Document:

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                                                                 EXHIBIT 10.28

[COMERICA LOGO]
              CORPORATION RESOLUTIONS AND INCUMBENCY CERTIFICATION
              AUTHORITY TO PROCURE LOANS
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I certify that I am the duly elected and qualified Secretary of Silicon Image,
Inc. a Delaware corporation (the "Corporation") and the keeper of the records of
the Corporation; that the following is a true and correct copy of resolutions
duly adopted by the Board of Directors of the Corporation in accordance with its
bylaws and applicable statutes.

COPY OF RESOLUTIONS:

Be it Resolved, That:

1.   Any (insert number required to sign) ( / ), one of the following (insert
     titles only) CEO and CFO of the Corporation are/is authorized, for, on
     behalf of, and in the name of the Corporation to:

     (a)  Negotiate and procure loans, letters of credit and other credit or
          financial accommodations from Comerica Bank-California (the "Bank"), a
          California Banking corporation , up to an amount not exceeding
          $1,290,000 ,

     (b)  Discount with the Bank, commercial or other business paper belonging
          to the Corporation made or drawn by or upon third parties, without
          limit as to amount;

     (c)  Purchase, sell, exchange, assign, endorse for transfer and/or deliver
          certificates and/or instruments representing stocks, bonds, evidences
          of Indebtedness or other securities owned by the Corporation. whether
          or not registered in the name of the Corporation.

     (d)  Give security for any liabilities of the Corporation to the Bank by
          grant, security interest, assignment, lien, deed of trust or mortgage
          upon any real or personal property, tangible or intangible of the
          Corporation; and

     (e)  Execute and deliver in form and content as may be required by the Bank
          any and all notes, evidences of Indebtedness, applications for letters
          of credit, guaranties, subordination agreements, loan and security
          agreements, financing statements, assignments, liens,, deeds of trust,
          mortgages, trust receipts and other agreements, instruments or
          documents to carry out the purposes of these Resolutions, any or all
          of which may relate to all or to substantially all of the
          Corporation's property and assets.

2.   Said Bank be and it is authorized and directed to pay the proceeds of any
     such loans or discounts as directed by the persons so authorized to sign,
     whether so payable to the order of any of said persons in their individual
     capacities or not, and whether such proceeds are deposited to the
     individual credit of any of said persons or not;

3.   Any and all agreements, instruments and documents previously executed and
     acts and things previously done to carry out the purposes of these
     Resolutions are ratified, confirmed and approved as the act or acts of the
     Corporation.

4.   These Resolutions shall continue in force, and the Bank may consider the
     holders of said offices and their signatures to be and continue to be as
     set forth in a certified copy of these Resolutions delivered to the Bank,
     until notice to the contrary in writing is duly served on the Bank (such
     notice to have no effect on any action previously taken by the Bank in
     reliance on these Resolutions).

5.   Any person, corporation or other legal entity dealing with the Bank may
     rely upon a certificate signed by an officer of the Bank to effect that
     these Resolutions and any agreement, instrument or document executed
     pursuant to them are still in full force and effect and binding upon the
     Corporation.

6.   The Bank may consider the holders of the offices of the Corporation and
     their signatures, respectively, to be and continue to be as set forth in
     the Certificate of the Secretary of the Corporation until notice to the
     contrary in writing is duly served on the Bank.

     I further certify that the above Resolutions are in full force and effect
     as of the date of this Certificate; that these Resolutions and any
     borrowings or financial accommodations under these Resolutions have been
     properly noted in the corporate books and records, and have not been
     rescinded, annulled, revoked or modified; that neither the foregoing
     Resolutions nor any actions to be taken pursuant to them are or will be in
     contravention of any provision of the articles of incorporation or bylaws
     of the Corporation or of any agreement, indenture or other instrument to
     which the Corporation is a party or by which it is bound; and that neither
     the articles of incorporation nor bylaws of the Corporation nor any
     agreement, indenture or other instrument to which the Corporation is a
     party or by which it is bound require the vote or consent of shareholders
     of the Corporation to authorize any act, matter or thing described in the
     foregoing Resolutions.

     I further certify that the following named persons have been duly elected
     to the offices set opposite their respective names, that they continue to
     hold these offices at the present time, and that the signatures which
     appear below are the genuine, original signatures of each respectively:

         (PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

     NAME (Type or Print)          TITLE                   SIGNATURE

 David D. Lee                     CEO                     /s/ David D. Lee
---------------------------       ---------------------   ----------------------
 Daniel K. Atler                  CFO                     /s/ Daniel K. Atler
---------------------------       ---------------------   ----------------------

---------------------------       ---------------------   ----------------------

---------------------------       ---------------------   ----------------------

---------------------------       ---------------------   ----------------------

In Witness Whereof, I have affixed my name as Secretary and have caused the
corporate seal of said Corporation to be affixed on ---------------------.

                                                          /s/Daniel K. Atler
                                                       ------------------------
                                                                    Secretary

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     The Above Statements are Correct.
                                      ------------------------------------------
                                      SIGNATURE OF OFFICER OR DIRECTOR OR, IF
                                      NONE, A SHAREHOLDER OTHER THAN SECRETARY
                                      WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE

Failure to complete the above when the Secretary is authorized to sign alone
shall constitute a certification by the Secretary that the Secretary is the sole
Shareholder, Director and Officer of the Corporation.
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<PAGE>

[Comerica Logo]

                         VARIABLE RATE-INSTALLMENT NOTE
<TABLE>
<CAPTION>
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<S>                          <C>                          <C>                                 <C>
Amount                        Note Date                    Maturity Date                      Tax Identification #

$1,290,000.00                 October 18, 2000             October 18, 2003                   77-0396307
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</TABLE>

For Value Received, the undersigned promise(s) to pay to the order of Comerica
Bank-California ("Bank"), at any office of the Bank in the State of California
One Million Two Hundred Ninety Thousand and no/100 Dollars (U.S.) in
installments of $35,833.33 , each Plus interest on the unpaid balance from the
date of this Note at a per annum rate **equal to rate from time to time in
effect plus 2.000 % per annum until maturity, whether by acceleration or
otherwise, or until Default, as later defined, and after that at a default rate
equal to the rate of interest otherwise prevailing under this Note plus 3% per
annum (but in no event in excess of the maximum rate permitted by law). Interest
shall be calculated for the actual number of days the principal is outstanding
on the basis of a 360 day year if this Note evidences a business or commercial
loan or a 365 day year if a consumer loan. The Bank's "base rate" is that annual
rate of interest so designated by the Bank and which is changed by the Bank from
time to time. Interest rate changes will be effective for interest computation
purposes as and when the Bank's base rate changes. Installments of principal and
accrued interest due under this Note shall be payable on the 18th day of each
MONTH , commencing November 18, 2000 ....., and the entire remaining unpaid
balance of principal and accrued interest shall be payable on the Maturity Date
set forth above. If the frequency of principal and interest installments is not
otherwise specified, installments of principal and interest due under this Note
shall be payable monthly on the first day of each month.

In the event the periodic installments set forth above are inclusive of
interest, these installments are calculated at an assumed fixed interest rate
and an assumed amortization term. The amortization term ends on October 18,
2003. In the event this Note evidences a business or commercial loan and the
Bank's base rate changes, the Bank, at its sole option, may from time to time
recalculate the periodic installment amount so that the remaining periodic
installments will fully amortize the remaining loan balance within the remaining
amortization term in equal installments at the interest rate then being charged
under this Note. THE UNDERSIGNED AGREE(S) TO PAY THE PERIODIC INSTALLMENTS AS
THEY MAY BE RECALCULATED BY THE BANK, AT THE BANK'S SOLE OPTION, FROM TIME TO
TIME AND ACKNOWLEDGE(S) THAT A RECALCULATION SHALL NOT AFFECT THE MATURITY DATE
OR THE OTHER TERMS AND PROVISIONS OF THIS NOTE. If this Note or any installment
under this Note shall become payable on a day other than a day on which the Bank
is open for business, this payment may be extended to the next succeeding
business day and interest shall be payable at the rate specified in this Note
during this extension. Any payments of principal in excess of the installment
payments required under this Note need not be accepted by the Bank (except as
required under applicable law), but if accepted shall apply to the installments
last falling due. A late installment charge equal to 5% of each late installment
may be charged on any installment payment not received by the Bank within 10
calendar days after the installment due date, but acceptance of payment of this
charge shall not waive any default under this Note.

This Note and any other indebtedness and liabilities of any kind of the
undersigned (or any of them) to the Bank, and any and all modifications,
renewals or extensions of it, whether joint or several, contingent or absolute,
now existing or later arising, and however evidenced (collectively
"Indebtedness") are secured by and the Bank is granted a security interest in
all items deposited in any account of any of the undersigned with the Bank and
by all proceeds of these items (cash or otherwise), all account balances of any
of the undersigned from time to time with the Bank, by all property of any of
the undersigned from time to time in the possession of the Bank and by any other
collateral, rights and properties described in each and every deed of trust,
mortgage, security agreement, pledge, assignment and other agreement which has
been, or will at any time(s) later be, executed by any (or all) of the
undersigned to or for the benefit of the Bank (collectively "Collateral").
Notwithstanding the above, (i) to the extent that any portion of the
Indebtedness is a consumer loan, that portion shall not be secured by any deed
of trust or mortgage on or other security interest in any of the undersigned's
principal dwelling or in any of the undersigned's real property which is not a
purchase money security interest as to that portion, unless expressly provided
to the contrary in another place, or (ii) if the undersigned (or any of them)
has (have) given or give(s) Bank a deed of trust or mortgage covering real
property, that deed of trust or mortgage shall not secure this Note or any other
indebtedness of the undersigned (or any of them), unless expressly provided to
the contrary in another place.

