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                                                                   EXHIBIT 10.13

                              CONSULTING AGREEMENT

               CONSULTING AGREEMENT, dated as of April 3, 2002 (this
"Agreement"), by and between STARBASE CORPORATION, a Delaware corporation (the
"Company"), and Mr. William R. Stow III (the "Consultant").

               WHEREAS, the Consultant has been employed by the Company as the
Chief Executive Officer of the Company and Chairman of the Board of Directors of
the Company; and

               WHEREAS, concurrently with entering into this Agreement, the
Consultant is resigning as the Chief Executive Officer of the Company and
Chairman of the Board of Directors of the Company; and

               WHEREAS, the Company desires to retain the consulting services of
the Consultant as a consultant to the Company, and the Consultant is willing to
provide such consulting services, all upon the terms, provisions and conditions
set forth in this Agreement.

               NOW THEREFORE, in consideration of the premises hereinafter set
forth and for other good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged, the Consultant and the Company
agree as follows:

               1. Resignation as Chief Executive Officer and Chairman of the
Board. As of the date of this Agreement (the "Effective Date"), the Consultant
hereby acknowledges and agrees that he has resigned as Chief Executive Officer
of the Company and Chairman of the Board of Directors of the Company, and the
Company has accepted the Consultant's resignation as Chief Executive Officer of
the Company and Chairman of the Board of Directors of the Company. Nothing
herein is intended to effect or modify the Consultant's right to remain a member
of the Company's Board of Directors in accordance with the Company's by-laws and
applicable law.

               2. Term. The term of this Agreement shall commence on the date of
this Agreement and shall expire on the first anniversary of the date of this
Agreement, subject to earlier termination pursuant to the provisions of Section
5 of this Agreement (the "Term").

               3. Duties. During the Term, the Consultant shall report to the
interim Chairman of the Board of Directors of the Company, currently Mr. John
Snedegar, or his successor as Chairman of the Board of Directors (the
"Chairman"), or such other individual as the Board of Directors shall reasonably
designate, in its sole discretion (the "Board Designee"). The Consultant shall
perform only those duties as may be reasonably assigned to him from time to time
by the Chairman or the Board Designee, as the case may be. The Consultant shall
not have authority to legally bind the Company or enter into any contract or
agreement on behalf of the Company, and the Consultant and shall not represent
to any third-party that he is authorized to legally bind the Company. The
Consultant shall use his best efforts, skills and abilities to diligently
perform his duties under this Agreement and shall keep the Chairman or the Board
Designee, as the case may be, reasonably informed of his conduct in performing
services required under this Agreement. The Consultant's services shall be
limited to advising the

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Company on product development and strategic alliances, including, without
limitation, potential mergers and acquisitions, the actual scope of such
services to be reasonably set and delineated by the Chairman or the Board
Designee, as the case may be.

               4. Consulting Fee, Benefits and Related Items.

               (a) During the Term, the Company shall pay to the Consultant, and
the Consultant shall accept from the Company, as full compensation for the
performance of services under this Agreement, an annual consulting fee of
$250,000, (the "Consulting Fee"). The Consulting Fee shall be payable at the
time of, and in accordance with the Company's regular payroll practices. The
Consultant shall be responsible for the payment of all taxes on the Consulting
Fee and the Company shall have no obligation in respect thereof.

               (b) During the Term, the Company shall continue to provide the
Consultant with medical insurance benefits at the Company's cost and expense
(including coverage for him and his wife) and such other health and insurance
benefits as the Company generally provides to its senior executive officers,
pursuant to plans or policies the Company has in effect for its employees
generally, which plans or policies may be amended from time to time at the
Company's sole discretion. Following the Term, the Company will arrange to
provide the Consultant, at his cost and expense, with medical coverage to the
extent required by COBRA.

               (c) The Company must approve in writing all business expenses to
be incurred by the Consultant in the performance of his duties hereunder prior
to the incurrence of such expense. The Company shall reimburse the Consultant
for all approved business expenses in accordance with its customary practices
and upon submission of proper documentation by the Consultant to the Company
evidencing such expense.

               (d) The Consultant acknowledges and agrees that the Consultant is
obligated to the Company to reimburse the aggregate amount of $10,946.89 for
moving expenses incurred by the Consultant which were not payable by the
Company. Accordingly, the Company shall be entitled to withhold an amount equal
to $912.25 per month from the payments of the Consulting Fee payable to the
Consultant pursuant to Section 4(a) hereof, which amount shall be applied
against the amount owed. If the consulting arrangement established hereby is
terminated prior to the full repayment of the $10,946.89, the Company shall be
entitled to immediate payment by the Consultant of the balance owed.

               (e) With respect to the stock options (the "Options") to purchase
shares of common stock of the Company, par value $.01 per share (the "Common
Stock") which have been granted to the Consultant prior to the date hereof and
are set forth on Schedule I attached hereto, such Options shall continue to be
subject to the agreements and stock option plans under which they were issued
and are presently subject; provided that notwithstanding anything to the
contrary contained in such agreements or plans all vested Options shall continue
to be exercisable for a period equal to (i) one (1) year from the end of the
Term of this Agreement or (ii) such longer period as may be provided in such
agreement or plan. Any unvested Options shall continue to vest during the Term
of this Agreement in accordance with the existing vesting schedules for such
Options.

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               (f) Nothing in this Agreement shall effect the Consultant's
rights, if any, to shares of Common Stock (the "Escrowed Shares") held in escrow
by Montreal Trust Company in accordance with the terms and conditions of that
certain performance escrow agreement.

               (g) The sums and benefits being paid to or provided to the
Consultant pursuant to this Section 4 are in lieu of any other payment,
obligation, distribution, salary, bonus, incentive plan payment, severance pay,
unused accrued vacation pay or any other form of compensation, benefit of any
kind otherwise due, owing or payable by the Company to the Consultant and the
Consultant hereby waives, to the fullest extent permitted by applicable law, any
entitlement that he may have to any such payment, obligation, distribution,
salary, bonus, incentive plan payment, severance payment, unused vacation pay or
any other form of compensation due from the Company prior to the date hereof.

               (h) The Consultant shall not be required to perform his duties
hereunder from any particular location. Within forty-eight (48) hours from the
execution and delivery of this Agreement, the Consultant shall vacate the office
that he presently maintains at the Company's principal executive offices. The
Consultant shall be entitled to remove the computers that he has in his current
office and to use those computers in a home or other office maintained by the
Consultant during the Term of this Agreement. During the Term, the Consultant
shall have access to the Company's e-mail system and subject to such security
measures as the Company may require, the Company's network.

               5. Termination.

               The consulting arrangement established by this Agreement may be
terminated prior to the expiration of the Term set forth in Section 1 upon the
occurrence of any of the events set forth in, and subject to the terms of, this
Section 5.

               (a) Death. The consulting arrangement established by this
Agreement will terminate immediately and automatically upon the death of the
Consultant. If the consulting arrangement established by this Agreement is
terminated as a result of the death of the Consultant, then the Consultant's
estate shall be entitled to receive accrued and unpaid Consulting Fees through
the date of such termination.

               (b) Disability. The consulting arrangement established by this
Agreement may be terminated by the Company as of the date the Company provides
notice to the Consultant that it has been terminated due to a "permanent
disability", as defined herein. For purposes of this Agreement, the term
"permanent disability" shall mean the Consultant's inability to perform his
duties under this Agreement due to illness, accident or any other physical
incapacity: (i) for a period of 90 consecutive days, or (ii) for an aggregate of
120 days, whether or not consecutive. If this Agreement is terminated on account
of the permanent disability of the Consultant then the Consultant shall be
entitled to receive accrued and unpaid Consulting Fees through the date of such
termination.

