Document:

Prepared by MerrillDirect

	 	EXHIBIT 10.2
	 	 
	WELLS FARGO BANK	REVOLVING
  LINE OF CREDIT NOTE
	 	 
	$5,000,000.00	San Jose, California
	 	March
  23, 2001

   FOR
VALUE RECEIVED, the undersigned Fiberstars, Inc.  (“Borrower”) promises to pay to the order of WELLS FARGO BANK,
NATIONAL ASSOCIATION (“Bank”) at its office at Santa Clara Valley RCBO, 121 Park Center
Plaza 3rd Flr, San Jose, CA 95113, or at such other place
as the holder hereof may designate, in lawful money of the United States of
America and in immediately available funds, the principal sum of $5,000,000.00,
or such much thereof as may be advanced and be outstanding, with interest
thereon, to be computed on each advance from the date of its disbursement as
set forth herein.

DEFINITIONS:

   As used
herein, the following terms shall have the meanings set forth after each, and
any other term defined in this Note shall have the meaning set forth at the
place defined:

            (a)          “Business
Day” means any day except a Saturday, Sunday, or any other day on which
commercial banks in California are authorized or required by law to close.

            (b)          “Fixed Rate Term” means a period
commencing on a Business Day and continuing for 1, 2 or 3 months, as
designated by Borrower, during which all or a portion of the outstanding
principal balance of this Note bears interest determined in relation to LIBOR;
provided however, that no Fixed Rate Term may be selected for a principal
amount less than $100,000.00; and provided further, that no Fixed Rate Term
shall extend beyond the scheduled maturity date hereof.  If any Fixed Rate Term would end on a day
which is not a Business Day, then such Fixed Rated Term shall be extended to
the next succeeding Business Day.

            (c)          “LIBOR”
means the rate per annum (rounded upward, if necessary, to the nearest whole
1/8 of 1%) determined by dividing Base LIBOR by a percentage equal to 100% less
any LIBOR Reserve Percentage.

                           (i)         
“Base LIBOR” means the rate per annum for United
States dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate,
with the understanding that such rate is quoted by Bank for the purpose of
calculating effective rates of interest for loans making reference thereto, on
the fist day of a Fixed Rate Term for delivery of funds on said date for a
period of time approximately equal to the number of days in such Fixed Rate
Term and in an amount approximately equal to the principal amount to  which such Fixed Rate Term applies.  Borrower understands and agrees that Bank
may base its quotation of the Inter-Bank Marked Offered Rate upon such offers
or other market indicators of the Inter-Bank Market as Bank in its discretion
deems appropriate including, but not limited to, the rate offered for U.S.
dollar deposits on the London Inter-Bank Market.

                           (ii)         
“LIBOR Reserve Percentage” means the reserve
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for “Eurocurrency Liabilities” (as defined in Regulation D
of the Federal Reserve Board, as amended), adjusted by Bank for expected
changes in such reserve percentage during the applicable Fixed Rated Term.

             (d)        “Prime
Rate” means at any time the rate of interest most recently announced within
Bank at its principal office as its Prime Rate, with the understanding that the
Prime Rate is one of Bank’s base rates and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Bank may designate.

INTEREST:

             (a)         Interest.  The outstanding principal balance of this
Note shall bear interest (computed on the basis of a 360-day year, actual days
elapsed) either (I) at a fluctuating rate per annum equal to the Prime Rate in
effect from time to time, or (ii) at a fixed rate per annum determined by Bank
to be 1.75000%
above LIBOR in effect on the first day of the applicable Fixed Rate Term.  When interest is determined in relation to
the Prime Rate, each change in the rate of interest hereunder shall become
effective on the date each Prime Rate change is announced within Bank.  With respect to each LIBOR selection
hereunder, Bank is hereby authorized to note the date, principal amount,
interest rate and Fixed Rate Term applicable thereto and any payments make
thereon on Bank’s books and records (either manually or by electronic entry)
and/or on any schedule attached to this Note, which notations shall be prima
facie evidence of the accuracy of the information noted.

