Document:

Exhibit 10.1

 

AMENDMENT NO. 10 TO LOAN AGREEMENT

 

THIS AMENDMENT NO. 10 TO LOAN AGREEMENT (this “Amendment”), dated and
effective as of March 31, 2009, is entered into by and between Union Bank,
N.A. (formerly known as Union Bank of California, N. A.; “Bank”) and Crocs, Inc.,
a Delaware corporation (“Borrower”), with reference to the following facts:

 

RECITALS

 

A. Borrower and Bank are parties to that certain Loan Agreement, dated
as of May 8, 2007 (as heretofore amended, the “Loan Agreement”), pursuant
to which Bank has provided Borrower with certain credit facilities.

 

B. Borrower has requested that Bank amend the Loan Agreement as set
forth below.

 

C. Bank is willing to grant such amendment on the terms and conditions
set forth below.

 

NOW THEREFORE, in consideration of the amendment and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:

 

1. Initially capitalized terms used in this Amendment (including
without limitation in the recitals hereto) without definition shall have the
respective meanings given thereto in the Loan Agreement.

 

2. The sentence in Section 1.1.1 of the Loan Agreement which reads
as follows: The Committed Loan shall be repaid on or before April 2, 2009,
at which time all unpaid principal and interest on the Committed Loan shall be
due and payable, hereby is amended and restated in its entirety to read as
follows: “The Committed Loan shall be repaid on or before September 30, 2009,
at which time all unpaid principal and interest on the Committed Loan shall be
due and payable.”

 

3. Notwithstanding anything in the Loan Agreement to the contrary, the
amount of the Committed Loan shall be reduced as follows:

 

	
  Date

  	
   

  	
  Amount of Committed Loan

  
	
  Date of this Amendment

  	
   

  	
  $

  	
  19,800,000

  
	
  4/30/09

  	
   

  	
  $

  	
  18,800,000

  
	
  6/1/09

  	
   

  	
  $

  	
  17,800,000

  
	
  7/1/09

  	
   

  	
  $

  	
  14,800,000

  
	
  7/31/09

  	
   

  	
  $

  	
  11,800,000

  
	
  8/31/09

  	
   

  	
  $

  	
  7,800,000

  

 

 

4. Section 4.5 of the Loan Agreement hereby is amended by the
addition of a new Subsection 4.5(ii) to read as follows:

 

“(ii) Within forty-five (45) days after
the end of each calendar month commencing with the month ending April 30, 2009,
Borrower’s consolidated and consolidating financial statements including, but
not limited to, the balance sheet, income statement and inventory turn
information.”

 

5.             A new Section 4.14
hereby is added to the Loan Agreement to read as follows:

 

“4.14 Review of Financial Statements and
Current Assets. Anytime after June 30, 2009, upon
the request of Bank, Borrower agrees to engage, at its own expense, an advisor
or advisors chosen by Bank to perform a review of Borrower’s projected
financial statements, including its projected cash flow, and a review and
valuation of Borrower’s current assets.”

 

6.             The
effectiveness of this Amendment shall be subject to the prior satisfaction of
each of the following conditions:

 

(a)           Bank
shall have received an original of this Amendment, duly executed by Borrower;

 

(b)           Borrower
shall have executed and delivered to Bank the Commercial Promissory Note (Reference
Rate) and such other documents and instruments as Bank may reasonably request;

 

(c)           Borrower
shall make a principal payment to Bank in an amount equal to $1,621,500; and

 

(d)           Borrower
shall have paid Bank all legal fees and expenses incurred in connection with
this Amendment, which may be debited from any of Borrower’s accounts with Bank.

 

7.             All representations
and warranties made in the Loan Agreement or in any other documents or
instruments relating thereto, including without limitation any Loan Documents
furnished in connection with this Amendment, after giving effect to this
Amendment, shall survive the execution and delivery of this Amendment and the
other Loan Documents, and nothing shall affect the representations and
warranties or the right of Bank to rely thereon.

 

 

8.             Borrower is not
aware of any events which now constitute, or with the passage of time or the
giving of notice, or both, would constitute, an Event of Default under the Loan
Agreement as amended by this Amendment.

 

9.             The Loan Agreement,
each of the other Loan Documents, and any and all other agreements, documents
or instruments now or hereafter executed and delivered pursuant to the terms of
this Amendment, or pursuant to the terms of the Loan Agreement as amended
hereby, are hereby amended so that any reference therein to the Loan Agreement
shall mean a reference to the Loan Agreement as amended hereby.

 

10.           The Loan Agreement
and the other Loan Documents remain in full force and effect and Borrower
hereby ratifies and confirms its agreements and covenants contained therein. Borrower
hereby confirms that, after giving effect to this Amendment, no Event of
Default exists as of the date hereof.

 

11.           Any provision of
this Amendment held by a court of competent jurisdiction to be invalid or
unenforceable shall not impair or invalidate the remainder of this Agreement
and the effect thereof shall be confined to the provision so held to be invalid
or unenforceable.

 

12.           THIS AMENDMENT AND
ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN
MADE AND TO BE PERFORMABLE IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

13.           This Amendment is
binding upon and shall inure to the benefit of Bank and Borrower and their
respective successors and assigns; provided that Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Bank.

 

14.           This Amendment may
be executed in one or more counterparts, each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same instrument.

 

15.           THIS AMENDMENT, TOGETHER
WITH THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AGREEMENT BETWEEN
BANK AND BORROWER AS TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN BANK
AND BORROWER.

 

[Balance
of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the parties hereto have entered into this Amendment
by their respective duly authorized officers as of the date first above
written.

 

CROCS, INC.