               (c) Cause. For purposes of this Agreement, the term "Cause" shall
mean: (i) any material breach of this Agreement by the Consultant, including
without limitation, the

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performance by the Consultant of any actions purportedly on behalf of the
Company which are not authorized in accordance with Section 3 of this Agreement,
(ii) failure of the Consultant to perform his services in a reasonably diligent
manner and in good faith, which in the reasonable judgment of the Company is
likely to have a material adverse effect on the Company, its financial condition
or reputation (iii) failure of the Consultant to exercise reasonable diligence
in following the reasonable and lawful directions of the Chairman or the Board
Designee, as the case may be, regarding the performance of his services; or (iv)
the appropriation of a material business opportunity or series of opportunities
which in the aggregate are material to the Company, including securing any
personal profit in connection with any transaction entered into on behalf of the
Company; provided that nothing in this clause shall restrict or apply to any
profit that the Consultant would receive in transaction as a result of his
ownership of any common stock or Options. In the event that the Company should
elect to terminate the Consultant for Cause, the Company shall deliver to the
Consultant written notice specifying the nature of such Cause in reasonable
detail and the Consultant shall have a period of ten (10) days after his receipt
of such written notice to cure any non-compliance set forth therein, and in such
event, Cause shall exist if, in the determination of the Board of Directors, in
its sole discretion, the Consultant shall fail to cure such noncompliance within
the period prescribed above.

               (d) The Consultant shall have the right to terminate the
consulting arrangement established by this Agreement upon not less than ten (10)
business days prior written notice to the Company.

               (e) A termination of the consulting arrangement established by
this Agreement shall not effect the rights of the Consultant to (i) his vested
Options, except to the extent provided in the agreements or plans governing such
Options or (ii) the Escrowed Shares, except to the extent provided for in the
agreement governing the Escrowed Shares.

               6. Non-Solicitation; Non-Competition; Non-Disclosure.

               (a) From the date hereof and during the Term, the Consultant
agrees that he will not, directly or indirectly, as an equity owner, director,
employee, consultant, lender, agent or in any other capacity, (i) engage in any
activity intended to terminate, disrupt or interfere with the Company's or any
of its subsidiary's or affiliate's relationship with a customer, supplier,
vendor, lessor or other person, or which is inconsistent with the Consultant's
duties under this Agreement or in conflict with the interests of the Company,
(ii) engage or participate in, or have any interest in any corporation, entity
or other person that engages or participates in any business or activity engaged
or participated in by the Company on the Effective Date, or (iii) engage or
participate in, or have an interest in any corporation, entity or other person
that participates in a merger, acquisition or consolidation with the Company.
From the date hereof and for a period of one year following the Term, the
Consultant agrees that he will not, directly or indirectly, as an equity owner,
director, employee, consultant, lender, agent or in any other capacity, solicit,
induce or entice for employment, retention or affiliation, or recommend to any
corporation, entity or other person the solicitation, inducement or enticement
for employment, retention or affiliation of, any employee, consultant,
independent contractor or other person employed or retained by, or affiliated
with, the Company, or any of its subsidiaries or affiliates. For purposes of
this Section 6(a), the Consultant will be deemed directly or indirectly to be
engaged or

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participating in the operation of such a business or activity, or to have an
interest in a corporation, entity or other person, if he is a proprietor,
partner, joint venturer, shareholder, director, officer, lender, manager,
employee, consultant, advisor or agent or if he, directly or indirectly
(including as a member of a group), controls all or any part thereof; provided,
that nothing in this Section 6(a) shall prohibit the Consultant from holding
less than two percent (2%) of a class of a corporation's outstanding securities
that are listed on a national securities exchange or traded in the
over-the-counter market.

               (b) The Consultant hereby acknowledges and agrees that during the
period of his employment with the Company he was in a confidential relationship
with the Company and has had access to confidential information and trade
secrets of the Company, its subsidiaries and affiliates (collectively, the
"Confidential Information"). Confidential Information includes, but is not
limited to, all confidential or any proprietary information regarding the
Company, its subsidiaries and affiliates or any aspect of their business or
operations, including, but not limited to, customer and client lists, financial
information, price lists, pricing strategies, marketing and sales strategies and
procedures, computer programs, databases and software, supplier, vendor and
service information, personnel information, operating procedures and techniques,
business plans and strategies, terms of products strategic alliances (both those
in existence and those contemplated operational techniques, intellectual
property strategies, the status of the Company's intellectual property, quality
control procedures and systems, internal control procedures, accounting and
reporting systems, special projects, employee compensation, personnel, and all
other records, files, and information in respect of the Company. The Consultant
shall maintain the strictest confidentiality of all Confidential Information and
shall not use or permit the use of, or disclose, discuss, communicate or
transmit or permit the disclosure, discussion, communication or transmission of,
any Confidential Information. This Section 6(b) shall not apply to (i)
information that, by means other than the Consultant's deliberate or inadvertent
disclosure, becomes generally known to the public, or (ii) information the
disclosure of which is compelled by law (including judicial or administrative
proceedings and legal process). In that connection, in the event that the
Consultant is requested or required (by oral question, interrogatories, requests
for information or documents, subpoenas, civil investigative demand or other
legal process) to disclose any Confidential Information, the Consultant agrees
to provide the Company with prompt written notice of such request or requirement
so that the Company may seek an appropriate protective order or relief therefrom
or may waive the requirements of this Section 6(b). If, failing the entry of a
protective order or the receipt of a waiver hereunder, the Consultant is, in the
opinion of counsel, compelled to disclose Confidential Information under pain of
liability for contempt or other censure or penalty, the Consultant may disclose
such Confidential Information to the extent so required. In the event of a
breach or threatened breach by the Consultant of any of the provisions of this
Section 6(b), the Company shall be entitled to an injunction to be issued by any
court or tribunal of competent jurisdiction to restrain the Consultant from
committing or continuing any such violation. In any proceeding for an
injunction, the Consultant agrees that his ability to answer in damages, or his
or the Company's ability to take any other lawful remedial action, shall not be
a bar or be interposed as a defense to the granting of a temporary or permanent
injunction against him. The Consultant acknowledges that the Company will not
have an adequate remedy at law in the event of any breach by him as aforesaid
and that the Company may suffer irreparable damage and injury in the event of
such a breach by him. Nothing contained herein shall be construed as prohibiting
the Company from

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pursuing any other remedy or remedies available to the Company in respect of
such breach or threatened breach.

               (c) Each of the Company and the Consultant, hereby agrees that
from and after the date of the execution and delivery of this Agreement, neither
will directly or indirectly, provide to any person or entity any information
that concerns or relates to the negotiation of or circumstances leading to the
execution of this Agreement or to the terms and conditions hereof, except to (i)
the extent that such disclosure is specifically required by applicable law or
legal process; (ii) such party's tax advisors as may be necessary for the
preparation of tax returns or other similar reports required by law, (iii) such
party's attorneys as may be necessary to secure advice concerning the
interpretation of this Agreement or in connection with the enforcement of this
Agreement; (iv) members of the Consultant's immediate family; or (v) to members
of the Board of Directors of the Company. Each of the Company and the Consultant
agrees that prior to disclosing such information under clauses (ii), (iii) or
(iv) of this Section 6, such party will inform the recipients that they are
bound by the limitations of this Section 6 and such disclosure will only be
permitted if the recipient agrees to be bound by such limitations. Each of the
Company and the Consultant further agrees that any disclosure of such
information by any such recipients not in accordance with this Section 6 shall
be deemed to be a disclosure by the disclosing party in breach of this
Agreement.