             (b)        Selection of Interest Rate Options.   At any time any portion of this Note bears
interest determined in relation to LIBOR, it may be continued by Borrower at
the end of the Fixed Rate Term applicable thereto so that all or a portion
thereof bears interest determined in relation to the Prime Rate or to LIBOR for
a new Fixed Rate Term designated by Borrower. 
At any time any portion of the Note bears interest determined in
relation to the Prime Rate, Borrower may convert all or a portion thereof so
that it bears interest determined in relation to LIBOR for a Fixed Rate Term
designated by Borrower.  At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion for the outstanding principal balance hereof, and at the end
of each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term.  Any such notice may be given
by telephone (or such other electronic method as Bank may permit) so long as,
with respect to each LIBOR selection, (A) if requested by Bank, Borrower
provides to Bank written confirmation thereof not later than three (3) Business
Days after such notice is give, and (B) such notice is given to Bank prior to
10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during
any Business Day if Bank, at it’s sole option but without obligation to do so,
accepts Borrower’s notice and quotes a fixed rate to Borrower.  If Borrower does not immediately accept a
fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent
LIBOR request form Borrower shall be subject to a redetermination by Bank of
the applicable fixed rate.  If no
specific designation of interest is made at the time any advance is requested
hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to
have made a Prime Rate interest selection for such advance or the principal
amount to which Fixed Rate Term applied.

             (c)         Taxes and Regulatory Costs.   Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts due or to become due hereunder, any
and all (i) withholdings, interest equalization taxes, stamp taxes or other
taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner or LIBOR, and (ii) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting form compliance by Bank with any request or directive
(whether or not having the fore of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they
are not included in the calculation of LIBOR. 
In determining which of the foregoing are attributable to any LIBOR
option available to Borrower hereunder, any reasonable allocation make by Bank
among its operations shall be conclusive and binding upon Borrower.

             (d)        Payment
of Interest.  Interest accrued on this
Note shall be payable on the 28th
day of each month, commencing March 28, 2001.

             (e)         Default Interest.  From and after the maturity date of this
Note, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance of this
Note shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 360-year, actual days elapsed) equal to 4% above
the rate of interest from time to time applicable to this Note.

             (f)         Commitment Fee.  Prior to the initial extension of credit
under this Note, Borrower shall pay to Bank a non-refundable commitment fee of $2,500.00.

             (g)        Collection of Payments.  Borrower authorizes Bank to collect all
interest and fees due hereunder by charging Borrower’s deposit account number 4496-813031
with Bank, or any other deposit account maintained by any Borrower with Bank,
for the full amount thereof.  Should
there be insufficient funds in any such deposit account to pay all such sums
when due, the full amount of such deficiency shall be immediately due and
payable by Borrower.

SIGHT
COMMERICAL AND STANDBY LETTER OF CREDIT SUBFEATURE:

             (a)         Letter of Credit Subfeature.  As a subfeature under this Note, Bank agrees
from time to time during the term hereof to issue standby letters of credit for
the account of Borrower to finance guarantee lease payments for their German facility and/or
sight commercial letters of credit for the account of Borrower to finance
Borrower’s inventory purchases (each, a “Letter of Credit” and collectively,
“Letters of Credit”); provided however, that the form and substance of each
Letter of Credit shall be subject to approval by Bank, in it’s sole discretion;
and provided further, that the aggregate undrawn amount of all outstanding
Letters of Credit shall not at any time exceed $400,000.00.  Each standby Letter of Credit shall be
issued for a term not to exceed 365 days, and each commercial Letter of
Credit shall be issued for a term not to exceed 180 days, as designated by
Borrower; provided however, that no standby Letter of Credit shall have an
expiration date subsequent to the maturity date of this Note, and no commercial
Letter of Credit shall have an expiration date more than 90 days beyond the
maturity date of this Note.  The undrawn
amount of all Letters of Credit shall be reserved under this Note and shall not
be available for borrowings hereunder.  Each Letter of Credit shall be subject to the additional terms and
conditions of the Letter of Credit Agreement and related documents, if any,
required by Bank in connection with the issuance thereof.  Each draft paid by Bank under a Letter of
Credit shall be deemed an advance under this Note and shall be repaid by
Borrower in accordance with the terms and conditions of this Note; provided
however, that if advances hereunder are not available, for any reason, at the
time any draft is paid by Bank, then Borrower shall immediately pay to Bank the
full amount of such draft, together with interest thereon form the date such
amount is paid by Bank to the date such amount is full repaid by Borrower, at
the rate of interest applicable to advances hereunder.  In such event Borrower agrees that Bank, in
its sole discretion, may debit any deposit account maintained by Borrower with
Bank for the amount of any such draft.

             (b)        Letter of Credit Fees.  Borrower shall pay to Bank fees upon the
issuance of each letter of Credit, upon the payment or negotiation of each
draft under any letter of Credit and upon the occurrence of any other activity
with respect to any Letter of Credit (including without limitation, the
transfer, amendment or cancellation of any Letter of Credit) determined in
accordance with Bank'’ standard fees and charges then in effect for such
activity.