If the undersigned (or any of them) or any guarantor under a guaranty of all or
part of the Indebtedness ("guarantor") (a) fail(s) to pay this Note or any of
the Indebtedness when due, by maturity, acceleration or otherwise, or fail(s) to
pay any Indebtedness owing on a demand basis upon demand; or (b) fail(s) to
comply with any of the terms or provisions of any agreement between the
undersigned (or any of them) or any guarantor and the Bank; or (c) become(s)
insolvent or the subject of a voluntary or involuntary proceeding in bankruptcy,
or a reorganization, arrangement or creditor composition proceeding, (if a
business entity) cease(s) doing business as a going concern, (if a natural
person) die(s) or become(s) incompetent, (if a partnership) dissolve(s) or any
general partner of it dies, becomes incompetent or becomes the subject of a
bankruptcy proceeding or (if a corporation or a limited liability company) is
the subject of a dissolution, merger or consolidation: or (d) if any warranty or
representation made by any of the undersigned or any guarantor in connection
with this Note or any of the Indebtedness shall be discovered to be untrue or
incomplete; or (e) if there is any termination, notice of termination, or breach
of any guaranty, pledge, collateral assignment or subordination agreement
relating to all or any part of the Indebtedness; or (f) if there is any failure
by any of the undersigned or any guarantor to pay when due any of its
indebtedness (other than to the Bank) or in the observance or performance of any
term, covenant or condition in any document evidencing, securing or relating to
such indebtedness; or (g) if the Bank deems itself insecure, believing that the
prospect of payment of this Note or any of the Indebtedness is impaired or shall
fear deterioration, removal or waste of any of the Collateral; or (h) if there
is filed or issued a levy or writ of attachment or garnishment or other like
judicial process upon the undersigned (or any of them) or any guarantor or any
of the Collateral, including without limit, any accounts of the undersigned (or
any of them) or any guarantor with the Bank, then the Bank, upon the occurrence
of any of these events (each a "Default"), may at its option and without prior
notice to the undersigned (or any of them), declare any or all of the
Indebtedness to be Immediately due and payable (notwithstanding any provisions
contained in the evidence thereof to the contrary), sell or liquidate all or any
portion of the Collateral, set off against the Indebtedness any amounts owing by
the Bank to the undersigned (or any of them), charge interest at the default
rate provided in the document evidencing the relevant Indebtedness and exercise
any one or more of the rights and remedies granted to the Bank by any agreement
with the undersigned (or any of them) or given to it under applicable law. In
addition, if this Note is secured by a deed of trust or mortgage covering real
property, then the trustor or mortgagor shall not mortgage or pledge the
mortgaged premises as security for any other indebtedness or obligations. This
Note, together with all other indebtedness secured by said deed of trust or
mortgage, shall become due and payable immediately, without notice, at the
option of the Bank, (a) if said trustor or mortgagor shall mortgage or pledge
the mortgaged premises for any other Indebtedness or obligations or shall
convey, assign or transfer the mortgaged premises by deed, installment sale
contact or other instrument, or (b) if the title to the mortgaged premises shall
become vested in any other person or party in any manner whatsoever, or (c) if
there is any disposition (through one or more transactions) of legal or
beneficial title to a controlling interest of said trustor or mortgagor. All
payments under this Note shall be in immediately available United States funds,
without setoff or counterclaim.

If this Note is signed by two or more parties (whether by all as makers or by
one or more as an accommodation party or otherwise), the obligations and
undertakings under this Note shall be that of all and any two or more jointly
and also of each severally. This Note shall bind the undersigned, and the
undersigned's respective heirs, personal representatives, successors and
assigns.

The undersigned waive(s) presentment, demand, protest, notice of dishonor,
notice of demand or intent to demand, notice of acceleration or intent to
accelerate, and all other notices and agree(s) that no extension or indulgence
to the undersigned (or any of them) or release, substitution or nonenforcement
of any security, or release or substitution of any of the undersigned, any
guarantor or any other party, whether with or without notice, shall affect the
obligations of any of the undersigned. The undersigned waive(s) all defenses or
right to discharge

<PAGE>

available under Section 3-605 of the California Uniform Commercial Code and
waive(s) all other suretyship defenses or right to discharge. The undersigned
agree(s) that the Bank has the right to sell, assign, or grant participations,
or any interest, in any or all of the Indebtedness, and that, in connection with
this right, but without limiting its ability to make other disclosures to the
full extent allowable, the Bank may disclose all documents and information which
the Bank now or later has relating to the undersigned or the Indebtedness. The
undersigned agree(s) that the Bank may provide information relating to this Note
or to the undersigned to the Bank's parent, affiliates, subsidiaries and service
providers.

The undersigned agree(s) to reimburse the holder or owner of this Note for any
and all costs and expenses (including without limit, court costs, legal expenses
and reasonable attorney fees, whether inside or outside counsel is used, whether
or not suit is instituted and, if suit is instituted, whether at the trial court
level, appellate level, in a bankruptcy, probate or administrative proceeding or
otherwise) incurred in collecting or attempting to collect this Note or incurred
in any other matter or proceeding relating to this Note.

The undersigned acknowledge(s) and agree(s) that there are no contrary
agreements, oral or written, establishing a term of this Note and agree(s) that
the terms and conditions of this Note may not be amended, waived or modified
except in a writing signed by an officer of the Bank expressly stating that the
writing constitutes an amendment, waiver or modification of the terms of this
Note. As used in this Note, the word "undersigned" means, individually and
collectively, each maker, accommodation party, endorser and other party signing
this Note in a similar capacity, if any provision of this Note is unenforceable
in whole or part for any reason, the remaining provisions shall continue to be
effective. THIS NOTE IS MADE IN THE STATE OF CALIFORNIA, AND SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

The maximum interest rate shall not exceed the highest applicable usury ceiling.

THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS NOTE OR THE INDEBTEDNESS.

** The rate in effect from time to time under that certain Time Certificate of
Deposit as more particularly described in the Security Agreement (All Assets)
dated of even date herewith and executed by the undersigned.

         INITIAL HERE   /s/DA

Silicon Image, Inc.

By: /s/ Daniel K. Atler                              Its:     CFO
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    SIGNATURE OF                                           TITLE

By: /s/ David D. Lee                                 Its:     CEO
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    SIGNATURE OF                                           TITLE

By:                                                  Its:
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    SIGNATURE OF                                           TITLE

<TABLE>
<CAPTION>
1060 East Arques Avenue                              Sunnyvale                  CA                        USA             94085
STREET ADDRESS                                       CITY                       STATE                     COUNTRY          ZIP
CODE

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                                 For Bank Use Only                                         CCAR#
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<S>                          <C>                         <C>                         <C>                        <C>
Loan Officer Initials         Loan Group Name             Obligor(s) Name
                              High Technology North       Silicon Image, Inc.
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Loan Officer I.D. No.         Loan Group No.              Obligor #                   Note #                     Amount
78709                         95820                       7207559179                                             $1,290,000.00
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</TABLE>

<PAGE>

                               SECURITY AGREEMENT
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As of October 18, 2000 , for value received, the undersigned ("Debtor") grants
to Comerica Bank-California ("Bank"), a California banking corporation, a
continuing security interest in the Collateral (as defined below) to secure
payment when due, whether by stated maturity, demand acceleration or otherwise,
of all existing and future indebtedness ("indebtedness") to the Bank of Silicon
Image, Inc. ("Borrower") and/or Debtor. Indebtedness includes without limit any
and all obligations or liabilities of the Borrower and/or Debtor to the Bank,
whether absolute or contingent, direct or indirect, voluntary or involuntary,
liquidated or unliquidated, joint or several, known or unknown; any and all
obligations or liabilities for which the Borrower and/or Debtor would otherwise
be liable to the Bank were it not for the invalidity or unenforceability of them
by reason of any bankruptcy, insolvency or other law, or for any other reason;
any and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Borrower and/or Debtor or in connection with any proceeding involving
Bank as a result of any financial accommodation to Borrower and/or Debtor; and
all other costs of collecting Indebtedness, including without limit attorney
fees. Debtor agrees to pay Bank all such costs incurred by the Bank, immediately
upon demand, and until paid all costs shall bear interest at the highest per
annum rate applicable to any of the Indebtedness, but not in excess of the
maximum rate permitted by law. Any reference in this Agreement to attorney fees
shall be deemed a reference to reasonable fees, costs, and expenses of both
in-house and outside counsel and paralegals, whether or not a suit or action is
instituted and to court costs if a suit or action is instituted, and whether
attorney fees or court costs are incurred at the trial court level, on appeal,
in a bankruptcy, administrative or probate proceeding or otherwise.

1.   Collateral shall mean all of the following property Debtor now or later
     owns or has an interest in, wherever located:

     -    specific items listed below and/or on attached Schedule A, if any,
          is/are also included in Collateral: Certificate of Deposit
          #85075-00000-72984 dated in the current amount of $1.29 million the
          name of Silicon Image, Inc. and any and all subsequent renewals
          thereof. The Certificate of Deposit shall be renewed at maturity only
          in amount of unpaid principal and interest.

2.   Warranties, Covenants and Agreements. Debtor warrants, covenants and agrees
     as follows:

     2.1  Debtor shall furnish to Bank, in form and at intervals as Bank may
          request, any information Bank may reasonably request and allow Bank to
          examine, inspect, and copy any of Debtor's books and records. Debtor
          shall, at the request of Bank, mark its records and the Collateral to
          clearly indicate the security interest of Bank under this Agreement.