               (d) It is expressly acknowledged and agreed by the Consultant
that his obligations set forth in this Section 6 were an inducement to the
Company to enter into this Agreement and that the scope of the provisions set
forth in this Section 6 are in each case reasonable and necessary in light of
the circumstances. If, for any reason, any aspect of any of the provisions set
forth in this Section 6 as they apply to the Consultant is determined by a court
of competent jurisdiction to be unreasonable, illegal, invalid or unenforceable,
the provisions shall, to the fullest extent possible, be modified by the court
to the minimum extent required by applicable law in order to make the provisions
legal, valid and enforceable to the fullest extent permitted by applicable law
and the determination by the Court shall not affect the legality, validity and
enforceability of this Agreement in any other jurisdiction. The Consultant
hereby acknowledges and agrees that his services were and continue to be of a
unique character and he expressly grants the Company the right to enforce the
provisions of this Section 6 through the use of all remedies available at law or
in equity, including, but not limited to, obtaining a court order, injunction or
other equitable relief prohibiting the Consultant from threatening to breach,
breaching or continuing to breach any provision of this Section 6, without the
Company being required to post a bond or other security or prove any amount of
actual damages. If the Consultant is adjudicated by a court of competent
jurisdiction to have violated any of the provisions of this Section 6, the
Company shall be excused and discharged from any obligation to make payments to
the Consultant pursuant to this Agreement for the period commencing from the
date of the violations.

               (e) Unless a provision in this Section 6 by its terms have a
limited period of duration, the provisions contained in this Section 6 shall
survive the expiration of the Term or the termination of this Agreement for any
reason whatsoever.

               7. Other Agreements. (a) The Consultant agrees not to publicly
disparage, denigrate, libel, slander, or make any public negative statements,
directly or indirectly, about the

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Company or its affiliates or subsidiaries or any of their respective directors,
officers or advisors at any time, whether orally or in writing, except for
disparaging or negative remarks made under oath, or pursuant to subpoena. The
Company agrees not to publicly disparage, denigrate, libel, slander, or make any
public negative statements, directly or indirectly, about the Consultant at any
time, whether orally or in writing, except for disparaging or negative remarks
made under oath, or pursuant to subpoena. The Company and the Consultant agree
that the only statement made to third parties or contained in any press release
relating to the Consultant's resignation as Chairman and Chief Executive Officer
of the Company shall be consistent with the statement set forth on Schedule 2
attached hereto. Prior to issuing any press release related to the aforesaid
resignation, the Company shall furnish a copy thereof to the Consultant for his
review. The Consultant hereby waives any and all claims, causes of action,
damages or other rights he may have against the Company as of the date hereof.
The Consultant agrees not to, and waives any right to, commence any litigation,
suit or other action or proceeding against the Company based upon or relating to
the circumstances giving rise to the resignation of the Consultant as the
Chairman and Chief Executive Officer of the Company.

               (b) Nothing in Section 7(a) shall prohibit the Consultant from
bringing any action, suit or other proceeding which is based upon acts of which
would be considered to be disparagement, libel or slander.

               8. Notices. Any notice or demand which is required or provided to
be given under this Agreement shall be in writing and (except for payments which
may be sent by first class United States mail) shall be deemed to have been
sufficiently given and received for all purposes when delivered by hand, or
facsimile or one (1) business day after delivered to a nationally recognized
overnight courier for delivery (with all costs paid), or five (5) days after
being sent by certified or registered mail, postage and charges prepaid, return
receipt requested, to the following addresses:

               (a)    if to the Company:

                      Starbase Corporation
                      4 Hutton Centre, Suite 800
                      Santa Ana, CA 92707
                      Facsimile: (714) 445-4404
                      Attention: Chairman

                      with a copy to:

                      Jenkens & Gilchrist Parker Chapin LLP
                      The Chrysler Building
                      405 Lexington Avenue
                      New York, New York 10174
                      Attention: Martin Eric Weisberg, Esq.
                      Facsimile: 212-704-6157

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               (b)    if to the Consultant:

                      William R. Stow III
                      10 Alessandria
                      Newport Beach, CA 92657

                      with a copy to:

                      Greenberg Glusker Fields Claman & Machtinger LLP
                      1900 Avenue of the Stars, Suite 2100
                      Los Angeles, CA 90067-4550
                      Attention: Robert F. Marshall, Esq.
                      Facsimile: 310-553-0687

or to such other address as a party shall have designated by notice given to the
other party pursuant hereto.

               9. Miscellaneous.

               (a) Entire Agreement. Except with respect to the agreements and
plan governing the Options and Escrowed Shares, as applicable, this Agreement
sets forth the entire understanding and agreement of the parties and, except as
specifically set forth herein, merges and supersedes any prior and/or
contemporaneous understandings and agreements (whether written or oral) between
the parties pertaining to the subject matter hereof, including, without
limitation, any rights the Consultant may have under any employment agreement or
separation agreement entered into between the Company and the Consultant prior
to the date hereof.

               (b) Modification; Amendment. This Agreement may not be modified
or terminated orally, and no modification, termination or attempted waiver of
any of the provisions hereof shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced. This Agreement may not
be amended, except by an instrument in writing which is executed by the
Consultant and the Company. Neither party shall have any obligation to mitigate
any damages it may incur.

               (c) Waiver. Failure of a party to enforce one or more of the
provisions of this Agreement or to require at any time performance of any of the
obligations hereof shall not be construed to be a waiver of such provisions by
such party nor to in any way affect the validity of this Agreement or such
party's right thereafter to enforce any provision of this Agreement, nor to
preclude such party from taking any other action at any time which it would
legally be entitled to take. Any waiver of a provision hereof shall be limited
to the purpose and instance for which it was given.

               (d) Severability. If any provision of this Agreement is held to
be illegal, invalid or unenforceable by a court of competent jurisdiction, such
invalidity or unenforceability shall not affect the legality, validity and
enforceability of the other provisions of this Agreement and the provisions held
to be illegal, invalid or unenforceable shall be enforced as nearly as possible
according to its original terms and intent to eliminate such illegality,
invalidity or unenforceability.

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               (e) Jurisdiction; Venue, etc. This Agreement shall be subject to
the exclusive jurisdiction of the courts of Orange County, California. Any
breach of any provision of this Agreement shall be deemed to be a breach
occurring in the State of California by virtue of a failure to perform an act
required to be performed in the State of California, and the parties irrevocably
and expressly agree to submit to the jurisdiction of the courts of Orange
County, California for the purpose of resolving any disputes among them relating
to this Agreement or the transactions contemplated by this Agreement and waive
any objections on the grounds of forum non conveniens or otherwise. The parties
hereto agree to service of process by certified or registered United States
mail, postage prepaid, addressed to the party in question. The party that
prevails in any action, suit or other proceeding to enforce this Agreement shall
be entitled to be reimbursed for the costs and expenses (including, without
limitation, court costs and attorneys' fees and expenses) incurred by such party
in connection with such action, suit or other proceeding.

               (f) Governing Law. This Agreement is made and executed and shall
be governed by and construed in accordance with the laws of the State of
California, without regard to the conflicts of law principles thereof or any
other laws which would defer to the substantive law of another jurisdiction.
This Agreement shall not be interpreted or construed with any presumption
against the party which causes this Agreement to be drafted.