 

	
  By:

  	
  /s/ Russ
  Hammer

  	
   

  
	
  Printed
  Name:

  	
  Russ Hammer

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  
	
   

  
	
   

  
	
  UNION BANK,
  N. A.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Michael
  J. Campbell

  	
   

  
	
  Printed
  Name:

  	
  Michael J.
  Campbell

  	
   

  
	
  Title:

  	
  Vice
  President

  	
   

  

 

[Signature
Page to Amendment No. 10 to Loan Agreement]

 

 

	
  Acknowledged
  and Agreed:

  
	
   

  
	
  JPMORGAN
  CHASE BANK, NA

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Brian
  McDougal

  	
   

  
	
  Printed
  Name:

  	
  Brian McDougal

  	
   

  
	
  Title:

  	
  Vice
  President

  	
   

  

 

[Acknowledgement
Page to Amendment No. 10 to Loan Agreement]

 

 

	
   

  	
  COMMERCIAL PROMISSORY NOTE

  (REFERENCE RATE)

  

 

	
  Debtor Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Crocs, Inc., a
  Delaware Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Debtor Address

  	
  Office

  	
  Loan Number

  
	
   

  	
  40061

  	
  163-151-024-2

  
	
  6328 Monarch Park Place

  	
   

  	
   

  
	
  Niwot, CO 80503

  	
  Maturity Date

  	
  Amount

  
	
   

  	
  September 30, 2009

  	
  $19,800,000.00

  

 

	
  $19,800,000.00

  	
   

  	
  Date March 31, 2009

  

 

FOR VALUE
RECEIVED, the
undersigned (“Debtor”) promises to pay to the order of UNION BANK OF CALIFORNIA, N.A. (“Bank”), as indicated below, the
principal sum of NINETEEN MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS
($19,800,000.00), together with interest on the balance of such principal from
time to time outstanding at the per annum rate or rates and at the times set
forth below.

 

At any time prior to the
maturity of this note, subject to the provisions of paragraph 5, below, Debtor
may repay but not reborrow hereunder so long as the total outstanding at any
one time does not exceed the maximum amount then available to be borrowed
hereunder as set forth above or in paragraph 1, below.

 

1.             PAYMENTS. Debtor shall pay (x) accrued but
unpaid interest on the first day of each month (commencing April 1, 2009),
and (y) principal payments sufficient to reduce the outstanding principal
balance to (i) $18,800,000.00 by April 30, 2009, (ii) $17,800,000.00
by June 1, 2009, (iii) $14,800,000.00 by July 1, 2009, (iv) $11,800,000.00
by July 31, 2009, and (v) $7,800,000.00 by August 31, 2009.
Debtor shall pay all remaining principal and accrued but unpaid interest on September 30,
2009 (the “Termination Date”). Should interest not be paid when due it shall
become part of the principal and bear interest as herein provided. If any
interest rate defined in this note ceases to be available for any reason, then
said interest rate shall be replaced by the rate then offered by Bank which, in
the sole discretion of Bank, most closely approximates the unavailable rate.

 

Debtor shall pay all amounts
due under this note in lawful money of the United States to Bank at P.O. Box
30115, Los Angeles, CA 90030-0115, or at such other office as may be designated
by Bank from time to time.

 

2.                                      INTEREST RATE.

 

(a)           VARIABLE INTEREST RATE. All principal outstanding hereunder shall
bear interest at the per annum rates set forth on Annex I attached hereto.

 

(b)           INTEREST RATE COMPUTATIONS. All computations of interest under this
note shall be made on the basis of a year of 360 days for actual days elapsed.

 

3.             LATE PAYMENTS. If any payment required by the terms of
this note shall remain unpaid ten days after same is due, at the option of
Bank, Debtor shall pay a fee of $100 to Bank.

 

 

4.             INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law. interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in paragraph 2 (b), above,
calculated from the date of default until all amounts payable under this note
are paid in full.

 

5.             PREPAYMENT.

 

(a)           Amounts
outstanding under this note bearing interest at a rate based on the Reference Rate
may be prepaid in whole or in part at any time, without penalty or premium.

 

(b)           All
prepayments shall include payment of accrued interest on the principal amount
so prepaid and shall be applied to payment of interest before application to
principal. A determination by Bank as to the prepayment fee amount, if any,
shall be conclusive.

 

(c)           Bank
shall provide Debtor a statement of the amount payable on account of
prepayment.

 

DEBTOR INITIAL HERE:

 

6.             DEFAULT AND ACCELERATION OF TIME
FOR PAYMENT. Default
shall include, but not be limited to, any of the following: (a) the failure
of Debtor to make any payment required under this note when due; (b) any
breach, misrepresentation or other default by Debtor, any guarantor, co-maker,
endorser, or any person or entity other than Debtor providing security for this
note (hereinafter individually and collectively referred to as the “Obligor”)
under any security agreement, guaranty or other agreement between Bank and any
Obligor; (c) the insolvency of any Obligor or the failure of any Obligor
generally to pay such Obligor’s debts as such debts become due; (d) the
commencement as to any Obligor of any voluntary or involuntary proceeding under
any laws relating to bankruptcy, insolvency, reorganization, arrangement, debt
adjustment or debtor relief; (e) the assignment by any Obligor for the
benefit of such Obligor’s creditors; (f) the appointment, or commencement
of any proceeding for the appointment of a receiver, trustee, custodian or
similar official for all or substantially all of any Obligor’s property; (g) the
commencement of any proceeding for the dissolution or liquidation of any
Obligor; (h) the termination of existence or death of any Obligor; (i) the
revocation of any guaranty or subordination agreement given in connection with
this note; (j) the failure of any Obligor to comply with any order,
judgment, injunction, decree, writ or demand of any court or other public
authority; (k) the filing or recording against any Obligor, or the
property of any Obligor, of any notice of levy, notice to withhold, or other
legal process for taxes other than property taxes; (1) the default by any
Obligor personally liable for amounts owed hereunder on any obligation
concerning the borrowing of money; (m) the issuance against any Obligor,
or the property of any Obligor, of any writ of attachment, execution, or other
judicial lien; or (n) the deterioration of the financial condition of any
Obligor which results in Bank deeming itself, in good faith, insecure. Upon the
occurrence of any such default, Bank, in its discretion, may cease to advance
funds hereunder and may declare all obligations under this note immediately due
and payable; however, upon the occurrence of an event of default under d, e, f,
or g, all principal and interest shall automatically become immediately due and
payable.

