreements and other related documents pertaining to Bank’s provision of
corporate credit cards.

     

    Further Acts.  In
the case of lines of credit, to designate additional or alternate individuals as
being authorized to request advances thereunder, and in all cases, to do and
perform such other acts and things, to pay any and all fees and costs, and to
execute and deliver such other documents and agreements as they may in their
discretion deem reasonably necessary or proper in order to carry into effect the
provisions of these Resolutions.

     

    BE IT
FURTHER RESOLVED, that any and all acts authorized pursuant to these resolutions
and performed prior to the passage of these resolutions are hereby ratified and
approved, that these Resolutions shall remain in full force and effect and Bank
may rely on these Resolutions until written notice of their revocation shall
have been delivered to and received by Bank.  Any such notice shall
not affect any of the Corporation’s agreements or commitments in effect at the
time notice is given.

     

    I FURTHER
CERTIFY that the officers, employees, and agents named above are duly elected,
appointed, or employed by or for the Corporation, as the case may be, and occupy
the positions set forth opposite their respective names; that the foregoing
Resolutions now stand of record on the books of the Corporation; and that the
Resolutions are in full force and effect and have not been modified or revoked
in any manner whatsoever.

     

    IN
WITNESS WHEREOF, I have hereunto set my hand on September 2, 2009 and
attest that the signatures set opposite the names listed above are their genuine
signatures.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	
                                CERTIFIED
      AND ATTESTED BY:

                              
	 
      	 
      
	 
      	
                                X
      ___________________________________

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    CORPORATE
RESOLUTIONS TO BORROW

     

      
        

      

    

    
      
        	
                Borrower:                      SYSCAN,
      INC.

              

      

    

    
      

    

     

    I, the
undersigned Secretary or Assistant Secretary of SYSCAN, INC. (the
“Corporation”), HEREBY CERTIFY that the Corporation is organized and existing
under and by virtue of the laws of the State of California.

     

    I FURTHER
CERTIFY that attached hereto as Attachments 1 and 2 are true and complete
copies of the Articles of Incorporation, as amended, and the Bylaws of the
Corporation, each of which is in full force and effect on the date
hereof.

     

    I FURTHER
CERTIFY that at a meeting of the Directors of the Corporation, duly called and
held, at which a quorum was present and voting (or by other duly authorized
corporate action in lieu of a meeting), the following resolutions (the
“Resolutions”) were adopted.

     

    BE IT
RESOLVED, that any one (1) of the following named officers, employees, or agents
of this Corporation, whose actual signatures are shown below:

    
       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  NAMES

                                                	 	
                                                  POSITION

                                                	 	
                                                  ACTUAL SIGNATURES

                                                
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

    

    acting
for and on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:

     

    Borrow Money.  To
borrow from time to time from Bridge Bank, National Association (“Bank”), on
such terms as may be agreed upon between the officers, employees, or agents of
the Corporation and Bank, such sum or sums of money as in their judgment should
be borrowed, without limitation.

     

    Execute Loan
Documents.  To execute and deliver to Bank that certain Loan
and Security Agreement dated as of September 2, 2009 (the “Loan Agreement”)
and any other agreement entered into between Corporation and Bank in connection
with the Loan Agreement, including any amendments, all as amended or extended
from time to time (collectively, with the Loan Agreement, the “Loan Documents”),
and also to execute and deliver to Bank one or more renewals, extensions,
modifications, refinancings, consolidations, or substitutions for the Loan
Documents, or any portion thereof.

     

    Grant Security.  To
grant a security interest to Bank in the Collateral described in the Loan
Documents, which security interest shall secure all of the Corporation’s
Obligations, as described in the Loan Documents.

     

    Negotiate Items.  To
draw, endorse, and discount with Bank all drafts, trade acceptances, promissory
notes, or other evidences of indebtedness payable to or belonging to the
Corporation or in which the Corporation may have an interest, and either to
receive cash for the same or to cause such proceeds to be credited to the
account of the Corporation with Bank, or to cause such other disposition of the
proceeds derived therefrom as they may deem advisable.

     

    Warrants.  To issue
Bank warrants to purchase the Corporation’s capital stock.

     

    Letters of
Credit.  To execute letter of credit applications and other
related documents pertaining to Bank’s issuance of letters of
credit.

     

    Corporate Credit
Cards.  To execute corporate credit card applications and
agreements and other related documents pertaining to Bank’s provision of
corporate credit cards.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Further Acts.  In
the case of lines of credit, to designate additional or alternate individuals as
being authorized to request advances thereunder, and in all cases, to do and
perform such other acts and things, to pay any and all fees and costs, and to
execute and deliver such other documents and agreements as they may in their
discretion deem reasonably necessary or proper in order to carry into effect the
provisions of these Resolutions.

     

    BE IT
FURTHER RESOLVED, that any and all acts authorized pursuant to these resolutions
and performed prior to the passage of these resolutions are hereby ratified and
approved, that these Resolutions shall remain in full force and effect and Bank
may rely on these Resolutions until written notice of their revocation shall
have been delivered to and received by Bank.  Any such notice shall
not affect any of the Corporation’s agreements or commitments in effect at the
time notice is given.

     

    I FURTHER
CERTIFY that the officers, employees, and agents named above are duly elected,
appointed, or employed by or for the Corporation, as the case may be, and occupy
the positions set forth opposite their respective names; that the foregoing
Resolutions now stand of record on the books of the Corporation; and that the
Resolutions are in full force and effect and have not been modified or revoked
in any manner whatsoever.

     

    IN
WITNESS WHEREOF, I have hereunto set my hand on September 2, 2009 and
attest that the signatures set opposite the names listed above are their genuine
signatures.

     

    
      
        
          
            
              
                	 
      	
                        CERTIFIED
      AND ATTESTED BY:

                      
	 
      	 
      
	 
      	
                        X
      ________________________________________

                      

              

            

          

        

      

    

     

    
      
         

      

      
        2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]