               (g) Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be an original, and all of which, when
taken together, shall constitute one and the same instrument.

               (h) Headings. Section headings have been inserted in this
Agreement for convenience of reference only, and such headings, shall not have
any effect on the construction or interpretation of this Agreement.

               IN WITNESS WHEREOF, each of the parties hereto has duly executed
this Employment Agreement as of the date set forth above.

                                        STARBASE CORPORATION

                                        By: /s/ JOHN R. SNEDEGAR
                                            --------------------------------
                                             Name: John R. Snedegar
                                             Title: Chairman

                                        /s/ WILLIAM R. STOW
                                        ------------------------------------
                                        William R. Stow III

                                       9<PAGE>
                                                                   EXHIBIT 10.14

                        [SILICON VALLEY BANK LETTERHEAD]

                     ACCOUNTS RECEIVABLE PURCHASE AGREEMENT

        This Accounts Receivable Purchase Agreement (the "Agreement") is made on
this 19TH day of APRIL, 2002, by and between Silicon Valley Bank ("Buyer")
having a place of business at the address specified above and STARBASE
CORPORATION, a DELAWARE corporation, ("Seller") having its principal place of
business and chief executive office at 4 Hutton Centre Drive, Suite 800, Santa
Ana, CA 92707 and with a FAX number of 714-445-4482.

1. DEFINITIONS. When used herein, the following terms shall have the following
meanings.

        "Account Balance" shall mean, on any given day, the gross amount of all
Purchased Receivables unpaid on that day.

        "Account Debtor" shall have the meaning set forth in the California
Uniform Commercial Code and shall include any person liable on any Purchased
Receivable, including without limitation, any guarantor of the Purchased
Receivable and any issuer of a letter of credit or banker's acceptance.

        "Adjustments" shall mean all discounts, allowances, returns, disputes,
counterclaims, offsets, defenses, rights of recoupment, rights of return,
warranty claims, or short payments, asserted by or on behalf of any Account
Debtor with respect to any Purchased Receivable.

        "Collateral Handling Fee" shall have the meaning as set forth in Section
3.3 hereof.

        "Advance" shall have the meaning set forth in Section 2.2 hereof.

        "Collateral" shall have the meaning set forth in Section 8 hereof.

        "Collections" shall mean all good funds received by Buyer from or on
behalf of an Account Debtor with respect to Purchased Receivables.

        "Compliance Certificate" shall mean a certificate, in a form provided by
Buyer to Seller, which contains the certification of the chief financial officer
of Seller that, among other things, the representations and warranties set forth
in this Agreement are true and correct as of the date such certificate is
delivered.

        "Event of Default" shall have the meaning set forth in Section 9 hereof.

        "Finance Charges" shall have the meaning set forth in Section 3.2
hereof.

        "Facility Fee" shall have the meaning set forth in Section 3.6 hereof.

        "Invoice Transmittal" shall mean a writing signed by an authorized
representative of Seller which accurately identifies the receivables which
Buyer, at its election, may purchase, and includes for each such receivable the
correct amount owed by the Account Debtor, the name and address of the Account
Debtor, the invoice number, the invoice date and the account code.

        "Minimum Finance Charge" is $15,000.00 per month.

        "Obligations" shall mean all advances, financial accommodations,
liabilities, obligations, covenants and duties owing, arising, due or payable by
Seller to Buyer of any kind or nature, present or future, arising under or in
connection with this Agreement or under any other document, instrument or
agreement, whether or not evidenced by any note, guarantee or other instrument,
whether arising on account or by overdraft, whether direct or indirect
(including those acquired by assignment) absolute or contingent, primary or
secondary, due or to become due, now owing or hereafter arising, and however
acquired; including, without limitation, all Advances, Finance Charges,
Collateral Handling Fees, interest, Repurchase Amounts, fees, expenses,
professional fees and attorneys' fees and any other sums chargeable to Seller
hereunder or otherwise.

        "Prime Rate" shall mean the Buyer's most recently announced "prime
rate," even if it is not Buyer's lowest rate.

        "Purchased Receivables" shall mean all those accounts, receivables,
chattel paper, instruments, contract rights, documents, general intangibles,
letters of credit, drafts, bankers acceptances, and rights to payment, and all
proceeds thereof (all of the foregoing being referred to as "receivables"),
arising out of the invoices and other agreements identified on or delivered with
any Invoice Transmittal delivered by Seller to Buyer which Buyer elects to
purchase and for which Buyer makes an Advance.

        "Refund" shall have the meaning set forth in Section 3.5 hereof.

        "Reserve" shall have the meaning set forth in Section 2.4 hereof.

        "Repurchase Amount" shall have the meaning set forth in Section 4.2
hereof.

        "Reconciliation Date" shall mean the last calendar day of each
Reconciliation Period.

        "Reconciliation Period" shall mean each calendar month of every year.

2. PURCHASE AND SALE OF RECEIVABLES.

     2.1. OFFER TO SELL RECEIVABLES. During the term hereof, and provided that
there does not then exist any Event of Default or any event that with notice,
lapse of time or otherwise would constitute an Event of Default, Seller may
request that Buyer purchase receivables and Buyer may, in its sole discretion,
elect to purchase receivables. Seller shall deliver to Buyer an Invoice
Transmittal with respect to any receivable for which a request for purchase is
made. An authorized representative of Seller shall sign each Invoice Transmittal
delivered to Buyer. Buyer shall be entitled to rely on all the information
provided by

                                                                     Page 1 of 7
<PAGE>

Seller to Buyer on or with the Invoice Transmittal and to rely on the signature
on any Invoice Transmittal as an authorized signature of Seller.

     2.2. ACCEPTANCE OF RECEIVABLES. Buyer shall have no obligation to purchase
any receivable listed on an Invoice Transmittal. Buyer may exercise its sole
discretion in approving the credit of each Account Debtor before buying any
receivable. Upon acceptance by Buyer of all or any of the receivables described
on any Invoice Transmittal, Buyer shall pay to Seller 80 (%) percent of the face
amount of each receivable Buyer desires to purchase, net of deferred revenue,
pre-billed maintenance or other types of pre-billed revenue, and offsets related
to each specific Account Debtor. Such payment shall be the "Advance" with
respect to such receivable. Buyer may, from time to time, in its sole
discretion, change the percentage of the Advance. Upon Buyer's acceptance of the
receivable and payment to Seller of the Advance, the receivable shall become a
"Purchased Receivable." It shall be a condition to each Advance that (i) all of
the representations and warranties set forth in Section 6 of this Agreement be
true and correct on and as of the date of the related Invoice Transmittal and on
and as of the date of such Advance as though made at and as of each such date,
and (ii) no Event of Default or any event or condition that with notice, lapse
of time or otherwise would constitute an Event of Default shall have occurred
and be continuing, or would result from such Advance. Notwithstanding the
foregoing, in no event shall the aggregate amount of all Purchased Receivables
outstanding at any time exceed FOUR MILLION DOLLARS ($4,000,000.00).

      2.3. EFFECTIVENESS OF SALE TO BUYER. Effective upon Buyer's payment of an
Advance, and for and in consideration therefor and in consideration of the
covenants of this Agreement, Seller hereby absolutely sells, transfers and
assigns to Buyer, all of Seller's right, title and interest in and to each
Purchased Receivable and all monies due or which may become due on or with
respect to such Purchased Receivable. Buyer shall be the absolute owner of each
Purchased Receivable. Buyer shall have, with respect to any goods related to the
Purchased Receivable, all the rights and remedies of an unpaid seller under the
California Uniform Commercial Code and other applicable law, including the
rights of replevin, claim and delivery, reclamation and stoppage in transit.