 

7.             ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note are
not paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys’ fees (including the allocated costs of Bank’s in-house
counsel and legal staff) incurred by Bank in the negotiation, documentation and
modification of this note and all related documents and in the collection

 

2

 

or enforcement of any amount
outstanding hereunder. Debtor and any Obligor, for the maximum period of time
and the full extent permitted by law, (a) waive diligence, presentment,
demand, notice of nonpayment, protest, notice of protest, and notice of every
kind; (b) waive the right to assert the defense of any statute of
limitations to any debt or obligation hereunder; and (c) consent to
renewals and extensions of time for the payment of any amounts due under this
note. If this note is signed by more than one party, the term “Debtor” includes
each of the undersigned and any successors in interest thereof; all of whose
liability shall be joint and several. Any married person who signs this note
agrees that recourse may be had against the separate property of that person
for any obligations hereunder. The receipt of any check or other item of payment
by Bank, at its option, shall not be considered a payment on account until such
check or other item of payment is honored when presented for payment at the
drawee bank. Bank may delay the credit of such payment based upon Bank’s
schedule of funds availability, and interest under this note shall accrue until
the funds are deemed collected. In any action brought under or arising out of
this note, Debtor and any Obligor, including their successors and assigns,
hereby consent to the jurisdiction of any competent court within the State of
California, as provided in any alternative dispute resolution agreement
executed between Debtor and Bank, and consent to service of process by any
means authorized by said state s law. The term “Bank” includes, without limitation,
any holder of this note. This note shall be construed in accordance with and
governed by the laws of the State of California. This note hereby incorporates
any alternative dispute resolution agreement previously, concurrently or
hereafter executed between Debtor and Bank.

 

8.             DEFINITIONS. As used herein, the following terms shall
have the meanings respectively set forth below: “Business Day” means a day on which Bank is open for business
for the funding of corporate loans. “Reference
Rate” means the rate announced by Bank from time to time at its
corporate headquarters as its Reference Rate. The Reference Rate is an index
rate determined by Bank from time to time as a means of pricing certain
extensions of credit and is neither directly tied to any external rate of
interest or index nor necessarily the lowest rate of interest charged by Bank
at any given time.

 

9.             SUPERSESSION OF PRIOR NOTE. This note supersedes and replaces that
certain Commercial Promissory Note (Base Rate) in a principal amount not to
exceed $22,421,500.00, dated February 13, 2009, executed by Debtor to the
order of Bank.

 

DEBTOR:

 

Crocs, Inc., a Delaware
corporation

 

 

	
  By:

  	
  /s/ Russ Hammer

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  

 

3

 

	
   

  	
  ANNEX I

  

 

All
principal outstanding hereunder shall bear interest at the rates corresponding
to the principal balances (and levels) set forth below:

 

	
  Level

  	
   

  	
  Outstanding principal balance

  	
   

  	
  Per annum interest rate

  
	
  I

  	
   

  	
  3 $18,000,000

  	
  8.00% above the Reference Rate

  
	
  II

  	
   

  	
  < $18,000,000

  	
   

  	
  7.00% above the Reference Rate

  
	
  III

  	
   

  	
  < $15,000,000

  	
   

  	
  6.00% above the Reference Rate

  
	
  IV

  	
   

  	
  < $12,000,000

  	
   

  	
  5.00% above the Reference Rate

  

 

provided, however, that (x) no
decrease in interest rate will take effect unless Borrower s borrowing base is
equal to or greater than $25,000,000 as determined by Bank in its reasonable
discretion with reference to the most recent weekly borrowing base certificate
delivered to Bank by Borrower, and (y) if at any time Bank reasonably
determines that Borrower s borrowing base is less than $25,000,000, the
effective interest rate will revert to the preceding interest rate level
through such time as Bank reasonably determines Borrower’s borrowing base again
equals or is greater than $25,000,000.ex_10-28.htm

    
      

    

     

    EXHIBIT
10.28

    

    AMENDED
AND RESTATED

    REVOLVING
CREDIT PROMISSORY NOTE

    (LIBOR/PRIME)

    

    $10,000,000 Dated
as of December 22, 2008

    

    For value received, Avistar Communications
Corporation, a Delaware corporation (the “Borrower”) hereby
promises to pay to the order of JPMorgan Chase Bank, N.A. (the
“Bank”) at its
office at 345 Park Avenue, New York, New York 10154-1002  for the
account of the lending office of the Bank, the principal amount of each loan
made by the Bank to the Borrower (the “Loans”), up to an
aggregate principal amount equal to the Maximum Facility Amount, on the first
anniversary of the date hereof (the “Final Maturity
Date”).

    

    The Revolving Credit Promissory Note
(Libor/Prime) dated as of December 23, 2006, as amended, by the Borrower to the
order of the Bank (the “Original Note”) is
amended and restated in its entirety by this Note.

    

    The Borrower promises to pay interest
on each Interest Payment Date on the unpaid balance of the principal amount of
each such Loan from and including the date of such Loan to but excluding the
date of its repayment at either (i) a floating rate per annum equal to the Prime
Rate applicable to such Loan plus 1.25% (such Loan a
“Prime Loan”),
or (ii) a fixed rate per annum equal to the Adjusted Libor Rate applicable to
such Loan plus 1.25%
(such Loan a “Libor
Loan”).  After the occurrence and during the continuance of an
Event of Default, principal shall bear interest from and including the date of
such Event of Default until paid in full at a rate per annum equal to the
Default Rate, such interest to be payable on demand.  Interest shall
be payable on the relevant Interest Payment Date and for Libor Loans shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed and for Prime Loans shall be calculated on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed.  Prior to the
Final Maturity Date, provided that no Event of Default has occurred and is
continuing, and subject to the terms of this Note, the Borrower may borrow,
repay and reborrow under this Note, up to the aggregate principal amount equal
to the Maximum Facility Amount (the “Commitment”).