     2.2  At the time any Collateral becomes, or is represented to be, subject
          to a security interest in favor of Bank, Debtor shall be deemed to
          have warranted that (a) Debtor is the lawful owner of the Collateral
          and has the right and authority to subject it to a security interest
          granted to Bank; (b) none of the Collateral is subject to any security
          interest other than that in favor of Bank and there are no financing
          statements on file, other than in favor of Bank; and (c) Debtor
          acquired its rights in the Collateral in the ordinary course of its
          business.

     2.3  Debtor will keep the Collateral free at all times from all claims,
          liens, security interests and encumbrances other than those in favor
          of Bank. Debtor will not, without the prior written consent of Bank,
          sell, transfer or lease, or permit to be sold, transferred or leased,
          any or all of the Collateral, except (where Inventory is pledged as
          Collateral) for Inventory in the ordinary course of its business and
          will not return any Inventory to its supplier. Bank or its
          representatives may at all reasonable times inspect the Collateral and
          may enter upon all premises where the Collateral is kept or might be
          located.

     2.4  Debtor will do all acts and will execute or cause to be executed all
          writings requested by Bank to establish, maintain and continue a
          perfected and first security interest of Bank in the Collateral.
          Debtor agrees that Bank has no obligation to acquire or perfect any
          lien on or security interest in any asset(s), whether realty or
          personalty, to secure payment of the Indebtedness, and Debtor is not
          relying upon assets in which the Bank may have a lien or security
          interest for payment of the Indebtedness.

     2.5  Debtor will pay within the time that they can be paid without interest
          or penalty all taxes, assessments and similar charges which at any
          time are or may become a lien, charge, or encumbrance upon any
          Collateral, except to the extent contested in good faith and bonded in
          a manner satisfactory to Bank. If Debtor fails to pay any of these
          taxes, assessments, or other charges in the time provided above, Bank
          has the option (but not the obligation) to do so and Debtor agrees to
          repay all amounts so expended by Bank immediately upon demand,
          together with interest at the highest lawful default rate which could
          be charged by Bank on any Indebtedness.

     2.6  Debtor will keep the Collateral in good condition and will protect it
          from loss, damage, or deterioration from any cause. Debtor has and
          will maintain at all times (a) with respect to the Collateral,
          insurance under an "all risk" policy against fire and other risks
          customarily insured against, and (b) public liability insurance and
          other insurance as may be required by law or reasonably required by
          Bank, all of which insurance shall be in amount, form and content, and
          written by companies as may be satisfactory to Bank, containing a
          lender's loss payable endorsement acceptable to Bank. Debtor will
          deliver to Bank immediately upon demand evidence satisfactory to Bank
          that the required insurance has been procured. If Debtor fails to
          maintain satisfactory insurance, Bank has the option (but not the
          obligation) to do so and Debtor agrees to repay all amounts so
          expended by Bank immediately upon demand, together with interest at
          the highest Lawful default rate which could be charged by Bank on any
          Indebtedness.

     2.7  If Accounts Receivable are pledged as Collateral under this Agreement,
          then on each occasion on which Debtor evidences to Bank the account
          balances on and the nature and extent of the Accounts Receivable,
          Debtor shall be deemed to have warranted that except as otherwise
          indicated (a) each of those Accounts Receivable is valid and
          enforceable without performance by Debtor of any act; (b) each of
          those account balances are in fact owing, (c) there are no setoffs,
          recoupments, credits, contra accounts, counterclaims or defenses
          against any of those Accounts Receivable, (d) as to any Accounts
          Receivable represented by a note, trade acceptance, draft or other
          instrument or by any chattel paper or document, the same have been
          endorsed and/or delivered by Debtor to Bank, (e) Debtor has not
          received with respect to any Account Receivable, any notice of the
          death of the related account debtor, nor of the dissolution,
          liquidation, termination of existence, insolvency, business failure,
          appointment of a receiver for, assignment for the benefit of creditors
          by, or filing of a petition in bankruptcy by or against, the account
          debtor, and (f) as to each Account Receivable, the account debtor is
          not an affiliate of Debtor, the United States of America or any
          department, agency or instrumentality of it, or a citizen or resident
          of any jurisdiction outside of the United States. Debtor will do all
          acts and will execute all writings requested by Bank to perform,
          enforce performance of, and collect all Accounts Receivable. Debtor
          shall neither make nor permit any modification, compromise or
          substitution for any Account Receivable without the prior written
          consent of Bank. Debtor shall, at Bank's request, arrange for
          verification of Accounts Receivable directly with account debtors or
          by other methods acceptable to Bank.

     2.8  Debtor at all times shall be in strict compliance with all applicable
          laws, including without limit any laws,

<PAGE>

          ordinances, directives, orders, statutes, or regulations an object of
          which is to regulate or improve health, safety, or the environment
          ("Environmental Laws").

     2.9  If marketable securities are pledged as Collateral under this
          Agreement and if at any time the outstanding principal balance of the
          Indebtedness exceeds N/A of the value of the Collateral, as such value
          is determined from time to time by Bank (herein called the "Margin
          Requirement"), Debtor shall immediately pay or cause to be paid to
          Bank an amount sufficient to reduce the Indebtedness such that the
          remaining principal outstanding thereunder is equal to or less than
          the Margin Requirement. Bank shall apply payments made under this
          paragraph in payment of the Indebtedness in such order and manner of
          application as Bank in its sole discretion elects. In the alternative,
          Debtor may provide or cause to be provided to Bank additional
          collateral in the form of cash or other property acceptable to Bank
          and with a value, as determined by Bank, that when added to the
          Collateral will constitute compliance with the Margin Requirement.

     2.10 If Bank, acting in its sole discretion, redelivers Collateral to
          Debtor or Debtor's designee for the purpose of (a) the ultimate sale
          or exchange thereof; or (b) presentation, collection, renewal, or
          registration of transfer thereof; or (c) loading, unloading, storing,
          shipping, transshipping, manufacturing, processing or otherwise
          dealing with it preliminary to sale or exchange; such redelivery shall
          be in trust for the benefit of Bank and shall not constitute a release
          of Bank's security interest in it or in the proceeds or products of it
          unless Bank specifically so agrees in writing. If Debtor requests any
          such redelivery, Debtor will deliver with such request a duly executed
          financing statement in form and substance satisfactory to Bank. Any
          proceeds of Collateral coming into Debtor's possession as a result of
          any such redelivery shall be held in trust for Bank and immediately
          delivered to Bank for application on the Indebtendess. Bank may (in
          its sole discretion) deliver any or all of the Collateral to Debtor,
          and such delivery by Bank shall discharge Bank from all liability or
          responsibility for such Collateral. Bank, at its option, may require
          delivery of any Collateral to Bank at any time with such endorsements
          or assignments of the Collateral as Bank may request.

     2.11 At any time and without notice, Bank may, as to Collateral other than
          Equipment, Fixtures or Inventory, (a) cause any or all of such
          Collateral to be transferred to its name or to the name of its
          nominees; (b) receive or collect by legal proceedings or otherwise all
          dividends, interest, principal payments and other sums and all other
          distributions at any time payable or receivable on account of such
          Collateral, and hold the same as Collateral, or apply the same to the
          Indebtedness, the manner and distribution of the application to be in
          the sole discretion of Bank; (c) enter into any extension,
          subordination, reorganization, deposit, merger or consolidation
          agreement or any other agreement relating to or affecting such
          Collateral, and deposit or surrender control of such Collateral, and
          accept other property in exchange for such Collateral and hold or
          apply the property or money so received pursuant to this Agreement.

     2.12 Bank may assign any of the Indebtedness and deliver any or all of the
          Collateral to its assignee, who then shall have with respect to
          Collateral so delivered all the rights and powers of Bank under this
          Agreement, and after that Bank shall be fully discharged from all
          liability and responsibility with respect to Collateral so delivered.

     2.13 Debtor delivers this Agreement based solely on Debtor's independent
          investigation of (or decision not to investigate) the financial
          condition of Borrower and is not relying on any information furnished
          by Bank. Debtor assumes full responsibility for obtaining any further
          information concerning the Borrower's financial condition, the status
          of the Indebtedness or any other matter which the undersigned may deem
          necessary or appropriate now or later. Debtor waives any duty on the
          part of Bank, and agrees that Debtor is not relying upon nor expecting
          Bank to disclose to Debtor any fact now or later known by Bank,
          whether relating to the operations or condition of Borrower, the
          existence, liabilities or financial condition of any guarantor of the
          Indebtendess, the occurrence of any default with respect to the
          Indebtedness, or otherwise, notwithstanding any effect such fact may
          have upon Debtor's risk or Debtor's rights against Borrower. Debtor
          knowingly accepts the full range of risk encompassed in this
          Agreement, which risk includes without limit the possibility that
          Borrower may incur Indebtedness to Bank after the financial condition
          of Borrower, or Borrower's ability to pay debts as they mature, has
          deteriorated.

     2.14 Debtor shall defend, indemnify and hold harmless Bank, its employees,
          agents, shareholders, affiliates, officers, and directors from and
          against any and all claims, damages, fines, expenses, liabilites or
          causes of action of whatever kind, including without limit consultant
          fees, legal expenses, and attorney fees, suffered by any of them as a
          direct or indirect result of any actual or asserted violation of any
          law, including, without limit, Environmental Laws, or of any
          remediation relating to any property required by any law, including
          without limit Environmental Laws.