     2.4. ESTABLISHMENT OF A RESERVE. Upon the purchase by Buyer of each
Purchased Receivable, Buyer shall establish a reserve. The reserve shall be the
amount by which the face amount of the Purchased Receivable exceeds the Advance
on that Purchased Receivable (the "Reserve"); provided, the Reserve with respect
to all Purchased Receivables outstanding at any one time shall be an amount not
less than 20%(%) percent of the Account Balance at that time and may be set at a
higher percentage at Buyer's sole discretion. The reserve shall be a book
balance maintained on the records of Buyer and shall not be a segregated fund.

3. COLLECTIONS, CHARGES AND REMITTANCES.

     3.1. COLLECTIONS. In computing Finance Charges on the Obligations, all
checks and other items of payment received by Buyer (including proceeds of
Purchased Receivables and payment of Obligations in full) shall be deemed
applied by Buyer on account of the Obligations THREE BUSINESS DAYS after receipt
by Buyer of immediately available funds; provided, that if Seller is in default
under this Agreement, Buyer shall apply all Collections to Seller's Obligations
hereunder in such order and manner as Buyer may determine. If an item of
collection is not honored or Buyer does not receive good funds for any reason,
the amount shall be included in the Account Balance as if the Collections had
not been received and Finance Charges under Section 3.2 shall accrue thereon.

     3.2. FINANCE CHARGES. On each Reconciliation Date Seller shall pay to Buyer
a finance charge (the "Finance Charges"), which is the greater of (i) Minimum
Finance Charge; or (ii) an amount equal to 5.00(%) percentage pints above Prime
Rate per annum of the gross average daily Account Balance outstanding during the
applicable Reconciliation Period. Buyer shall deduct the accrued Finance Charges
from the Reserve as set forth in Section 3.5 below.

     3.3. COLLATERAL HANDLING FEE. On each Reconciliation Day, Seller will pay
to Buyer a collateral handling fee, equal to .50% per month of the average daily
Account Balance outstanding during the applicable Reconciliation Period. Buyer
shall deduct the Collateral Handling Fee from the Reserve as set forth in
Section 3.5 below.

     3.4. ACCOUNTING. Buyer shall prepare and send to Seller after the close of
business for each Reconciliation Period, an accounting of the transactions for
that Reconciliation Period, including the amount of all Purchased Receivables,
all Collections, Adjustments, Finance Charges, and the Collateral Handling Fee.
The accounting shall be deemed correct and conclusive unless Seller makes
written objection to Buyer within thirty (30) days after the Buyer mails the
accounting to Seller.

     3.5. REFUND TO SELLER. Provided that there does not then exist an Event of
Default or any event or condition that with notice, lapse of time or otherwise
would constitute an Event of Default, Buyer shall refund to Seller by check
after the Reconciliation Date, the amount, if any, which Buyer owes to Seller at
the end of the Reconciliation Period according to the accounting prepared by
Buyer for that Reconciliation Period (the "Refund"). The Refund shall be an
amount equal to:

        (A)(1)  The Reserve as of the beginning of that Reconciliation Period,
                PLUS

           (2)  the Reserve created for each Purchased Receivable purchased
                during that Reconciliation Period, MINUS

        (B) The total for that Reconciliation Period of:

           (1)  the Collateral Handling Fee;

           (2)  Finance Charges;

                                                                     Page 2 of 7
<PAGE>

           (3)  Adjustments;

           (4)  Repurchase Amounts, to the extent Buyer has agreed to accept
                payment thereof by deduction from the Refund;

           (5)  the Reserve for the Account Balance as of the first day of the
                following Reconciliation Period in the minimum percentage set
                forth in Section 2.4 hereof; and

           (6)  all amounts due, including professional fees and expenses, as
set forth in Section 12 for which oral or written demand has been made by Buyer
to Seller during that Reconciliation Period to the extent Buyer has agreed to
accept payment thereof by deduction from the Refund.

In the event the formula set forth in this Section 3.5 results in an amount due
to Buyer from Seller, Seller shall make such payment in the same manner as set
forth in Section 4.3 hereof for repurchases. If the formula set forth in this
Section 3.5 results in an amount due to Seller from Buyer, Buyer shall make such
payment by check, subject to Buyer's rights under Section 4.3 and Buyer's rights
of offset and recoupment.

     3.6. FACILITY FEE. A fully earned, non-refundable facility fee of
$10,000.00 ("Facility Fee") shall be due upon execution of this Agreement.

4. RECOURSE AND REPURCHASE OBLIGATIONS.

     4.1. RECOURSE. Buyer's acquisition of Purchased Receivables from Seller
shall be with full recourse against Seller. In the event the Obligations exceed
the amount of Purchased Receivables and Collateral, Seller shall be liable for
any deficiency.

     4.2. SELLER'S AGREEMENT TO REPURCHASE. Seller agrees to pay to Buyer on
demand, the full face amount, or any unpaid portion, of any Purchased
Receivable:

          (A) which remains unpaid ninety (90) calendar days after the invoice
          date; or

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

          (C) with respect to which there has been any breach of warranty or
          representation set forth in Section 6 hereof or any breach of any
          covenant contained in this Agreement; or

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

together with all reasonable attorneys' and professional fees and expenses and
all court costs incurred by Buyer in collecting such Purchased Receivable and/or
enforcing its rights under, or collecting amounts owed by Seller in connection
with, this Agreement (collectively, the "Repurchase Amount").

     4.3. SELLER'S PAYMENT OF THE REPURCHASE AMOUNT OR OTHER AMOUNTS DUE BUYER.
When any Repurchase Amount or other amount owing to Buyer becomes due, Buyer
shall inform Seller of the manner of payment which may be any one or more of the
following in Buyer's sole discretion: (a) in cash immediately upon demand
therefor; (b) by delivery of substitute invoices and an Invoice Transmittal
acceptable to Buyer which shall thereupon become Purchased Receivables; (c) by
adjustment to the Reserve pursuant to Section 3.5 hereof; (d) by deduction from
or offset against the Refund that would otherwise be due and payable to Seller;
(e) by deduction from or offset against the amount that otherwise would be
forwarded to Seller in respect of any further Advances that may be made by
Buyer; or (f) by any combination of the foregoing as Buyer may from time to time
choose.

     4.4. SELLER'S AGREEMENT TO REPURCHASE ALL PURCHASED RECEIVABLES. Upon and
after the occurrence of an Event of Default, Seller shall, upon Buyer's demand
(or, in the case of an Event of Default under Section 9(B), immediately without
notice or demand from Buyer) repurchase all the Purchased Receivables then
outstanding, or such portion thereof as Buyer may demand. Such demand may, at
Buyer's option, include and Seller shall pay to Buyer immediately upon demand,
cash in an amount equal to the Advance with respect to each Purchased Receivable
then outstanding together with all accrued Finance Charges, Adjustments,
Collateral Handling Fees, attorney's and professional fees, court costs and
expenses as provided for herein, and any other Obligations. Upon receipt of
payment in full of the Obligations, Buyer shall immediately instruct Account
Debtors to pay Seller directly, and return to Seller any Refund due to Seller.
For the purpose of calculating any Refund due under this Section only, the
Reconciliation Date shall be deemed to be the date Buyer receives payment in
good funds of all the Obligations as provided in this Section 4.4.