    

    All payments hereunder shall be made in
lawful money of the United States and in immediately available
funds.  Any extension of time for the payment of the principal of this
Note resulting from the due date falling on a non-Banking Day shall be included
in the computation of interest.  The date, amount, type and Interest
Period of, and the interest rate with respect to, each Loan evidenced hereby and
all payments of principal thereof shall be recorded by the Bank on its books
and, at the discretion of the Bank prior to any transfer of this Note at any
other time, may be endorsed by the Bank on a schedule.  Any such
endorsement shall be conclusive absent manifest error. The Bank may (but shall
not be obligated to) debit the amount of any payment under this Note that is not
made when due to any deposit account of the Borrower with the
Bank.  The Borrower waives presentment, notice of dishonor, protest
and any other notice or formality with respect to this Note.

    

    

    1.           Definitions.  The
terms listed below shall be defined as follows:

    

    “Adjusted Libor Rate”
shall mean the Libor Rate for such Loan divided by one minus the Reserve
Requirement.

    

    “Banking Day” shall
mean any day on which commercial banks are not authorized or required to close
in New York City and whenever such day relates to a Libor Loan or notice with
respect to any Libor Loan, a day on which dealings in U.S. dollar deposits are
also carried out in the London interbank market.

    

    “Borrowing Notice”
shall mean a request for a borrowing substantially in the forma of Exhibit A
hereto.

    

    “Collateral Agreement”
means the Amended and Restated Collateral Agreement dated as of
December 22, 2008 by the Guarantor in favor of the Bank securing, among
other things, the Guarantor’s obligations to the Bank under the Guaranty, as
amended, restated or otherwise modified from time to time.

    

    “Convertible Notes”
means the “Notes” (as defined in, and issued pursuant to, the Convertible Note
Purchase Agreement).

    

    “Convertible Note Purchase
Agreement” means the Convertible Note Purchase Agreement dated January 4,
2008 by the Borrower and the purchasers parties thereto with respect to the
Borrower’s sale of its 4.5% convertible subordinated secured promissory
notes.

    

    “Default Rate” shall
mean a rate per annum equal to: (a) if a Prime Loan, a floating rate of 2% above
the rate of interest thereon (including any margin); (b) if a Libor Loan, a
fixed rate of 2% above the rate of interest in effect thereon (including any
margin) at the time of the applicable Event of Default until the last day of the
Interest Period thereof and, thereafter, a floating rate of 2% above the rate of
interest for a Prime Loan (including any margin).

    

    “Event of Default”
shall mean an event described in Section 7.

    

    “Facility Documents”
shall mean this Note and any other documents, instruments, or agreements
delivered as security or collateral for, or a guaranty of, the Loans, or in
connection with, or as support for, any of the foregoing, whether by the
Borrower or a Third Party, and any updates or renewals thereof (including,
without limitation, the Collateral Agreement, the Guaranty and the Security
Agreement).

    

    “Guarantor” means (i)
Gerald J. Burnett and (ii) Gerald J. Burnett and Marjorie J. Burnett as Trustees
for The Gerald J. Burnett and Marjorie J. Burnett Revocable Trust.

    

    “Guaranty” means the
Amended and Restated Guaranty dated as of December 22, 2008 by the
Guarantor in favor of the Banks guarantying, among other things, the Borrower’s
obligations to the Bank under this Note hereto, as amended, restated or
otherwise modified from time to time.

    

    “Interest Payment
Date” shall mean (i) the last Banking Day of each calendar month for
Prime Loans commencing January 31, 2007; (ii) the last Banking Day of each
calendar month and on the last day of the Interest Period with respect to Libor
Loans (and for any Libor Loan with an Interest Period longer than three months,
every three months); and (iii) on any payment of principal.

    

    “Interest Period”
shall mean (i) with respect to a Prime Loan, the period commencing on the date
such Prime Loan is made and ending on the earlier of the Final Maturity Date or
the date recorded by the Bank on its books or if such day is not a Banking Day,
then on the immediately succeeding Banking Day, and (ii) with respect to a Libor
Loan, the period commencing on the date such Libor Loan is made and ending on
the numerically corresponding day  One, Three or Six calendar months
thereafter, as recorded by the Bank on its books, or if such day is not a
Banking Day, then on the immediately succeeding Banking Day; provided that if
such Banking Day would fall in the next calendar month, such Interest Period
shall end on the immediately preceding Banking Day; and provided, further, that
each such Interest Period which commences on the last Banking Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate calendar month.  No Interest Period may extend beyond the
Final Maturity Date.

    

    “Libor Rate” shall
mean the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) quoted by the Bank at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two Banking Days prior to the first day of such Loan
for the offering by the Bank to leading banks in the London interbank market of
U.S. dollar deposits having a term comparable to such Loan and in an amount
comparable to the principal amount of such Loan.

    

    “Main Office” shall
mean the main office of the Bank, currently located at 1111 Polaris Parkway,
Columbus, Ohio 43240.

    

    “Maximum Facility
Amount” shall mean the lesser of (i) Ten Million
Dollars ($10,00,000) and (ii) the value assigned by the Bank from time
to time, in its sole reasonable discretion, to the collateral, if any, pledged
and collaterally assigned to the Bank, and in which the Bank has a
first-priority security interest and against which the Bank has a right of
setoff, as security for the Borrower’s payment of its obligations under this
Note.

     

    “Prime Rate” shall
mean the rate of interest per annum announced from time to time by the Bank as
its prime rate.  Each change in the Prime Rate shall be effective from
and including the date the change is announced as being
effective.  The Prime Rate is a reference rate and may not be the
Bank’s lowest rate.

    

    “Regulation D” shall
mean Regulation D of the Board of Governors of the Federal Reserve
System.

     

    “Regulatory Change”
shall mean any change after the date of this Note in United States federal,
state or municipal laws or any foreign laws or regulations (including Regulation
D) or the adoption or making after such date of any interpretations, directives
or requests applying to a class of banks, including the Bank, of or under any
United States federal, state or municipal laws or any foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.

    

    “Reserve Requirement”
shall mean, for any Libor Loan, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained during the term of such Loan under Regulation D by member banks of
the Federal Reserve System in New York City with deposits exceeding one billion
U.S. dollars, or as otherwise established by the Board of Governors of the
Federal Reserve System and any other banking authority to which the Bank is
subject, against “Eurocurrency liabilities” (as such term is used in Regulation
D).  Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks by reason of any Regulatory Change against (x) any category of
liabilities which includes deposits by reference to which the Libor Rate is to
be determined or (y) any category of extensions of credit or other assets which
include Libor Loans.  The Reserve Requirement shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

    

    “SEC” means the
Securities and Exchange Commission.