3.   Collection of Proceeds.

     3.1  Debtor agrees to collect and enforce payment of all Collateral until
          Bank shall direct Debtor to the contrary. Immediately upon notice to
          Debtor by Bank and at all times after that, Debtor agrees to fully and
          promptly cooperate and assist Bank in the collection and enforcement
          of all Collateral and to hold in trust for Bank all payments received
          in connection with Collateral and from the sale, lease or other
          disposition of any Collateral, all rights by way of suretyship or
          guaranty and all rights in the nature of a lien or security interest
          which Debtor now or later has regarding Collateral. Immediately upon
          and after such notice, Debtor agrees to (a) endorse to Bank and
          immediately deliver to Bank all payments received on Collateral or
          from the sale, lease or other disposition of any Collateral or arising
          from any other rights or interests of Debtor in the Collateral, in the
          form received by Debtor without commingling with any other funds, and
          (b) immediately deliver to Bank all property in Debtor's possession or
          later coming into Debtor's possession through enforcement of Debtor's
          rights or interests in the Collateral. Debtor irrevocably authorizes
          Bank or any Bank employee or agent to endorse the name of Debtor upon
          any checks or other items which are received in payment for any
          Collateral, and to do any and all things necessary in order to reduce
          these items to money. Bank shall have no duty as to the collection or
          protection of Collateral or the proceeds of it, nor as to the
          preservation of any related rights, beyond the use of reasonable care
          in the custody and preservation of Collateral in the possession of
          Bank. Debtor agrees to take all steps necessary to preserve rights
          against prior parties with respect to the Collateral. Nothing in this
          Section 3.1 shall be deemed a consent by Bank to any sale, lease or
          other disposition of any Collateral.

     3.2  If Accounts Receivable are pledged as Collateral, this Section 3.2
          shall be applicable and Debtor agrees that immediately upon Bank's
          request (whether or not any Event of Default exists) the indebtedness
          shall be on a "remittance basis" as follows: Debtor shall at its sole
          expense establish and maintain (and Bank, at Bank's option, may
          establish and maintain at Debtor's expense): (a) an United States Post
          Office lock box (the "Lock Box"), to which Bank shall have exclusive
          access and control. Debtor expressly authorizes Bank, from time to
          time, to remove contents from the Lock Box, for disposition in
          accordance with this Agreement. Debtor agrees to notify all account
          debtors and other parties obligated to Debtor that all payments made
          to Debtor (other than payments by electronic funds transfer) shall be
          remitted, for the credit of Debtor, to the Lock Box, and Debtor shall
          include a like statement on all invoices; and (b) a non-interest
          bearing deposit account with Bank which shall be titled as designated
          by Bank (the "Cash Collateral Account") to which Bank shall have
          exclusive access and control. Debtor agrees to notify all account
          debtors and other parties obligated to Debtor that all payments made
          to Debtor by electronic funds transfer shall be remitted to the Cash
          Collateral Account, and Debtor, at Bank's request, shall include a
          like statement on all invoices. Debtor shall execute all documents and
          authorizations as required by Bank to establish and maintain the Lock
          Box and the Cash collateral Account.

     3.3  If Accounts Receivable are pledged as Collateral, this Section 3.3
          shall be applicable, and all items or amounts which are remitted to
          the Lock Box, to the Cash Collateral Account, or otherwise delivered
          by or for the benefit of Debtor to Bank on account of partial or full
          payment of, or with respect to, any Collateral shall, at Bank's
          option, (i) be applied to the payment of the Indebtedness, whether
          then due or not, in such order or at such time of application as Bank
          may determine in its sole discretion, or, (ii) be deposited to the
          Cash Collateral Account. Debtor agrees that Bank shall not be liable
          for any loss or damage which Debtor may suffer as a result of Bank's
          processing of items or its exercise of any other rights or remedies
          under this Agreement, including without limitation indirect, special
          or consequential damages, loss of revenues or profits, or any claim,
          demand or action by any third party arising out of or in connection
          with the processing of items or the exercise of any other rights or
          remedies under this Agreement. Debtor agrees to indemnify and hold
          Bank harmless from and against all

<PAGE>

          such third party claims, demands or actions, and all related expenses
          or liabilities, including, without limitation, attorney fees.

4.   Defaults, Enforcement and Application of Proceeds

     4.1  Upon the occurrence of any of the following events (each an "Event of
          Default"), Debtor shall be in default under this Agreement:

          (a)  Any failure to pay the Indebtedness or any other indebtedness
               when due, or such portion of it as may be due, by acceleration or
               otherwise; or

          (b)  Any failure or neglect to comply with, or breach of or default
               under, any term of this Agreement, or any other agreement or
               commitment between Borrower, Debtor, or any guarantor of any of
               the Indebtedness ("Guarantor") and Bank; or

          (c)  Any warranty, representation, financial statement, or other
               information made, given or furnished to Bank by or on behalf of
               Borrower, Debtor, or any Guarantor shall be, or shall prove to
               have been, false or materially misleading when made, given, or
               furnished; or

          (d)  Any loss, theft, substantial damage or destruction to or of any
               Collateral, or the issuance or filing of any attachment, levy,
               garnishment or the commencement of any proceeding in connection
               with any Collateral or of any other judicial process of, upon or
               in respect of Borrower, Debtor, any Guarantor, or any Collateral;
               or

          (e)  Sale or other disposition by Borrower, Debtor, or any Guarantor
               of any substantial portion of its assets or property or voluntary
               suspension of the transaction of business by Borrower, Debtor, or
               any Guarantor, or death, dissolution, termination of existence,
               merger, consolidation, insolvency, business failure, or
               assignment for the benefit of creditors of or by Borrower,
               Debtor, or any Guarantor; or commencement of any proceedings
               under any state or federal bankruptcy or insolvency laws or laws
               for the relief of debtors by or against Borrower, Debtor, or any
               Guarantor; or the appointment of a receiver, trustee, court
               appointee, sequestrator or otherwise, for all or any part of the
               property of Borrower, Debtor, or any Guarantor; or

          (f)  Bank deems the margin of Collateral insufficient or itself
               insecure, in good faith believing that the prospect of payment of
               the Indebtedness or performance of this Agreement is impaired or
               shall fear deterioration, removal, or waste of Collateral.

     4.2  Upon the occurrence of any Event of Default, Bank may at its
          discretion and without prior notice to Debtor declare any or all of
          the Indebtedness to be immediately due and payable, and shall have and
          may exercise any one or more of the following rights and remedies:

          (a)  Exercise all the rights and remedies upon default, in foreclosure
               and otherwise, available to secured parties under the provisions
               of the Uniform Commercial Code and other applicable law;

          (b)  Institute legal proceedings to foreclose upon the lien and
               security interest granted by this Agreement, to recover judgment
               for all amounts then due and owing as Indebtedness, and to
               collect the same out of any Collateral or the proceeds of any
               sale of it;

          (c)  Institute legal proceedings for the sale, under the judgment or
               decree of any court of competent jurisdiction, of any or all
               Collateral; and/or

          (d)  Personally or by agents, attorneys, or appointment of a receiver,
               enter upon any premises where Collateral may then be located, and
               take possession of all or any of it and/or render it unusable;
               and without being responsible for loss or damage to such
               Collateral, hold, operate, sell, Lease, or dispose of all or any
               Collateral at one or more public or private sales, leasings or
               other dispositions, at places and times and on terms and
               conditions as Bank may deem fit, without any previous demand or
               advertisement; and except as provided in this Agreement, all
               notice of sale, Lease or other disposition, and advertisement,
               and other notice or demand, any right or equity of redemption,
               and any obligation of a prospective purchaser or lessee to
               inquire as to the power and authority of Bank to sell, Lease, or
               otherwise dispose of the Collateral or as to the application by
               Bank of the proceeds of sale or otherwise, which would otherwise
               be required by, or available to Debtor under, applicable law are
               expressly waived by Debtor to the fullest extent permitted.

               At any sale pursuant to this Section 4.2, whether under the power
               of sale, by virtue of judicial proceedings or otherwise, it shall
               not be necessary for Bank or a public officer under order of a
               court to have present physical or constructive possession of
               Collateral to be sold. The recitals contained in any conveyances
               and receipts made and given by Bank or the public officer to any
               purchaser at any sale made pursuant to this Agreement shall, to
               the extent permitted by applicable law, conclusively establish
               the truth and accuracy of the matters stated (including, without
               limit, as to the amounts of the principal of and interest on the
               Indebtedness, the accrual and nonpayment of it and advertisement
               and conduct of the sale); and all prerequisites to the sale shall
               be presumed to have been satisfied and performed. Upon any sale
               of any Collateral, the receipt of the officer making the sale
               under judicial proceedings or of Bank shall be sufficient
               discharge to the purchaser for the purchase money, and the
               purchaser shall not be obligated to see to the application of the
               money. Any sale of any Collateral under this Agreement shall be a
               perpetual bar against Debtor with respect to that Collateral.

     4.3  Debtor shall at the request of Bank, notify the account debtors or
          obligors of Bank's security interest in the Collateral and direct
          payment of it to Bank. Bank may, itself, upon the occurrence of any
          Event of Default so notify and direct any account debtor or obligor.

     4.4  The proceeds of any sale or other disposition of Collateral authorized
          by this Agreement shall be applied by Bank first upon all expenses
          authorized by the Uniform Commercial Code and all reasonable attorney
          fees and legal expenses incurred by Bank; the balance of the proceeds
          of the sale or other disposition shall be applied in the payment of
          the Indebtedness, first to interest, then to principal, then to
          remaining Indebtedness and the surplus, if any, shall be paid over to
          Debtor or to such other person(s) as may be entitled to it under
          applicable law. Debtor shall remain liable for any deficiency, which
          it shall pay to Bank immediately upon demand.