CLEAN
ACCEPTANCE SUBFEATURE:

             (a)         Acceptance Subfeature.  As a subfeature under this Note, Bank agrees
from time to time during the term hereof to create banker’s acceptances (each,
an “Acceptance” and collectively, “Acceptances”) for the account of Borrower by
accepting drafts drawn on Bank by Borrower for the purpose of financing
Borrower’s importation of goods into the United States; provided however, that
the form and substance of each Acceptance shall be subject to approval by Bank,
in its sole discretion; and provided further, that the aggregate amount of all
outstanding Acceptances shall not at any time exceed $400,000.00.  Each Acceptance shall be in the minimum
amount of $5,000.00.  Each Acceptance shall be subject to the
additional terms and conditions of an Acceptance Agreement in form and
substance satisfactory to Bank.  Each
Acceptance shall be created for a term not to exceed the lesser of 365
days, as designated by Borrower, or such period of time as may be necessary to
comply with the terms of the Acceptance Agreement; provided however, that no
Acceptance shall mature more than 90 days beyond the maturity date of this
Note.  The outstanding amount of all
Acceptances shall be reserved under this Note and shall not be available for
borrowings hereunder.  The amount of
each Acceptance which matures shall be deemed an advance under this Note and
shall be repaid by Borrower in accordance with the terms and conditions of this
Note; provided however, that if advances hereunder are not available, for any
reason, at the time any Acceptance matures, then Borrower shall immediately pay
to Bank the full amount of such matured Acceptance, together with interest
thereon from the date such Acceptance matures to the date such amount is fully
repaid by Borrower, at the rate of interest applicable to advances
hereunder.  In such event Borrower
agrees that Bank, in its sole discretion, may debit any deposit account maintained
by Borrower with Bank for the amount of any Acceptance.  All Acceptances created hereunder shall be
discounted with Bank.

             (b)        Acceptance Fees.  For each Acceptance created hereunder,
Borrower shall pay to Bank on the date such Acceptance is created an acceptance
fee determined in accordance with Bank’s standard fees and charges then in
effect for the creation of Acceptances.

BORROWING
AND REPAYMENT:

             (a)         Use of Proceeds.  Advances under this Note shall be available
solely to finance working capital requirements.

             (b)        Borrowing and Repayment.  Borrower may form time to time during the
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with, or at any time as a
supplement to, this Note; provided however, that the total outstanding
borrowings under this Note shall not at any time exceed the principal amount
stated above; and provided further, that Borrower shall maintain a zero balance
on advances under this Note for a period of at least 30 consecutive days during
each fiscal year.  All payments credited
to principal shall be applied first, to the outstanding principal balance of
this Note which bears interest determined in relation to the Prime Rate, if
any, and second, to the outstanding principal balance of this Note which bears
interest determined in relation to LIBOR, with such payments applied to the
oldest Fixed Rate Term first.  The
unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of any
principal payments made hereon by or for any Borrower, which balance may be
endorsed hereon from time to time by the holder.  The outstanding principal balance of this Note shall be due and
payable in full on August 15, 2001; except with respect to any
draft paid by Bank under a commercial Letter of Credit and any Acceptance which
matures subsequent to said date, the full amount of which shall be due and
payable by Borrower immediately upon payment by Bank or at such maturity as
applicable.

             (c)         Advances.  Advances hereunder, to the total amount of
the principal sum available hereunder, may be made by the holder at the oral or
written request of (i) David N. Ruckert or Roland Dennis or Bob Connors,
any on acting alone, who are authorized to request advances and direct the
disposition of any advances until written notice of the revocation of such
authority is received by the holder at the office designated above, or (ii) any
person, with respect to advances deposited to the credit of any deposit account
of any Borrower, which advances, when so deposited, shall be conclusively
presumed to have been made to or for the benefit of each Borrower regardless of
the fact that persons other than those authorized to request advances may have
authority to draw against such account. 
The holder shall have no obligation to determine whether any person
requesting an advance is or has been authorized by any Borrower.

PREPAYMENT:

             (a)         Prime Rate.  Borrower may prepay principal on any portion
of this Note which bears interest determined in relation to the Prime Rate at
any time, in any amount and without penalty.

             (b)        LIBOR.  Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to LIBOR at any time and in the minimum
amount of $100,000.00;
provided however, that if the outstanding principal balance of such portion of
this Note is less than said amount, the minimum prepayment amount shall be the
entire outstanding principal balance thereof. 
In consideration of Bank providing this prepayment option to Borrower,
or if any such portion of this Note shall become due and payable at any time
prior to the last day of the Fixed Rate Term applicable thereto by acceleration
or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is
the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which Fixed Rate Term matures, calculated as
follows for each such month:

                           (i)    
      Determine the amount of interest which would have
accrued each month on the amount prepaid at the interest rate applicable to
such amount had it remained outstanding until the last day of the Fixed Rate
Term applicable thereto.