    

    “Security Agreement”
shall mean the Second Amended and Restated Security Agreement dated as of
December 22, 2008 by the Borrower in favor of the Bank securing, among
other things, the Borrower’s obligations to the Bank under this Note, as
amended, restated or otherwise modified from time to time.

    

    “Third Party” shall
mean any party liable with respect to, or otherwise granting support for, this
Note, whether by guaranty, subordination, grant of security or
otherwise.

    

    2.  Borrowings,
Conversions, Renewals and Prepayments.  (a) The Borrower shall
deliver a Borrowing Notice to the Bank, which shall be
irrevocable,  by 12:00 noon New York City time three (3) Banking Days
prior to each requested borrowing of a Libor Loan and by 12:00 noon New York
City time on the date of each requested borrowing of a Prime Loan; provided that
no Libor Loan shall be in a minimum amount less than $500,000; provided,
further, that no Prime Loan shall be in an amount less than $30,000; and
provided, further, that the aggregate outstanding principal amount of all Loans
shall not exceed the Maximum Facility Amount.  Subject to the
provisions of this Note, the Borrower shall have the right to (i) convert one
type of Loan into another type of Loan on the last day of the Interest Period
with respect to a Libor Loan or at any time for a Prime Loan, or (ii) renew any
Libor Loan as a Libor Loan on the last day of the Interest Period with respect
to such Libor Loan; provided that the Borrower shall give the Bank irrevocable
notice by 12:00 noon New York City time three Banking Days prior to conversion
into or renewal as a Libor Loan, and by 12:00 noon New York City time on or
before the date of conversion into a Prime Loan.  If the Borrower
shall fail to give notice to the Bank of the renewal of any Libor Loan as
provided herein, such Libor Loan shall automatically become a Prime Loan on the
last day of the Interest Period thereof; provided that the Bank may renew such
Loan as a Libor Loan for an Interest Period equal to that then ending, provided
that no such renewal shall be made if the number of months in the renewal period
is greater than six.

    

    (b)           The
Borrower shall have the right to make prepayments of principal at any time or
from time to time, provided that:  (i) the Borrower shall give the
Bank irrevocable notice of each prepayment by 12:00 noon New York City time
three Banking Days prior to prepayment of a Libor Loan, and by 12:00 noon New
York City time on the date of prepayment of a Prime Loan; (ii) Libor Loans may
be prepaid prior to the last day of their Interest Period only if accompanied by
payment of the additional compensation calculated in accordance with paragraph 5
below, if applicable; (iii) all prepayments of Libor Loans shall be in a minimum
amount equal to the lesser of $100,000 or the unpaid principal amount of this
Note; and (iv) all prepayments of Prime Rate Loans shall be in a minimum amount
equal to the lesser of $30,000 or the unpaid principal amount of this
Note.

    

    3.           Additional
Costs.  (a) If as a result of any Regulatory Change which (i)
changes the basis of taxation of any amounts payable to the Bank under the Note
(other than taxes imposed on the overall net income of the Bank or the lending
office by the jurisdictions in which the Main Office of the Bank or the lending
office are located) or (ii) imposes or modifies any reserve, special deposit,
deposit insurance or assessments, minimum capital, capital ratios or similar
requirements relating to any extension of credit or other assets of, or any
deposits with or other liabilities of the Bank, or (iii) imposes any other
condition affecting this Note, the Bank determines (which determination shall be
conclusive absent manifest error) that the cost to it of making or maintaining a
Libor Loan is increased or any amount received or receivable by the Bank under
this Note is reduced, then the Borrower will pay to the Bank on demand an
additional amount that the Bank determines will compensate it for the increased
cost or reduction in amount.

    (b)           Without
limiting the effect of the foregoing provisions of this Section 3 (but without
duplication), the Borrower shall pay to the Bank from time to time on request
such amounts as the Bank may determine to be necessary to compensate the Bank
for any costs which it determines are attributable to the maintenance by it or
any of its affiliates pursuant to any law or regulation of any jurisdiction or
any interpretation, directive or request (whether or not having the force of law
and whether in effect on the date of this Note or thereafter) of any court or
governmental or monetary authority of capital in respect of the Loans hereunder
(such compensation to include, without limitation, an amount equal to any
reduction in return on assets or equity of the Bank to a level below that which
it could have achieved but for such law, regulation, interpretation, directive
or request).

    

    
       

    

    4.           Unavailability, Inadequacy or
Illegality of Libor Rate.  Anything herein to the contrary
notwithstanding, if the Bank determines (which determination shall be
conclusive) that:

    (a)           quotations
of interest rates for the relevant deposits referred to in the definition of
Libor Rate are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for a Libor Loan;
or

    (b)           the
definition of Libor Rate does not adequately cover the cost to the Bank of
making or maintaining a Libor Loan; or

    (c)           as
a result of any Regulatory Change (or any change in the interpretation thereof)
adopted after the date hereof, the Main Office of the Bank or the lending office
is subject to any taxes, reserves, limitations, or other charges, requirements
or restrictions on any claims of such office on non-United States residents
(including, without limitation, claims on non-United States offices or
affiliates of the Bank) or in respect of the excess above a specified level of
such claims; or

    (d)           it
is unlawful for the Bank or the lending office to maintain any Libor Loan at the
Libor Rate;

    

    THEN, the
Bank shall give the Borrower prompt notice thereof, and so long as such
condition remains in effect, any existing Libor Loan shall bear interest as a
Prime Loan and the Bank shall make no Libor Loans.

    

    5.           Certain
Compensation.  If for any reason there is a principal payment
of a Libor Loan on a date other than the last day of the applicable Interest
Period with respect thereto (whether by prepayment, acceleration, conversion or
otherwise), the Borrower will pay to the Bank such amount or amounts as shall be
sufficient (in the reasonable opinion of the Bank) to compensate the Bank for
any loss, cost or expense which the Bank determines is attributable to such
payment.