     4.5  Nothing in this Agreement is intended, nor shall it be construed, to
          preclude Bank from pursuing any other remedy provided by law for the
          collection of the Indebtedness or for the recovery of any other sum to
          which Bank may be entitled for the breach of this Agreement by Debtor.
          Nothing in this Agreement shall reduce or release in any way any
          rights or security interests of Bank contained in any existing
          agreement between Borrower, Debtor, or any Guarantor and Bank.

     4.6  No waiver of default or consent to any act by Debtor shall be
          effective unless in writing and signed by an authorized officer of
          Bank. No waiver of any default or forbearance on the part of Bank in
          enforcing any of its rights under this Agreement shall operate as a
          waiver of any other default or of the same default on a future
          occasion or of any rights.

     4.7  Debtor irrevocably appoints Bank or any agent of Bank (which
          appointment is coupled with an interest) the true and Lawful attorney
          of Debtor (with full power of substitution) in the name, place and
          stead of, and at the expense of, Debtor:

          (a)  to demand, receive, sue for, and give receipts or acquittances
               for any moneys due or to become due on any Collateral and to
               endorse any item representing any payment on or proceeds of the
               Collateral;

          (b)  to execute and file in the name of and on behalf of Debtor all
               financing statements or other filings deemed necessary or
               desirable by Bank to evidence, perfect, or continue the security
               interests granted in this

<PAGE>

              Agreement; and

          (c)  to do and perform any act on behalf of Debtor permitted or
               required under this Agreement.

     4.8  Upon the occurrence of an Event of Default, Debtor also agrees, upon
          request of Bank, to assemble the Collateral and make it available to
          Bank at any place designated by Bank which is reasonably convenient to
          Bank and Debtor.

5.   Miscellaneous.

     5.1  Until Bank is advised in writing by Debtor to the contrary, all
          notices, requests and demands required under this Agreement or by law
          shall be given to, or made upon, Debtor at the first address indicated
          in Section 5.15 below.

     5.2  Debtor will give Bank not less than 90 days prior written notice of
          all contemplated changes in Debtor's name, chief executive office
          location, and/or location of any Collateral, but the giving of this
          notice shall not cure any Event of Default caused by this change.

     5.3  Bank assumes no duty of performance or other responsibility under any
          contracts contained within the Collateral.

     5.4  Bank has the right to sell, assign, transfer, negotiate or grant
          participations or any interest in, any or all of the Indebtedness and
          any related obligations, including without limit this Agreement. In
          connection with the above, but without limiting its ability to make
          other disclosures to the full extent allowable, Bank may disclose all
          documents and information which Bank now or later has relating to
          Debtor, the Indebtedness or this Agreement, however obtained. Debtor
          further agrees that Bank may provide information relating to this
          Agreeemnt or relating to Debtor to the Bank's parent, affiliates,
          subsidiaries, and service providers.

     5.5  In addition to Bank's other rights, any indebtedness owing from Bank
          to Debtor can be set off and applied by Bank on any Indebtedness at
          any time(s) either before or after maturity or demand without notice
          to anyone.

     5.6  Debtor waives any right to require the Bank to: (a) proceed against
          any person or property; (b) give notice of the terms, time and place
          of any public or private sale of personal property security held from
          Borrower or any other person, or otherwise comply with the provisions
          of Section 9-504 of the Uniform Commercial Code; or (c) pursue any
          other remedy in the Bank's power. Debtor waives notice of acceptance
          of this Agreement and presentment, demand, protest, notice of protest,
          dishonor, notice of dishonor, notice of default, notice of intent to
          accelerate or demand payment of any Indebtedness, any and all other
          notices to which the undersigned might otherwise be entitled, and
          diligence in collecting any Indebtedness, and agree(s) that the Bank
          may, once or any number of times, modify the terms of any
          Indebtedness, compromise, extend, increase, accelerate, renew or
          forbear to enforce payment of any or all Indebtedness, or permit
          Borrower to incur additional Indebtedness, all without notice to
          Debtor and without affecting in any manner the unconditional
          obligation of Debtor under this Agreement. Debtor unconditionally and
          irrevocably waives each and every defense and setoff of any nature
          which, under principles of guaranty or otherwise, would operate to
          impair or diminish in any way the obligation of Debtor under this
          Agreement, and acknowledges that such waiver is by this reference
          incorporated into each security agreement, collateral assignment,
          pledge and/or other document from Debtor now or later securing the
          Indebtedness, and acknowledges that as of the date of this Agreement
          no such defense or setoff exists.

     5.7  Debtor waives any and all rights (whether by subrogation, indemnity,
          reimbursement, or otherwise) to recover from Borrower any amounts paid
          or the value of any Collateral given by Debtor pursuant to this
          Agreement.

     5.8  In the event that applicable law shall obligate Bank to give prior
          notice to Debtor of any action to be taken under this Agreement,
          Debtor agrees that a written notice given to Debtor at least five days
          before the date of the act shall be reasonable notice of the act and,
          specifically, reasonable notification of the time and place of any
          public sale or of the time after which any private sale, lease, or
          other dispostion is to be made, unless a shorter notice period is
          reasonable under the circumstances. A notice shall be deemed to be
          given under this Agreement when delivered to Debtor or when placed in
          an envelope addressed to Debtor and deposited, with postage prepaid,
          in a post office or official depository under the exclusive care and
          custody of the United States Postal Service or delivered to an
          overnight courier. The mailing shall be by overnight courier,
          certified, or first class mail.

     5.9  Notwithstanding any prior revocation, termination, surrender, or
          discharge of this Agreement in whole or in part, the effectiveness of
          this Agreement shall automatically continue or be reinstated in the
          event that any payment received or credit given by Bank in respect of
          the Indebtedness is returned, disgorged, or rescinded under any
          applicable law, including, without limitation, bankruptcy or
          insolvency laws, in which case this Agreement, shall be enforceable
          against Debtor as if the returned, disgorged, or rescinded payment or
          credit had not been received or given by Bank, and whether or not Bank
          relied upon this payment or credit or changed its position as a
          consequence of it. In the event of continuation or reinstatement of
          this Agreement, Debtor agrees upon demand by Bank to execute and
          deliver to Bank those documents which Bank determines are appropriate
          to further evidence (in the public records or otherwise) this
          continuation or reinstatement, although the failure of Debtor to do so
          shall not affect in any way the reinstatement or continuatuion.

     5.10 This Agreement and all the rights and remedies of Bank under this
          Agreement shall inure to the benefit of Bank's successors and assigns
          and to any other holder who derives from Bank title to or an interest
          in the Indebtedness or any portion of it, and shall bind Debtor and
          the heirs, legal representatives, successors, and assigns of Debtor.
          Nothing in this Section 5.10 is deemed a consent by Bank to any
          assignment by Debtor.

     5.11 If there is more than one Debtor, all undertakings, warranties and
          covenants made by Debtor and all rights, powers and authorities given
          to or conferred upon Bank are made or given jointly and severally.

     5.12 Except as otherwise provided in this Agreement, all terms in this
          Agreement have the meanings assigned to them in Division 9 (or, absent
          definition in Division 9, in any other Division) of the Uniform
          commercial Code, as of the date of this Agreement. "Uniform Commercial
          Code" means the California Uniform Commercial Code, as amended.

     5.13 No single or partial exercise, or delay in the exercise, of any right
          or power under this Agreement, shall preclude other or further
          exercise of the rights and powers under this Agreement. The
          unenforceability of any provision of this Agreement shall not affect
          the enforceability of the remainder of this Agreement. This Agreement
          constitutes the entire agreement of Debtor and Bank with respect to
          the subject matter of this Agreement. No amendment or modification of
          this Agreement shall be effective unless the same shall be in writing
          and signed by Debtor and an authorized officer of Bank. This Agreement
          shall be governed by and construed in accordance with the internal
          laws of the State of California, without regard to conflict of laws
          principles.

     5.14 To the extent that any of the Indebtedness is payable upon demand,
          nothing contained in this Agreement shall modify the terms and
          conditions of that Indebtedness nor shall anything contained in this
          Agreement prevent Bank from making demand, without notice and with or
          without reason, for immediate payment of any or all of that
          Indebtedness at any time(s), whether or not an Event of Default has
          occurred.

     5.15 Debtor's chief executive office is located and shall be maintained
          1060 East Arques Ave
          ------------------------------------
               STREET ADDRESS

           Sunnyvale            CA                   94085
     -------------------------------------------------------------------------.
           CITY                 STATE                ZIP CODE         COUNTY

     If Collateral is located at other than the chief executive office, such
Collateral is located and shall be maintained

     at-----------------------------------------------------------------------.
         STREET ADDRESS
     -------------------------------------------------------------------------.
     CITY               STATE               ZIP CODE           COUNTY

<PAGE>

          Collateral shall be maintained only at the locations identified in
this Section 5.15.

     5.16 A carbon, photographic or other reproduction of this Agreement shall
          be sufficient as a financing statement under the Uniform Commerical
          Code and may be filed by Bank in any filing office.

     5.17 This Agreement shall be terminated only by the filing of a termination
          statement in accordance with the applicable provisions of the Uniform
          Commerical Code, but the obligations contained in Section 2.14 of this
          Agreement shall survive termination.