5. POWER OF ATTORNEY. Seller does hereby irrevocably appoint Buyer and its
successors and assigns as Seller's true and lawful attorney in fact, and hereby
authorizes Buyer, regardless of whether there has been an Event of Default, (a)
to sell, assign, transfer, pledge, compromise, or discharge the whole or any
part of the Purchased Receivables; (b) to demand, collect, receive, sue, and
give releases to any Account Debtor for the monies due or which may become due
upon or with respect to the Purchased Receivables and to compromise, prosecute,
or defend any action, claim, case or proceeding relating to the Purchased
Receivables, including the filing of a claim or the voting of such claims in any
bankruptcy case, all in Buyer's name or Seller's name, as Buyer may choose; (c)
to prepare, file and sign Seller's name on any notice, claim, assignment,
demand, draft, or notice of or satisfaction of lien or mechanics' lien or
similar document with respect to Purchased Receivables; (d) to notify all
Account Debtors with respect to the Purchased Receivables to pay Buyer directly;
(e) to receive, open, and dispose of all mail addressed to Seller for the
purpose of collecting the Purchased Receivables; (f) to endorse Seller's name on
any checks or other forms of payment on the Purchased Receivables; (g) to
execute on behalf of Seller any and all instruments,

                                                                     Page 3 of 7
<PAGE>

documents, financing statements and the like to perfect Buyer's interests in the
Purchased Receivables and Collateral; and (h) to do all acts and things
necessary or expedient, in furtherance of any such purposes. If Buyer receives a
check or item which is payment for both a Purchased Receivable and another
receivable, the funds shall first be applied to the Purchased Receivable and, so
long as there does not exist an Event of Default or an event that with notice,
lapse of time or otherwise would constitute an Event of Default, the excess
shall be remitted to Seller. Upon the occurrence and continuation of an Event of
Default, all of the power of attorney rights granted by Seller to Buyer
hereunder shall be applicable with respect to all Purchased Receivables and all
Collateral.

6. REPRESENTATIONS, WARRANTIES AND COVENANTS.

     6.1. RECEIVABLES' WARRANTIES, REPRESENTATIONS AND COVENANTS. To induce
Buyer to buy receivables and to renders its services to Seller, and with full
knowledge that the truth and accuracy of the following are being relied upon by
the Buyer in determining whether to accept receivables as Purchased Receivables,
Seller represents, warrants, covenants and agrees, with respect to each Invoice
Transmittal delivered to Buyer and each receivable described therein, that:

          (A) Seller is the absolute owner of each receivable set forth in the
          Invoice Transmittal and has full legal right to sell, transfer and
          assign such receivables;

          (B) The correct amount of each receivable is as set forth in the
          Invoice Transmittal and is not in dispute;

          (C) The payment of each receivable is not contingent upon the
          fulfillment of any obligation or contract, past or future and any and
          all obligations required of the Seller have been fulfilled as of the
          date of the Invoice Transmittal;

          (D) Each receivable set forth on the Invoice Transmittal is based on
          an actual sale and delivery of goods and/or services actually
          rendered, is presently due and owing to Seller, is not past due or in
          default, has not been previously sold, assigned, transferred, or
          pledged, and is free of any and all liens, security interests and
          encumbrances other than liens, security interests or encumbrances in
          favor of Buyer or any other division or affiliate of Silicon Valley
          Bank;

          (E) There are no defenses, offsets, or counterclaims against any of
          the receivables, and no agreement has been made under which the
          Account Debtor may claim any deduction or discount, except as
          otherwise stated in the Invoice Transmittal;

          (F) Each Purchased Receivable shall be the property of the Buyer and
          shall be collected by Buyer, but if for any reason it should be paid
          to Seller, Seller shall promptly notify Buyer of such payment, shall
          hold any checks, drafts, or monies so received in trust for the
          benefit of Buyer, and shall promptly transfer and deliver the same to
          the Buyer;

          (G) Buyer shall have the right of endorsement, and also the right to
          require endorsement by Seller, on all payments received in connection
          with each Purchased Receivable and any proceeds of Collateral;

          (H) Seller, and to Seller's best knowledge, each Account Debtor set
          forth in the Invoice Transmittal, are and shall remain solvent as that
          term is defined in the United States Bankruptcy Code and the
          California Uniform Commercial Code, and no such Account Debtor has
          filed or had filed against it a voluntary or involuntary petition for
          relief under the United States Bankruptcy Code;

          (I) Each Account Debtor named on the Invoice Transmittal will not
          object to the payment for, or the quality or the quantity of the
          subject matter of, the receivable and is liable for the amount set
          forth on the Invoice Transmittal;

          (J) Seller will remit all payment's for accounts to Buyer by the close
          of business on each Friday along with a detailed cash receipts journal
          and shall immediately notify and direct all of the Seller's Account
          Debtor's to make all payment's for Seller's accounts to a lockbox
          account established with Buyer ("Lockbox") or to wire transfer
          payments to a cash collateral account that Buyer controls. It will be
          considered an immediate Event of Default if the Lockbox is not set-up
          and operational within 45 days from the date of this Agreement; and

          (K) All receivables forwarded to and accepted by Buyer after the date
          hereof, and thereby becoming Purchased Receivables, shall comply with
          each and every one of the foregoing representations, warranties,
          covenants and agreements referred to above in this Section 6.1.

     6.2. ADDITIONAL WARRANTIES, REPRESENTATIONS AND COVENANTS. In addition to
the foregoing warranties, representations and covenants, to induce Buyer to buy
receivables and to render its services to Seller, Seller hereby represents,
warrants, covenants and agrees that:

          (A) Seller will not assign, transfer, sell, or grant , or permit any
          lien or security interest in any Purchased Receivables or Collateral
          to or in favor of any other party, without Buyer's prior written
          consent;

          (B) The Seller's name, form of organization, chief executive office,
          and the place where the records concerning all Purchased Receivables
          and Collateral are kept is set forth at the beginning of this
          Agreement, Collateral is located only at the location set forth in the
          beginning of this Agreement, or, if located at any additional
          location, as set forth on a schedule attached to this Agreement, and
          Seller will give Buyer at least thirty (30) days prior written notice
          if such name, organization, chief executive office or other locations
          of Collateral or records concerning Purchased Receivables or
          Collateral is changed or added and shall execute any documents
          necessary to perfect Buyer's interest in the Purchased Receivables and
          the Collateral;

          (C) Seller shall (i) pay all of its normal gross payroll for
          employees, and all federal and state taxes, as and when due, including
          without limitation all payroll and withholding taxes and state sales
          taxes; (ii) deliver at any time and from time to time at Buyer's
          request, evidence satisfactory to Buyer that all such amounts have
          been paid to the proper taxing authorities; and (iii) if requested by
          Buyer, pay its payroll and related taxes through a bank or an
          independent payroll service acceptable to Buyer.