    

    6.           Representations.  The
Borrower represents and warrants that:

    

    (a)  the Facility Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their terms, except as the enforcement
hereof and thereof may be limited by bankruptcy, insolvency, or other similar
laws affecting the enforcement of creditors’ rights generally and subject to the
applicability of general principles of equity;

    (b)           the
execution, delivery and performance by the Borrower of the Facility Documents
and all other documents contemplated hereby or thereby, and the use of the
proceeds of any of the Loans, do not and will not (i) conflict with or
constitute a breach of, or default under, or require any consent under, or
result in the creation of any lien, charge or encumbrance upon the property or
assets of the Borrower pursuant to any other agreement or instrument (other than
any pledge of or security interest granted in any collateral pursuant to any
Facility Document) to which the Borrower is a party or is bound or by which its
properties may be bound or affected; or (ii) violate any provision of any law,
rule, regulation (including, without limitation, Regulation U of the Federal
Reserve Board), order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to the Borrower;

    (c)           no
consent, approval or authorization of, or registration, declaration or filing
with, any governmental authority or other person or entity is required as a
condition to or in connection with the due and valid execution, delivery and
performance by the Borrower of any Facility Document;

    (d)           there
are no actions, suits, investigations or proceedings pending or, to Borrower’s
knowledge, threatened at law, in equity, in arbitration or by or before any
other authority involving or affecting:  (i) the Borrower that could
reasonably be expected to have a material adverse effect on the financial
condition or any material part of the assets or properties of the Borrower
pledged by Borrower or any Third Party under any Facility Document; or (iii) any
of the transactions contemplated in the Facility Documents.  There are
currently no material judgments entered against the Borrower and the Borrower is
not in default with respect to any judgment, writ, injunction, order, decree or
consent of any court or other judicial authority, which default is likely to
have or has had a material adverse effect on the prospects or condition of the
Borrower; in the event that the Borrower is a partnership, limited liability
partnership, corporation or limited liability company, the Borrower also
represents and warrants that it is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, and has all requisite power and authority to execute, deliver and
perform its obligations under the Facility Documents.

    

    Each
borrowing request by the Borrower under this Note shall constitute a
representation and warranty that the statements above are true and correct in
all material respects both on the date of such request and on the date of the
borrowing.  Each borrowing request shall also constitute a
representation that no Event of Default under this Note has occurred and is
continuing or would result from such borrowing.

     

    7.           Events of
Default.  If any of the following events of default shall occur
(each an “Event of
Default”):

    

    (a)           the
Borrower shall fail to pay (i) any principal of this Note as and when due
and payable, (ii) interest thereon within five (5) Banking Days of
when due and payable or (iii) any other amount payable hereunder within
ten (10) Banking Days of when due and payable;

    (b)           any
representation or warranty made or deemed made by the Borrower in this Note or
by the Borrower or any Third Party in any Facility Document to which it is a
party, or in any certificate, document, opinion or financial or other statement
furnished under or in connection with a Facility Document, shall prove to have
been incorrect in any material respect when made or deemed made;

    (c)           the
Borrower or any Third Party shall fail to perform or observe any term, covenant
or agreement contained in any Facility Document on its part to be performed or
observed; provided, however, that if any such failure is capable of remedy and
if a grace period is not specifically provided for in such Facility Document,
performance of such other term, covenant or agreement, such failure shall not
constitute an Event of Default unless it is not remedied within
ten (10) Banking Days of the Borrower’s receipt of the Bank’s request
that such failure be remedied;

    (d)           (d)  (i) the
Borrower shall fail to pay when due any of its indebtedness (including, but not
limited to, indebtedness for borrowed money) or any interest or premium thereon
in an aggregate amount of at least two hundred fifty thousand dollars ($250,000)
or (ii) the Borrower shall default or otherwise fail to perform any agreement to
which the Borrower is party or by which it is bound which results in the
holder(s) of indebtedness having the right, whether or not exercised, to
accelerate the maturity thereof in an aggregate amount of at least two hundred
fifty thousand dollars ($250,000) or (iii) any “Event of Default” (as defined in
any Convertible Note), or any event that with the giving of notice or passage of
time or both would constitute such an Event of Default, shall
occur;

    (e)           the
Borrower or any Third Party: (i) shall generally not, or be unable to, or shall
admit in writing its inability to, pay its debts as its debts become due; (ii)
shall make an assignment for the benefit of creditors, or petition or apply to
any tribunal for the appointment of a custodian, receiver or trustee for its or
a substantial part of its assets; (iii) shall commence any proceeding under any
law relating to bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation; (iv) shall have had any such petition filed, or any
such proceeding shall have been commenced against it, in which an adjudication
is made or order for relief is entered or which remains undismissed for a period
of 30 days; (v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property; or (vi) takes any action
effectuating, approving or consenting to any of the events described in clauses
(i) through (v);

    (f)           the
Borrower or any Third Party shall be determined or adjudged incompetent or
otherwise incapacitated by a court of competent jurisdiction, die, dissolve or
for any reason cease to be in existence or shall merge or
consolidate;

    (g)           (i) the
Borrower is involved in a proceeding which may result in a forfeiture of all or
a substantial part of the Borrower’s assets or (ii) a judgment is entered
against the Borrower for the payment of in an aggregate amount of at least one
hundred thousand dollars ($100,000);

    (h)           there
is, in the opinion of the Bank, a material adverse change in the business,
prospects or financial condition of the Borrower;

    (i)           any
Facility Document granting a security interest at any time and for any reason
shall cease to create a valid and perfected first priority security interest in
and to the property purported to be subject to the Facility Document or ceases
to be in full force and effect or is declared null and void, or the validity or
enforceability of any Facility Document is contested by any party to the
Facility Document, or such signatory to the Facility Document denies it has any
further liability or obligation under the Facility Document;

    (j)  without the prior
written consent of the Bank, the Borrower incurs or permits to exist (i) any
debt for borrowed money (and any refinancing of such debt), other than debt
for borrowed money (a) incurred hereunder, (b) listed on the
September 30, 2006 form 10Q filed with SEC by the Borrower or (c) payable
under the Convertible Notes or (ii) any lien or other
encumbrance upon or with respect to any of the Borrower's real or personal
property securing (A) any of the Borrower’s obligations under swap, hedge
or similar agreements or (B) any guaranty or other contingent liability of the
Borrower;