6.   DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
     CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
     (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
     KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
     TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
     ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE
     INDEBTEDNESS.

7.   Special Provisions Applicable to this Agreement. (*None, if left blank)

                            DEBTOR:  Silicon Image, Inc.
                                     ------------------------------------
                                     DEBTOR NAME TYPED/PRINTED

                            By:  /s/ Daniel K. Atler
                                 ------------------------------------
                                 SIGNATURE OF Daniel K. Atler

                            Its: CFO
                                 ------------------------------------
                                 TITLE (If applicable)

                            By:  /s/ David D. Lee
                                 ------------------------------------
                                 SIGNATURE OF David D. Lee

                            Its: CEO
                                 ------------------------------------
                                 TITLE (If applicable)

                            By:
                                 ------------------------------------
                                 SIGNATURE OF

                            Its:
                                 ------------------------------------
                                 TITLE (If applicable)

Borrower(s):
Silicon Image, Inc.

<PAGE>

[COMERICA LOGO]

         BORROWER'S AUTHORIZATION

-------------------------------------------------------------------------------
                                                         Date: October 18, 2000
                                                               ----------------

I (we) hereby authorize and direct Comerica Bank California ("Bank") to pay

to                                             $
  -------------------------------------------   -------------------------------

to                                             $
  -------------------------------------------   -------------------------------

to                                             $
  -------------------------------------------   -------------------------------

to                                             $
  -------------------------------------------   -------------------------------

of the proceeds of my (our) loan from the Bank evidenced by a note in the
original principal amount of:

$        1,290,000.00                 , dated   October 18, 2000.
 -------------------------------------          ------------------------------

     Borrower(s):

     Silicon Image, Inc.

By:                                   Its:
   -----------------------------------------------------------------------------
    SIGNATURE OF                         TITLE

By:                                   Its:
   ----------------------------------------------------------------------------
    SIGNATURE OF                         TITLE

By:                                   Its:
   ----------------------------------------------------------------------------
    SIGNATURE OF                         TITLE

By:                                   Its:
   ----------------------------------------------------------------------------
    SIGNATURE OF                         TITLE

<PAGE>

                                    STATEMENT

                                                        DATE: October 18, 2000
                                                              -----------------

   Silicon Image, Inc.                               Comerica Bank-California
   10151 Bubb Road                                   P.0. Box 49032
                                                     San Jose, CA 95161-9032
   Cupertino, CA 95014

-------------------------------------------------------------------------------

RE: Fee on $ 1,290,000.00  Note, dated October 18, 2000, and maturing October
18, 2003 Officer 48709
--------------------------------------------------------------------------------

  Documentation Fee                                    $1,000.00

                  TOTAL DUE:                           $1,000,000

     [  ]    CUSTOMER CHECK ATTACHED
     [  ]    CHARGE DDA NO.

     ACKNOWLEDGED BY:
                     ----------------------------------<PAGE>
                                                                   Exhibit 10.27

================================================================================

                                ESCROW AGREEMENT

                                      among

                      VIRGINIA ELECTRIC AND POWER COMPANY,
                               ("Virginia Power")

                         LSP ENERGY LIMITED PARTNERSHIP,
                                 ("Partnership")

                                       AND

                            THE CHASE MANHATTAN BANK,
                                ("Escrow Agent")

                           DATED AS OF AUGUST 17, 2000

================================================================================

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I. ESCROW ACCOUNT......................................................2
    Section 1.1   Initial Deposit of Escrow Amount.............................2
    Section 1.2   Investment of Escrow Amount..................................2
    Section 1.3   Release of Escrow Amount.....................................3
    Section 1.4   Payment of Amounts in Reimbursement of Improper Draws........3
    Section 1.5   Interest on LOC Loans........................................3

ARTICLE II. ESCROW AGENT.......................................................4
    Section 2.1   Duties.......................................................4
    Section 2.2   Duties Uncertain.............................................4
    Section 2.3   Liability....................................................5
    Section 2.4   Legal Counsel................................................5
    Section 2.5   Dispute......................................................5
    Section 2.6   Indemnification..............................................5
    Section 2.7   Survival.....................................................6
    Section 2.8   Resignation..................................................6
    Section 2.9   Expenses.....................................................6

ARTICLE III. MISCELLANEOUS.....................................................6
    Section 3.1   Notices......................................................6
    Section 3.2   Termination..................................................8
    Section 3.3   Governing Law................................................8
    Section 3.4   Consent to Jurisdiction......................................8
    Section 3.5   Waiver of Jury Trial.........................................8
    Section 3.6   Reliance.....................................................9
    Section 3.7   Entire Agreement; Waivers....................................9
    Section 3.8   Amendment or Modification, etc...............................9
    Section 3.9   Headings, etc................................................9
    Section 3.10  Severability.................................................9
    Section 3.11  Counterparts................................................10
    Section 3.12  Successors and Assigns......................................10

<PAGE>

                                ESCROW AGREEMENT

      THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as of
August 17, 2000, by and among Virginia Electric and Power Company ("Virginia
Power"), a Virginia public service corporation, LSP Energy Limited Partnership,
a Delaware limited partnership (the "Partnership"), and Chase Manhattan Bank, a
New York State chartered bank, in its capacity as escrow agent (the "Escrow
Agent").

                                    RECITALS

      A. Virginia Power and the Partnership have entered into that certain Power
Purchase Agreement dated May 18, 1998 (as the same has been amended, modified
and supplemented from time to time, the "Power Purchase Agreement").

      B. As required by the Power Purchase Agreement, the Partnership caused
Credit Suisse First Boston (in such capacity, the "LOC Issuer") to issue two
letters of credit (collectively, the "Letters of Credit") to and for the benefit
of Virginia Power in an aggregate stated amount of $11,320,000. The Letters of
Credit bear Reference Numbers 75-07001497 and 75-06001015 and, in general, were
intended to secure, among other things, the Partnership's obligation to
reimburse Virginia Power for Incremental Replacement Power Costs (as defined in
the Power Purchase Agreement) in the event of the Partnership's failure to
achieve the Commercial Operation Date (as defined in the Power Purchase
Agreement) by a specified date (which date was to be subject to adjustment under
certain circumstances).

      C. On July 21, 2000, Virginia Power, believing itself to be entitled to do
so under the Power Purchase Agreement, drew $4,649,743.47 under each Letter of
Credit for an aggregate amount of $9,299,486.94. The Partnership's reimbursement
obligation with respect to such Letters of Credit converted into a five year
amortizing loan ("LOC Loans") provided by the LOC Issuer.

      D. The Partnership believes that the method and amount of such drawings on
the Letters of Credit violated the terms and conditions of the Power Purchase
Agreement. Virginia Power believes that the method and amount of such drawings
on the Letter of Credit complied with the terms and conditions of the Power
Purchase Agreement.

      E. In order to resolve their dispute concerning the method and amount of
such drawings pending resolution of such dispute, Virginia Power and the
Partnership have agreed to enter into this Escrow Agreement whereunder, among
other things, Virginia Power will deliver to the Escrow Agent cash in the amount
of $9,299,486.94 (as the same may be increased or decreased from time to time
due to investment earnings or losses as provided herein, the "Escrow Amount") to
be maintained and disbursed by the Escrow Agent as further provided herein.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained and for other good valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:

<PAGE>

                                   ARTICLE I.
                                 ESCROW ACCOUNT

            Section 1.1 Initial Deposit of Escrow Amount.

      On the date hereof, concurrently with the execution and delivery of this
Agreement, Virginia Power shall deliver, in cash, to the Escrow Agent, an amount
equal to the Escrow Amount, for deposit by the Escrow Agent in an account (the
"Escrow Account") to be maintained by and in the name of the Escrow Agent,
having Account No. 910-2-758829, ABA Routing No. 021000021 and being referred to
as the "Virginia Power and LSP Energy Escrow Account". The Escrow Agent shall
maintain the Escrow Account, and all amounts on deposit therein or credited
thereto, only as provided herein and shall have no other rights or obligations
with respect to the Escrow Account.

            Section 1.2 Investment of Escrow Amount.

            (a) During the term of this Agreement, the Escrow Agent shall invest
the Escrow Amount, at the direction of the Partnership, in (i) securities issued
or directly and fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof); (ii) time
deposits and certificates of deposit of any domestic commercial bank of
recognized standing having capital and surplus in excess of $100,000,000; (iii)
commercial paper issued by the parent corporation of any domestic commercial
bank of recognized standing having capital and surplus in excess of $100,000,000
and commercial paper of any domestic corporation rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's;
(iv) Chase Trust Deposit Account, which account the Escrow Amount is to be
invested unless otherwise instructed in writing by the Partnership, and (iv)
money market funds having a rating in the highest investment category granted
thereby by a rating agency at the time of acquisition, including any fund for
which the Escrow Agent or an affiliate of the Escrow Agent serves as an
investment advisor, administrator, shareholder, servicing agent, custodian or
subcustodian, notwithstanding that (a) Escrow Agent or an affiliate of the
Escrow Agent charges and collects fees and expenses from such funds for services
rendered (provided that such charges, fees and expenses are on terms consistent
with terms negotiated at arm's length) and (b) the Escrow Agent charges and
collects fees and expenses for services rendered pursuant to this Escrow
Agreement, unless otherwise jointly instructed in writing by the Partnership and
Virginia Power. Each of the securities described in clauses (i), (ii) and (iii)
above shall have maturities not to exceed thirty (30) days.