          (D) Seller has not, as of the time Seller delivers to Buyer an Invoice
          Transmittal, or as of the time Seller accepts any Advance from Buyer,
          filed a voluntary petition for relief under the United States
          Bankruptcy Code or had filed against it an involuntary petition for
          relief;

                                                                     Page 4 of 7
<PAGE>

          (E) If Seller owns, holds or has any interest in, any copyrights
          (whether registered, or unregistered), patents or trademarks, and
          licenses of any of the foregoing, such interest has been disclosed to
          Buyer and is specifically listed and identified on a schedule to this
          Agreement, and Seller shall immediately notify Buyer if Seller
          hereafter obtains any interest in any additional copyrights, patents,
          trademarks or licenses that are significant in value or are material
          to the conduct of its business;

          (F) Seller shall provide Buyer with: (i) a Compliance Certificate on a
          quarterly basis to be received by Buyer no later than 30 days
          following each calendar quarter or on a more frequent or other basis
          if and as requested by Buyer, (iii) balance sheet and income statement
          of Seller within 30 days after the end of each month;

          (G) Seller shall provide Buyer with, (i) as soon as available, but no
          later than 30 days following each Reconciliation Period, a deferred
          revenue report, an aged listing of accounts receivable and accounts
          payable, a company prepared balance sheet and income statement,
          prepared under GAAP, consistently applied, covering Seller's
          operations during the period; (ii) a prompt report of any legal
          actions pending or threatened against Seller that could result in
          damages or costs to Seller; (iii) budgets, sales projections,
          operating plans or other financial information Buyer reasonably
          requests; and (iv) prompt notice of any material change in the
          composition of the Intellectual Property, including any subsequent
          ownership right of Seller in or to any Copyright, Patent or Trademark
          not shown in any intellectual property security agreement between
          Seller and Buyer or knowledge of an event that materially adversely
          affects the value of the Intellectual Property;

          (H) On request by Buyer, Seller will promptly furnish any information
          Buyer may reasonably request to determine financial condition of
          Seller, including, but not limited to all of Seller's Obligations, and
          the condition of any of Seller's receivables which may include but are
          not limited to Purchased Receivables;

          (I) Seller will maintain its primary operating deposit accounts with
          Buyer; and

          (J) Effective April 30, 2002, Seller will maintain its aged payables
          over 90 days not to exceed 35% of its total accounts payable aging at
          anytime.

7. ADJUSTMENTS. In the event of a breach of any of the representations,
warranties, or covenants set forth in Section 6.1, or in the event any
Adjustment or dispute is asserted by any Account Debtor, Seller shall promptly
advise Buyer and shall, subject to the Buyer's approval, resolve such disputes
and advise Buyer of any adjustments. Unless the disputed Purchased Receivable is
repurchased by Seller and the full Repurchase Amount is paid, Buyer shall remain
the absolute owner of any Purchased Receivable which is subject to Adjustment or
repurchase under Section 4.2 hereof, and any rejected, returned, or recovered
personal property, with the right to take possession thereof at any time. If
such possession is not taken by Buyer, Seller is to resell it for Buyer's
account at Seller's expense with the proceeds made payable to Buyer. While
Seller retains possession of said returned goods, Seller shall segregate said
goods and mark them "property of Silicon Valley Bank."

8. SECURITY INTEREST. To secure the prompt payment and performance to Buyer of
all of the Obligations, Seller hereby grants to Buyer a continuing lien upon and
security interest in all of Seller's now existing or hereafter arising rights
and interest in the following, whether now owned or existing or hereafter
created, acquired, or arising, and wherever located (collectively, the
"Collateral"):

          (A) All accounts, receivables, contract rights, chattel paper,
          instruments, documents, letters of credit, bankers acceptances,
          drafts, checks, cash, securities, and general intangibles (including,
          without limitation, all claims, causes of action, deposit accounts,
          guaranties, rights in and claims under insurance policies (including
          rights to premium refunds), rights to tax refunds, copyrights,
          patents, trademarks, rights in and under license agreements, and all
          other intellectual property);

          (B) All inventory, including Seller's rights to any returned or
          rejected goods, with respect to which Buyer shall have all the rights
          of any unpaid seller, including the rights of replevin, claim and
          delivery, reclamation, and stoppage in transit;

          (C ) All monies, refunds and other amounts due Seller, including,
          without limitation, amounts due Seller under this Agreement (including
          Seller's right of offset and recoupment);

          (D) All equipment, machinery, furniture, furnishings, fixtures, tools,
          supplies and motor vehicles;

          (E) All farm products, crops, timber, minerals and the like (including
          oil and gas);

          (F) All accessions to, substitutions for, and replacements of, all of
          the foregoing;

          (G) All books and records pertaining to all of the foregoing; and

          (H) All proceeds of the foregoing, whether due to voluntary or
          involuntary disposition, including insurance proceeds.

          Seller is not authorized to sell, assign, transfer or otherwise convey
any Collateral without Buyer's prior written consent, except for the sale of
finished inventory in the Seller's usual course of business. Seller agrees to
sign UCC financing statements, in a form acceptable to Buyer, and any other
instruments and documents requested by Buyer to evidence, perfect, or protect
the interests of Buyer in the Collateral. Seller agrees to deliver to Buyer the
originals of all instruments, chattel paper and documents evidencing or related
to Purchased Receivables and Collateral.

9. DEFAULT. The occurrence of any one or more of the following shall constitute
an Event of Default hereunder.

          (A) Seller fails to pay any amount owed to Buyer as and when due;

          (B) There shall be commenced by or against Seller any voluntary or
          involuntary case under the United States Bankruptcy Code, or any
          assignment for the benefit of creditors, or appointment of a receiver
          or custodian for any of its assets;

          (C) Seller shall become insolvent in that its debts are greater than
          the fair value of its assets, or Seller is generally not paying its
          debts as they become due or is left with unreasonably small capital;

          (D) Any involuntary lien, garnishment, attachment or the like is
          issued against or attaches to the Purchased Receivables or any
          Collateral;

                                                                     Page 5 of 7
<PAGE>

          (E) Seller shall breach any covenant, agreement, warranty, or
          representation shall constitute an immediate default hereunder;

          (F) Seller is not in compliance with, or otherwise is in default
          under, any term of any document, instrument or agreement evidencing a
          debt, obligation or liability of any kind or character of Seller, now
          or hereafter existing, in favor of Buyer or any division or affiliate
          of Silicon Valley Bank, regardless of whether such debt, obligation or
          liability is direct or indirect, primary or secondary, joint, several
          or joint and several, or fixed or contingent, together with any and
          all renewals and extensions of such debts, obligations and
          liabilities, or any part thereof;

          (G) An event of default shall occur under any guaranty executed by any
          guarantor of the Obligations of Seller to Buyer under this Agreement,
          or any material provision of any such guaranty shall for any reason
          cease to be valid or enforceable or any such guaranty shall be
          repudiated or terminated, including by operation of law;

          (H) A default or event of default shall occur under any agreement
          between Seller and any creditor of Seller that has entered into a
          subordination agreement with Buyer;

          (I) Any creditor that has entered into a subordination agreement with
          Buyer shall breach any of the terms of or not comply with such
          subordination agreement; or

          (J) (i) There is a material adverse change in the business,
          operations, or condition (financial or otherwise) of the Seller, or
          (ii) there is a material impairment of the prospect of repayment of
          any portion of the Obligations or (iii) there is a material impairment
          of the value or priority of Buyer's security interests in the
          Collateral.

10. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default, (1)
without implying any obligation to buy receivables, Buyer may cease buying
receivables or extending any financial accommodations to Seller; (2) all or a
portion of the Obligations shall be, at the option of and upon demand by Buyer,
or with respect to an Event of Default described in Section 9(B), automatically
and without notice or demand, due and payable in full; and (3) Buyer shall have
and may exercise all the rights and remedies under this Agreement and under
applicable law, including the rights and remedies of a secured party under the
California Uniform Commercial Code, all the power of attorney rights described
in Section 5 with respect to all Collateral, and the right to collect, dispose
of, sell, lease, use, and realize upon all Purchased Receivables and all
Collateral in any commercial reasonable manner. Seller and Buyer agree that any
notice of sale required to be given to Seller shall be deemed to be reasonable
if given five (5) days prior to the date on or after which the sale may be held.
In the event that the Obligations are accelerated hereunder, Seller shall
repurchase all of the Purchased Receivables as set forth in Section 4.4.