    (k)  without the prior
written consent of the Bank, the Borrower guarantees or otherwise becomes
contingently liable for the indebtedness for borrowed money of any
entity;

    (l)  the Borrower fails to
furnish to the Bank within ten (10) days after filing of the same is
required (after giving effect to any applicable extensions), a signed copy of
the Borrower’s federal tax return;

    (m)  within ninety (90) days
of the end of each year if the Borrower shall not be required under any
applicable law, rule or regulation to file a form 10K with the SEC for such
year, the Borrower fails to furnish to the Bank a copy of its financial
statements for such year (audited by accountants acceptable to the Bank) of each
type, and prepared on a basis consistent with, the financial statements included
in the Borrower’s form 10K filed with the SEC for the then prior year (or of
each type, and prepared on a basis consistent with, the Borrower’s audited
financial statements for such prior year if the Borrower shall not have been
required to file a form 10K with the SEC for such prior year),

    (n)  the Borrower fails to
furnish any additional financial information that the Bank may reasonably
request from time to time promptly upon the Bank’s request;

    (o) without the prior written consent
of the Bank in each instance, the Borrower agrees or consents to, or suffers to
exist, any amendment, modification, supplement or waiver of any provision of the
Convertible Note Purchase Agreement, any Convertible Note or any other document,
instrument or agreement delivered as security or collateral for, or a guaranty
of, or in connection with, or as support for, any of the foregoing, if such
amendment, modification, supplement or waiver could reasonably be expected to
have an adverse effect on the “Collateral” (as
defined in the Security Agreement) or a material adverse effect on the ability
of the Borrower to satisfy its obligations under the Facility Documents or the
Bank’s ability to realize upon the Collateral.

    

    THEN, the
Bank may, by notice to the Borrower, declare the Commitment terminated and the
unpaid principal amount of this Note, accrued interest thereon and all other
amounts payable under this Note due and payable whereupon the same shall become
and be forthwith due and payable without presentment, demand, protest, notice of
acceleration or intention to accelerate or further notice of any kind, all of
which are hereby expressly waived by the Borrower; provided that in the case of
an event of default described in clause (e) above, the Commitment shall be
immediately terminated and the unpaid principal amount of this Note, accrued
interest and other amounts payable under this Note shall be immediately due and
payable; and provided further that in the case of an Event of Default described
in clause (f) above due to the death of any Third Party, the Bank shall not be
obligated to, and shall not make, any additional Loans for a period of 60 days
from and including the date of the occurrence of such Event of
Default.

     

    8.           Expenses.  The
Borrower agrees to reimburse the Bank on demand for all reasonable costs,
expenses and charges (including, without limitation, fees and charges of counsel
and costs allocated by internal legal counsel) in connection with the
preparation or modification of the Facility Documents, performance or
enforcement of the Facility Documents, or the defense or prosecution of any
rights of the Bank pursuant to any Facility Documents.

    

    9.           Jurisdiction.  To
the maximum extent not prohibited by applicable law, the  Borrower
hereby irrevocably:  (i) submits to the jurisdiction of any New York
state or United States federal court sitting in New York City over any action or
proceeding arising out of this Note; (ii) agrees that all claims in respect of
such action or proceeding may be held and determined in such New York state or
federal court; (iii) agrees that any action or proceeding brought against the
Bank may be brought only in a New York state or United States federal court
sitting in New York county; (iv)  consents to the service of process
in any such action or proceeding in either of said courts by mailing thereof by
the Bank by registered or certified mail, postage prepaid, to the Borrower at
its address specified on the signature page hereof, or at the Borrower’s most
recent mailing address as set forth in the records of the Bank; and (v) waives
any defense on the basis of an inconvenient forum.

    

    The Borrower agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit or proceeding in such state and
hereby waives any defense on the basis of an inconvenient
forum.  Nothing herein shall affect the right of the Bank to serve
legal process in any other manner permitted by law or affect the right of the
Bank to bring any action or proceeding against the Borrower or its property in
the courts of any other jurisdiction.

    

    10.           Waiver of Jury
Trial.  THE BORROWER AND THE BANK EACH WAIVE ANY RIGHT TO JURY
TRIAL.

     

    11.           Miscellaneous.  (a)  The
provisions of this Note are intended to be severable.  If for any
reason any provisions of this Note shall be held invalid or unenforceable in
whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions thereof in any
jurisdiction.

    (b)           No
amendment, modification, supplement or waiver of any provision of this Note nor
consent to departure by the Borrower therefrom shall be effective unless the
same shall be in writing and signed by the Borrower and the Bank, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

    (c)           No
failure on the part of the Bank to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right.  The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

    (d)           As
used herein, the term Borrower shall include all signatories hereto, if more
than one.  In such event, the obligations, representations and
warranties of the Borrower hereunder shall be joint and several.  This
Note shall be binding on the Borrower and its successors and assigns and shall
inure to the benefit of the Bank and its successors and assigns, except that the
Borrower may not delegate any of its obligations hereunder without the prior
written consent of the Bank.  With the consent of the Borrower, not to
be unreasonably withheld, the Bank may assign all or a portion of its rights and
obligations under this Note; provided that such consent shall not be required
(i) at any time that an Event of Default has occurred and is continuing, (ii) in
connection with any assignment to an affiliate of the Bank, or (iii) in
connection with any pledge or collateral assignment to secure obligations to a
Federal Reserve Bank.

    (e)           Anything
herein to the contrary notwithstanding, the obligations of the Borrower under
this Note shall be subject to the limitation that payments of interest shall not
be required to the extent that receipt thereof would be contrary to provisions
of law applicable to the Bank limiting rates of interest which may be charged or
collected by the Bank.

    (f)           Unless
otherwise agreed in writing, notices shall be given to the Bank and the Borrower
at their telecopier numbers (confirmed by telephone to their telephone numbers)
or addresses set forth in the signature page of this Note, or such other
telecopier (and telephone) number or address communicated in writing by either
such party to the other.  Notices to the Bank shall be effective upon
receipt.