            (b) Interest and other earnings derived from the investments made in
accordance with Section 1.2.(a) hereof shall be added to the Escrow Amount and
shall become a part thereof subject to the terms hereof. The allocation of any
such interest and earnings to the Partnership and/or Virginia Power pursuant to
a Judgement or the Instructions, as applicable, shall be in lieu of any default
interest owed to the other party as a result of the dispute described herein,
whether at law or pursuant to the Power Purchase Agreement, for the period from
the date of the draw on the Letters of Credit and until the date of the
termination of the Agreement.

                                       2
<PAGE>

            (c) At least on a monthly basis, the Escrow Agent shall provide the
Partnership and Virginia Power with a statement regarding the following: (i) the
Escrow Amount at such time, and (ii) all interest accrued and any other earnings
added to the Escrow Amount since the previous statement issued pursuant to this
Section 1.2(c). In addition, the Escrow Agent shall provide to the Partnership
and Virginia Power with any other customary information as they may reasonably
request.

            Section 1.3 Release of Escrow Amount.

      The Escrow Agent shall hold the Escrow Amount in escrow pursuant to this
Agreement until such time as any one of the following shall have occurred:

            (a) the Escrow Agent shall have received a copy of a judgement
issued by a court of competent jurisdiction (the "Judgment") stating (i) to whom
the Escrow Amount is to be delivered in whole or in part, (ii) the manner and
all pertinent instructions pursuant to which the Escrow Amount is to be
delivered and (iii) when the Escrow Amount is to be delivered. Upon receipt of
such Judgment, the Escrow Agent shall deliver the Escrow Amount as directed in
the Judgment; or

            (b) the Escrow Agent shall have received written instructions
executed by both the Partnership and Virginia Power (the "Instructions") stating
(i) to whom the Escrow Amount is to be delivered in whole or in part, (ii) the
manner and all pertinent instructions pursuant to which the Escrow Amount is to
be delivered and (iii) when the Escrow Amount is to be delivered. Upon receipt
of a writing that the Escrow Agent reasonably believes to constitute such
Instructions, the Escrow Agent shall deliver the Escrow Amount as directed by
the Instructions.

            Section 1.4 Payment of Amounts in Reimbursement of Improper Draws.

      Notwithstanding anything herein to the contrary, in the event any Judgment
or Instruction directs that all or part of the Escrow Amount is to be disbursed
to or for the benefit of the Partnership, the Escrow Agent shall disburse such
amount directly to the LOC Issuer in reimbursement of amounts drawn on the
Letters of Credit, unless either (i) to disburse the funds as such would violate
the terms of any such Judgment in the reasonable judgment of the Escrow Agent or
(ii) the Escrow Agent shall have received written notice from the Partnership
certifying that no amounts remain unreimbursed by the Partnership to the LOC
Issuer in respect of the Letters of Credit.

            Section 1.5 Interest on LOC Loans.

            (a) Subject to Section 1.5(b) below, on or before the fifth (5th)
day of each Month beginning in September 2000 and until termination of this
Agreement in accordance with its terms, the Partnership shall submit an invoice
to Virginia Power which sets forth one-half of the Partnership's interest
obligation with respect to the LOC Loans for such Month (the

                                       3
<PAGE>

"Monthly Interest Amount"). On or before the twentieth (20th) Day of such Month,
Virginia Power shall remit to the Partnership's Revenue Account # 220776 the
Monthly Interest Amount.

            (b) On or before August 31, 2000, Virginia Power shall remit to the
Partnership's Revenue Account # 220776 $88,059.28, which amount represents the
Partnership's interest obligation with respect to the LOC Loans from the date of
the Virginia Power draw until and including August 31, 2000.

            (c) Upon the termination of this Agreement, Virginia Power and the
Partnership shall allocate between themselves responsibility for the
Partnership's interest obligation with respect to the LOC Loans for the period
September 2000 through termination of this Agreement (the "LOC Interest Period")
in the same proportion as the Escrow Amount is distributed to the parties
pursuant to Section 1.3 of this Agreement (the "LOC Interest Allocation").
Virginia Power and the Partnership shall then reconcile the LOC Interest
Allocation with the interest payments actually made by the parties on account of
the LOC Loans during the LOC Interest Period and determine the amount, if any,
owed by one party to the other in order to make the interest actually paid by
each of Virginia Power and the Partnership equivalent to the amount owed by such
party under the LOC Interest Allocation. The amount so owed shall then be paid
by the party owing said amount to the other party. The LOC Interest Allocation,
the reconciliation and payment described in this subsection shall be completed
as soon as practicable following the termination of this Agreement and in all
events no later than thirty (30) calendar days following the termination of this
Agreement. All payments owed to the Partnership pursuant to this subsection
shall be made to the Partnership's Revenue Account # 220776.

            (d) The Escrow Agent shall have no duties, responsibilities or
obligations of any nature whatsoever with respect to the provisions of this
Section 1.5.

                                  ARTICLE II.
                                  ESCROW AGENT

            Section 2.1 Duties.

      The Escrow Agent shall have no duties or responsibilities, including,
without limitation, a duty to review or interpret the Power Purchase Agreement,
except those expressly set forth herein. Except for this Agreement, the Escrow
Agent, in its capacity as such, is not a party to, or bound by, any agreements
that may be required under, evidenced by, or arise out of the Power Purchase
Agreement.

            Section 2.2 Duties Uncertain.

      If the Escrow Agent shall be uncertain as to its duties or rights
hereunder or shall receive instructions from any of the undersigned with respect
to the Escrow Amount, which, in its opinion, are in conflict with any of the
provisions of this Agreement, it shall be entitled to refrain from taking any
action until it shall be directed otherwise in writing by the Partnership or
Virginia Power or by order of a court of competent jurisdiction. The Escrow
Agent shall be

                                       4
<PAGE>

protected in acting upon any notice, request, waiver, consent, receipt or other
document reasonably believed by the Escrow Agent to be signed by the proper
party or parties.

            Section 2.3 Liability.

      The Escrow Agent shall not be liable for any error or judgment or for any
act done or step taken or omitted by it in good faith or for any mistake of fact
or law, or for anything that it may do or refrain from doing in connection
herewith, except for its own gross negligence or willful misconduct, and the
Escrow Agent shall have no duties to anyone except the Partnership and Virginia
Power and their respective successors and permitted assigns.

            Section 2.4 Legal Counsel.

      The Escrow Agent may consult legal counsel in the event of any dispute or
question as to the construction of this Agreement, or the Escrow Agent's duties
hereunder, and the Escrow Agent shall incur no liability and shall be fully
protected with respect to any action taken or omitted in good faith in
accordance with the opinion and instructions of counsel.

            Section 2.5 Dispute.

      In the event of any disagreement between the undersigned or any of them,
and/or any other person, resulting in adverse claims and demands being made in
connection with or for the Escrow Amount, the Escrow Agent shall be entitled at
its option to refuse to comply with any such claim or demand, so long as such
disagreement shall continue, and in so doing the Escrow Agent shall not be or
become liable for damages or interest to the undersigned or any of them or to
any person named herein for its failure or refusal to comply with such
conflicting or adverse demands. The Escrow Agent shall be entitled to continue
so to refrain and refuse so to act until all differences shall have been
resolved by agreement and the Escrow Agent shall have been notified thereof in
writing signed by the Partnership and Virginia Power. In the event of such
disagreement which continues for 90 days or more, the Escrow Agent in its
discretion may, but shall be under no obligation to, file a suit in interpleader
for the purpose of having the respective rights of the claimants adjudicated and
may deposit with the court all documents and property held hereunder. Each of
the Partnership and Virginia Power agree to each pay 50% of all reasonable
out-of-pocket costs and expenses incurred by the Escrow Agent in such action,
including reasonable attorney's fees and disbursements.

            Section 2.6 Indemnification.

      The Escrow Agent is hereby indemnified by the Partnership and Virginia
Power from all losses, costs and expenses of any nature incurred by the Escrow
Agent arising out of or in connection with this Agreement or with the
administration of its duties hereunder, unless such losses, costs or expenses
shall have been caused by the Escrow Agent's willful misconduct or gross
negligence. Such indemnification shall survive termination of this Agreement
until extinguished by any applicable statute of limitations. In the event that
either the Partnership or Virginia Power fully indemnifies the Escrow Agent,
such indemnifying party shall have the right to recover from the
non-indemnifying party 50% of the full amount paid to the Escrow Agent as
indemnification. Anything in this agreement to the contrary notwithstanding, in
no event shall

                                       5
<PAGE>

the Escrow Agent be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to loss profits), even if the
Escrow Agent has been advised of the likelihood of such loss or damage and
regardless of the form of the action.

            Section 2.7 Survival.

      The Escrow Agent, in its capacity as Escrow Agent, does not have any
interest in the Escrow Amount deposited hereunder but is serving as escrow
holder only and having only possession thereof. This paragraph shall survive
notwithstanding any termination of this Agreement or the resignation of the
Escrow Agent.

            Section 2.8 Resignation.

      The Escrow Agent (and any successor Escrow Agent) may at any time resign
as such by giving written notice of its resignation to the parties hereto at
least 30 days prior to the date specified for such resignation to take effect.
Upon the effective date of such resignation, the Escrow Amount shall be
delivered by it to such successor Escrow Agent or as otherwise shall be
instructed in writing by the Partnership and Virginia Power, whereupon the
Escrow Agent shall be discharged of and from any and all further obligations
arising in connection with this Agreement. If at that time the Escrow Agent has
not received such instruction, the Escrow Agent's sole responsibility after that
time shall be to safekeep the Escrow Amount until receipt of a designation of
successor Escrow Agent or joint written instruction as to disposition of the
Escrow Amount by the Partnership and Virginia Power or a final order of a court
of competent jurisdiction mandating disposition of the Escrow Amount.