11. ACCRUAL OF INTEREST. If any amount owed by Seller hereunder is not paid when
due, including, without limitation, amounts due under Section 3.5, Repurchase
Amounts, amounts due under Section 12, and any other Obligations, such amounts
shall bear interest at a per annum rate equal to the per annum rate of the
Finance Charges until the earlier of (i) payment in good funds or (ii) entry of
a final judgment thereof, at which time the principal amount of any money
judgment remaining unsatisfied shall accrue interest at the highest rate allowed
by applicable law.

12. FEES, COSTS AND EXPENSES; INDEMNIFICATION. The Seller will pay to Buyer
immediately upon demand all fees, costs and expenses (including fees of
attorneys and professionals and their costs and expenses) that Buyer incurs or
may from time to time impose in connection with any of the following: (a)
preparing, negotiating, administering, and enforcing this Agreement or any other
agreement executed in connection herewith, including any amendments, waivers or
consents in connection with any of the foregoing, (b) any litigation or dispute
(whether instituted by Buyer, Seller or any other person) in any way relating to
the Purchased Receivables, the Collateral, this Agreement or any other agreement
executed in connection herewith or therewith, (c) enforcing any rights against
Seller or any guarantor, or any Account Debtor, (d) protecting or enforcing its
interest in the Purchased Receivables or the Collateral, (e) collecting the
Purchased Receivables and the Obligations, and (f) the representation of Buyer
in connection with any bankruptcy case or insolvency proceeding involving
Seller, any Purchased Receivable, the Collateral, any Account Debtor, or any
guarantor. Seller shall indemnify and hold Buyer harmless from and against any
and all claims, actions, damages, costs, expenses, and liabilities of any nature
whatsoever arising in connection with any of the foregoing.

13. SEVERABILITY, WAIVER, AND CHOICE OF LAW. In the event that any provision of
this Agreement is deemed invalid by reason of law, this Agreement will be
construed as not containing such provision and the remainder of the Agreement
shall remain in full force and effect. Buyer retains all of its rights, even if
it makes an Advance after an Event of Default. If Buyer waives an Event of
Default, it may enforce a later Event of Default. Any consent or waiver under,
or amendment of, this Agreement must be in writing. Nothing contained herein, or
any action taken or not taken by Buyer at any time, shall be construed at any
time to be indicative of any obligation or willingness on the part of Buyer to
amend this Agreement or to grant to Seller any waivers or consents. This
Agreement has been transmitted by Seller to Buyer at Buyer's office in the State
of California and has been executed and accepted by Buyer in the State of
California. This Agreement shall be governed by and interpreted in accordance
with the internal laws of the State of California.

14. NOTICES. All notices shall be given to Buyer and Seller at the addresses or
faxes set forth on the first page of this Agreement and shall be deemed to have
been delivered and received: (a) if mailed, three (3) calendar days after
deposited in the United States mail, first class, postage pre-paid, (b) one (1)
calendar day after deposit with an overnight mail or messenger service; or (c)
on the same date of confirmed transmission if sent by hand delivery, telecopy,
telefax or telex.

15. JURY TRIAL. SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT THE

                                                                     Page 6 of 7
<PAGE>

FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT; AND (c) REPRESENT AND WARRANT THAT IT HAS REVIEWED THIS WAIVER, HAS
DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS LEGAL COUNSEL,
AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.

16. TERM AND TERMINATION. The term of this Agreement shall be for one (1) year
from the date hereof, and from year to year thereafter unless terminated in
writing by Buyer or Seller. Seller and Buyer shall each have the right to
terminate this Agreement at any time. Notwithstanding the foregoing, any
termination of this Agreement shall not affect Buyer's security interest in the
Collateral and Buyer's ownership of the Purchased Receivables, and this
Agreement shall continue to be effective, and Buyer's rights and remedies
hereunder shall survive such termination, until all transactions entered into
and Obligations incurred hereunder or in connection herewith have been completed
and satisfied in full.

17. TITLES AND SECTION HEADINGS. The titles and section headings used herein are
for convenience only and shall not be used in interpreting this Agreement.

18. OTHER AGREEMENTS. The terms and provisions of this Agreement shall not
adversely affect the rights of Buyer or any other division or affiliate of
Silicon Valley Bank under any other document, instrument or agreement. The terms
of such other documents, instruments and agreements shall remain in full force
and effect notwithstanding the execution of this Agreement. In the event of a
conflict between any provision of this Agreement and any provision of any other
document, instrument or agreement between Seller on the one hand, and Buyer or
any other division or affiliate of Silicon Valley Bank on the other hand, Buyer
shall determine in its sole discretion which provision shall apply. Seller
acknowledges specifically that any security agreements, liens and/or security
interests currently securing payment of any obligations of Seller owing to Buyer
or any other division or affiliate of Silicon Valley Bank also secure Seller's
obligations under this Agreement, and are valid and subsisting and are not
adversely affected by execution of this Agreement. Seller further acknowledges
that (a) any collateral under other outstanding security agreements or other
documents between Seller and Buyer or any other division or affiliate of Silicon
Valley Bank secures the obligations of Seller under this Agreement and (b) a
default by Seller under this Agreement constitutes a default under other
outstanding agreements between Seller and Buyer or any other division or
affiliate of Silicon Valley Bank.

     IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the
day and year above written.

SELLER: STARBASE CORPORATION

By /s/ DOUGLAS S. NORMAN
   -------------------------------

Title  CFO
      ----------------------------

BUYER: SILICON VALLEY BANK

By /s/ MIKE FIELD
   -------------------------------

Title  SVP
      ----------------------------

                                                                     Page 7 of 7
<PAGE>

                                   EXHIBIT "A"

                  TO FINANCING STATEMENT AND SECURITY AGREEMENT

This FINANCING STATEMENT and SECURITY AGREEMENT covers the following types or
items of property (in addition to, and without limiting the types of property
set forth on page 1 hereof):

A)      All accounts, receivables, contract rights, chattel paper, instruments,
        documents, letters of credit, bankers acceptances, drafts, checks, cash,
        securities, deposit accounts, and general intangibles (including,
        without limitation, all claims, causes of action, guaranties, rights in
        and claims under insurance policies (including rights to premium
        refunds), rights to tax refunds, copyrights, patents, trademarks, rights
        in and under license agreements, and all other intellectual property);

B)      All inventory, including Seller's rights to any returned or rejected
        goods, with respect to which Buyer shall have all the rights of any
        unpaid seller, including the rights of replevin, claim and delivery,
        reclamation, and stoppage in transit;

C)      All monies, refunds and other amounts due Seller, including, without
        limitation, amounts due Seller under this Agreement (including Seller's
        right of offset and recoupment);

D)      All equipment, machinery, furniture, furnishings, fixtures, tools,
        supplies and motor vehicles;

E)      All farm products, crops, timber, minerals and the like (including oil
        and gas);

F)      All accessions to, substitutions for, and replacements of, all of the
        foregoing;

G)      All books and records pertaining to all of the foregoing; and

H)      All proceeds of the foregoing, whether due to voluntary or involuntary
        disposition, including insurance proceeds.

INITIALS      D.S.N.
         ---------------

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