    (g)           The
obligations of the Borrower under Sections 3, 5, 8, 9 and 10 hereof shall
survive the repayment of the Loans.

    (h)           Each
reference herein to the Bank shall be deemed to include its successors,
endorsees, and assigns, in whose favor the provisions hereof shall
inure.  Each reference herein to the Borrower shall be deemed to
include the heirs, executors, administrators, legal representatives, successors
and assigns of the Borrower, all of whom shall be bound by the provisions
hereof.

    (i)           This
Note may be signed in any number of counterparts, all of which taken together
shall constitute one and the same instrument.

    

    12.           Governing Law.  This
Note shall be governed by and construed in accordance with the laws of the State
of New York, without regard to the conflict of laws principles, and with the
laws of the United States of America as applicable.

    

    The
rest of this page is intentionally blank.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    Address
for Borrowing Notices:

    

    JPMorgan
Chase Bank, N.A.

    Attn:  Juan
Espitia

    1111
Fannin Street

    14th
Floor

    Houston,
Texas 77002

    Telecopier:  (800)
576-3217

    Telephone:  (713)
750-3217

    

    With a
courtesy copy to

    

    JPMorgan
Chase Bank, N.A.

    Attn:  Nancy
A. Sheppard

    560
Mission Street, 19th
floor

    San
Francisco, CA 94105

    Telecopier:  415
315 8272

    Telephone:  415
315 8285

    

    Address
for All Notices to the Bank Other than Borrowing Notices:

    

    JPMorgan
Chase Bank, N.A.

    Private
Bank Credit

    Attn: Arn Welles

    345 Park
Avenue, Floor 04

    New York,
NY 10154-0004

    Telecopier:  (212464-2531

    Telephone:  (212)
464-1883

    

    With a
courtesy copy to

    

    JPMorgan
Chase Bank, N.A.

    Attn:  Nancy
A. Sheppard

    560
Mission Street, 19th
floor

    San
Francisco, CA 94105

    Telecopier:  415
315 8272

    Telephone:  415
315 8285

    

    

    Avistar
Communications Corporation

    

    

    

    By:           /s/ Robert
Habig                                                      

    Name:
Robert Habig

    Title:
Chief Financial Officer

    

    

    

    By:           /s/ Simon
Moss                                                      

    Name:
Simon Moss

    Title:
Chief Executive Officer

    

    

    Address
for Notices to the Borrower:

    

    Attn:  Robert
Habig

    Avistar
Communications Corporation

    1875 S.
Grant Street, 10th
Floor

    San
Mateo, CA 94402

    Telecopier:  (650)
525-1360

    Telephone:  (650)
525-3310

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	
              State
      of _________

            	
              )

            

    

    ) ss.:

    
      	
              County
      of ________

            	
              )

            

    

    

    On the ____ day of December in the year
2008, before me, the undersigned, personally appeared _____________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity, and that
by his/her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

    

    

    ____________________________________

    Notary Public

    

    

    
      	
              State
      of _________

            	
              )

            

    

    ) ss.:

    
      	
              County
      of ________

            	
              )

            

    

    

    On the ____ day of December in the year
2008, before me, the undersigned, personally appeared _____________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her capacity, and that
by his/her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

    

    

    ____________________________________

    Notary Public

    

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Exhibit
A

    

    FORM OF
BORROWING NOTICE

    

    

    Date:  __________________

    

    

    JPMorgan
Chase Bank, N.A.

    Attn:  Juan
Espitia

    1111
Fannin Street

    14th
Floor

    Houston,
Texas 77002

    Telecopier:  (800)
576-3217

    Telephone:  (713)
750-3217

    

    Gentlemen:

    

    The
undersigned hereby requests a Loan (the “Requested Loan”)
under the Amended and Restated Revolving Credit Promissory Note (Libor/Prime)
dated as of December 22, 2008 by the undersigned to your order with a
maximum principal amount of $10,000,000 (the “Note”).  Initial
capitalized terms used herein without definition have the meanings given such
terms in the Note.

    

    The
undersigned is faxing this Borrowing Notice to you (i) if the Requested Loan is
a Prime Loan, by 12:00 noon (NYC time) on the “Disbursement Date”
(as specified below) and  (ii) if the Requested Loan is a Libor Loan,
by 12:00 noon (NYC time) at least three Banking Days prior to the
Disbursement Date.  The undersigned will promptly mail the signed
original of this Borrowing Notice to you.

    

    Please
book the Requested Loan as follows:

    

    Disbursement
Date:                                       _________­­________
___, 20___

     

    Amount:                                       $                                               

     

    Type:                                                      ____
LIBOR                              ____
Prime

     

    LIBOR Period (if
applicable):                                                      ____
1 month    ____ 3 months    ____ 6
months

     

    Disbursement
Instructions*:                                                                

     

    
      	
               
      

            	 

    

     

    
      	
               
      

            	 

    

     

    
      	
               
      

            	 

    

     

    
      	
               
      

            	 

    

     

    

     

    
      	
              Purpose:

            	
              The
      proceeds of the Requested Loan shall be used for working capital
      purposes.

            

    

     

    Immediately
upon funding of the Requested Loan, the aggregate principal amount of all Loans
then outstanding will be $__________________. *

    

    In
witness whereof, the undersigned has executed this Borrowing Notice as of the
date first written above.

    

    

    Avistar
Communications Corporation

    

    

    By:           

    Name:                      

    Title:           

    

    By:           

    Name:                      

    Title:           

    

    

    

    [Agreed
as of date first written above:

    

    

    

    Gerald J. Burnett]
*

    

    

    

    

    

    cc:           JPMorgan
Chase Bank, N.A.

    Attn:  Nancy A.
Sheppard

    560
Mission Street, 19th
floor

    San
Francisco, CA 94105

    Telecopier:  (415)
315-8272

    Telephone:  (415)
315-8285

    

    

    

      

    

      
      *           If
$8,000,000 or greater, the signature of Gerald J. Burnett will be
required.

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