            Section 2.9 Expenses.

      The Escrow Agent hereby accepts its appointment and agrees to act as
escrow agent under the terms and conditions of this Agreement and acknowledges
receipt of the Escrow Amount. Each of the Partnership and Virginia Power further
agree to jointly and severally reimburse the Escrow Agent for 50% of all
reasonable out-of-pocket expenses, disbursements and advances incurred or made
by the Escrow Agent in the performance of its duties hereunder (including
reasonable fees, and out-of-pocket expenses and disbursements, of its counsel).
The Escrow's Agent's fees are set forth on Schedule I attached hereto.

                                  ARTICLE III.
                                  MISCELLANEOUS

            Section 3.1 Notices.

      Any notices or other communications required or permitted hereunder shall
be effective if in writing and delivered personally or sent by overnight
courier, addressed as follows:

            If to the Partnership, at:

            LSP ENERGY LIMITED PARTNERSHIP
            c/o LS Power Management, LLC

                                       6
<PAGE>

            Two Tower Center, 20th Floor
            East Brunswick, NJ 08816
            Attention: Treasurer
            Telephone: (732) 249-6750
            Facsimile: (732) 249-7290

            And

            LSP ENERGY LIMITED PARTNERSHIP

            c/o LS Power Management, LLC
            Two Tower Center, 20th Floor
            East Brunswick, NJ 08816
            Attention: General Counsel
            Telephone: (732) 249-6750
            Facsimile: (732) 249-7290

            If to Virginia Power, at:

            VIRGINIA ELECTRIC AND POWER COMPANY
            5000 Dominion Boulevard
            Glen Allen, VA 23060
            Attention: Richard Thatcher
            Telephone: (804) 273-4410
            Facsimile: (804) 273-4501

            If to the Escrow Agent, at:

            The Chase Manhattan Bank
            450 West 33rd St
            New York, NY 10001
            Attention: Audrey Mohan
            Telecopy: (212)-946-3751
            Facsimile: (212)-946-8156

      Unless otherwise specified herein, such notices or other communications
shall be deemed effective (a) on the date delivered, if delivered personally,
(b) one Business Day after being delivered, if delivered by telecopier with
confirmation of good transmission, (c) one Business Day after being sent by
overnight courier, if sent by overnight courier, (d) two Business Days after
being sent by Federal Express or United Parcel Service, if sent by Federal
Express or United Parcel Service, or (e) three Business Days after being sent,
if sent by registered or certified mail. Each of the parties hereto shall be
entitled to specify a different address by giving notice as aforesaid to each of
the other parties hereto.

                                       7
<PAGE>

            Section 3.2 Termination.

      This Agreement shall automatically terminate upon the final distribution
of the Escrow Amount in accordance with the terms hereof, provided that the
provisions of Sections 2.6, 2.7 and 2.9 shall survive the termination of this
Agreement.

            Section 3.3 Governing Law.

      This Agreement shall be governed by the laws of the State of New York of
the United States of America and shall for all purposes be governed by and
construed in accordance with the laws of such state without regard to the
conflict of law rules thereof other than Section 5-1401 of the New York General
Obligations Law.

            Section 3.4 Consent to Jurisdiction.

      Each of the parties agrees that all actions, suits or proceedings arising
out of or based upon this Agreement or the subject matter hereof may be brought
and maintained in the federal district court in the Southern District of New
York. Each of the parties hereby by execution hereof (i) hereby irrevocably
submits to the non-exclusive jurisdiction of such court in New York, New York,
for the purpose of any action, suit or proceeding arising out of or based upon
this Agreement or the subject matter hereof and (ii) hereby waives to the extent
not prohibited by applicable law, and agrees not to assert, by way of motion, as
a defense or otherwise, in any such action, suit or proceeding, any claim that
it is not subject personally to the jurisdiction of the above-named court, that
it is immune from extraterritorial injunctive relief or other injunctive relief,
that its property is exempt or immune from attachment or execution, that any
such action, suit or proceeding may not be brought or maintained in the
above-named court should be dismissed on the grounds of forum non conveniens,
should be transferred to any court other than the above-named court, should be
stayed by virtue of the pendency of any other action, suit or proceeding in any
court other than the above-named court, or that this Agreement or the subject
matter hereof may not be enforced in or by the above-named court. Each of the
parties hereto hereby consents to service of process in any such suit, action or
proceeding in any manner permitted by the laws of the State of New York, agrees
that service of process by registered or certified mail, return receipt
requested, at the address specified in or pursuant to Section 3.1 hereof is
reasonably calculated to give actual notice and waives and agrees not to assert
by way of motion, as a defense or otherwise, in any such action, suit or
proceeding any claim that service of process made in accordance with Section 3.1
hereof does not constitute good and sufficient service of process. The
provisions of this Section 3.4 shall not restrict the ability of any party to
enforce in any court any judgment obtained in the federal district court in the
Southern District of New York.

            Section 3.5 Waiver of Jury Trial.

      To the extent not prohibited by applicable law which cannot be waived,
each of the parties hereto hereby waives, and covenants that it will not assert
(whether as plaintiff, defendant, or otherwise), any right to trial by jury in
any forum in any respect of any issue, claim, demand, cause of action, action,
suit or proceeding arising out of or based upon this Agreement or the subject
matter hereof, in each case whether now existing or hereafter arising and
whether in

                                       8
<PAGE>

contract or tort or otherwise. Any of the parties hereto may file an original
counterpart or a copy of this Section 3.5 with any court as written evidence of
the consent of each of the parties hereto to the waiver of his or its right to
trial by jury.

            Section 3.6 Reliance.

      Each of the parties hereto acknowledges that it has been informed by each
other party that the provisions of this Section constitute a material inducement
upon which such party is relying and will rely in entering into this Agreement
and the transactions contemplated hereby.

            Section 3.7 Entire Agreement; Waivers.

      This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties with respect to such subject matter. No
waiver of any provision of this Agreement (a) shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not similar), (b)
shall constitute a continuing waiver unless otherwise expressly provided therein
or (c) shall be effective unless in writing and executed by each party hereto.

            Section 3.8 Amendment or Modification, etc.

      The parties hereto may not amend or modify this Agreement except in such
manner as may be agreed upon by a written instrument executed by all of the
parties hereto. Any written amendment, modification or waiver executed by all of
the parties hereto shall be binding upon all such parties and their respective
successors and assigns.

            Section 3.9 Headings, etc.

      Section and subsection headings are not to be considered part of this
Agreement, are included solely for convenience, are not intended to be full or
accurate descriptions of the content thereof and shall not affect the
construction hereof. This Agreement shall be deemed to express the mutual intent
of the parties, and no rule of strict construction shall be applied against any
party.

            Section 3.10 Severability.

      In the event that any provision hereof would, under applicable law, be
invalid or unenforceable in any respect, such provision shall (to the extent
permitted by applicable law) be construed by modifying or limiting it so as to
be valid and enforceable to the maximum extent compatible with, and possible
under, applicable law. The provisions hereof are severable, and in the event any
provision hereof should be held invalid or unenforceable in any respect, it
shall not invalidate, render unenforceable or otherwise affect any other
provision hereof.

                                       9
<PAGE>

            Section 3.11 Counterparts.

      This Agreement and any amendments, waivers, consents, or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto. Delivery of an
executed counterpart of a signature page to this Agreement or to any amendments,
waivers, consents or supplements hereof by telecopier shall be as effective as
delivery of a manually executed counterpart thereof.

            Section 3.12 Successors and Assigns.

      All of the terms and provisions of this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
permitted transferees, successors and assigns (each of which shall be deemed to
be a party hereto for all purposes hereof). The Partnership and Virginia Power
may not assign its obligations hereunder without the prior written consent of
the non-assigning party. Except as expressly provided herein, this Agreement
shall not confer any right or remedy upon any person other than the parties and
their respective transferees, successors and assigns; provided, however, that
the rights and obligations of the Partnership under this Agreement shall be
subject to the rights of The Bank Of New York in its capacity as collateral
agent under the Second Amended and Restated Security Agreement dated as of May
21, 1999 between the Partnership and The Bank of New York.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       10
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.

                                        VIRGINIA ELECTRIC AND POWER COMPANY,
                                        as Virginia Power

                                        By: /s/ R.T. THATCHER
                                           ------------------------------------
                                        Name: R.T. Thatcher
                                        Title: Vice President

                                        LSP ENERGY LIMITED PARTNERSHIP,
                                        as the Partnership

                                        By: LSP Energy, Inc., as general partner

                                        By: /s/ MARK BRENNAN
                                           ------------------------------------
                                        Name: Mark Brennan
                                        Title: Treasurer

                                        THE CHASE MANHATTAN BANK,
                                        as the Escrow Agent

                                        By: /s/ SAVERIO A. LUNETTA
                                           ------------------------------------
                                        Name: Saverio A. Lunetta
                                        Title: Vice President

                                       11
<PAGE>

                                   SCHEDULE 1

Option 1:

15 basis points of the highest value of collateral held on deposit per annum or
any part thereof without proration for partial years, subject to a minimum of
$7,500.

$75 per investment (excludes Money Market, Trust Deposit Account or Chase Vista
Money Market Fund investments)

Option 2:

Annual Fee: $7,500

Escrow proceeds invested in the Chase Trust Deposit account (30 day LIBOR less
50 bps).

Above options include initial legal review and set-up of appropriate accounts.

                                       12

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