                           (ii)    
     Subtract from the amount determined in (i) above
the amount of interest which would have accrued from the same month on the
amount repaid for the remaining term of such Fixed Rate Term at LIBOR in effect
on the date of prepayment for new loans made for such term and in a principal
amount equal to the amount prepaid.

                           (iii)    
    If
the result obtained in (ii) for any month is greater than zero, discount that
difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of
such amount may result in Bank incurring additional costs, expenses and/or
liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses and/or liabilities. 
Each Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment cots, expenses and/or liabilities of Bank.  If Borrower fails to pay any prepayment fee when due, the amount
of such prepayment fee shall thereafter bear interest until paid at a prate per
annum 2.000%
above Prime Rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed). 
Each change in the rate of interest on any such past due prepayment fee
shall become effective on the date each Prime Rate change is announced within
Bank.

COLLATERAL:

   As
security for the payment and performance of all obligations of Borrower under
this Note, Borrower grants to Bank security interests of first priority (except
as agreed otherwise by Bank in writing) in the following property of Borrower,
now owned or at any time hereafter acquired: all accounts receivable, other
rights to payment and general intangibles; all inventory, together with
security interests in all other personal property of Borrower not or at any
time hereafter pledged to Bank as collateral for any other commercial
credit  accommodation granted by Bank to
Borrower.  All of the foregoing shall be
evidenced by and subject to the terms of such security agreements, financing
statements and other documents as Bank shall reasonably require, all in form
and substance satisfactory to Bank. 
Borrower shall reimburse Bank immediately upon demand for all costs and
expenses incurred by Bank in connection with any of the foregoing security,
including without limitation, filing fees and allocated costs of collateral
audits.

EVENTS
OF DEFAULT:

   Any
default in the payment or performance of any obligation under this Note, or any
defined event of default under any loan agreement now or at any time hereafter
in effect between Borrower and Bank (whether executed prior to, concurrently
with or at any time after this Note), shall constitute an “Event of Default”
under this Note.

MISCELLANEOUS:

             (a)         Remedies.  Upon the occurrence of any Even of Default,
the holder of this Note, at the holder’s option, may declare all sums of
principal, interest, fees and charges outstanding hereunder to be immediately
due and payable without presentment, demand, notice of nonperformance, notice
of protest, protest or notice of dishonor, all of which are expressly waived by
each Borrower, and the obligation, if any, of the holder to extend any further
credit hereunder shall immediately cease and terminate.  Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys’ fees (to include outside
counsel fees and all allocated costs of the holder’s in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder’s rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any adversary
proceeding, contested matter or motion brought by Bank or any other person)
relating to any Borrower or any other person or entity.

             (b)        Obligations Joint and Several.  Should more than one person or entity sign
this Note as Borrower, the obligations of each such Borrower shall be joint and
serveral.

             (c)         Governing Law.  This Note shall be governed by and construed
in accordance with the laws of the State of California.

             IN
WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.

Fiberstars,
Inc.

By: 
/s/ Robert A. Connors      

Title: Chief Financial OfficerPrepared by MerrillDirect

	 	EXHIBIT 10.3
	 	 
	 	CONTINUING
  SECURITY AGREEMENT
	WELLS
  FARGO BANK

	RIGHTS TO
  PAYMENT AND INVENTORY

1.          GRANT
OF SECURTY INTEREST.  For valuable
consideration, the undersigned Fiberstars, Inc., or any of them
(“Debtor”), hereby grants and transfers to WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Bank”) a security interest in all accounts, deposit accounts,
chattel paper, instrument, documents and general intangibles (collectively
called “Rights to Payment”), now existing or at any time hereafter, and prior to
the termination hereof, arising (whether they arise from the sale, lease or
other disposition of inventor or from performance of contracts for service,
manufacture, construction, repair or otherwise or from any other source
whatsoever), including all securities, guaranties, warranties, indemnity
agreements, insurance policies and other agreements pertaining to the same or
the property described therein, and in all goods returned by or repossessed
from Debtor’s customers, together with a security interest in all inventory,
goods held for sale or lease or to be furnished under contracts for service,
goods so leased or furnished, raw materials, component parts, work in process
or materials used or consumed in Debtor’s business and all warehouse receipts,
bills of lading and other documents evidencing goods owned or acquired by
Debtor, and all goods covered thereby, now or at any time hereafter, and prior
to the termination hereof, owned or acquired by Debtor, wherever located, and
all products thereof (collectively called “Inventory”), whether in the
possession of Debtor, warehousemen, bailees or any other person, or in process
of delivery and whether located at Debtor’s places of business of elsewhere
(with all Rights to Payment and Inventory referred to herein collectively as
the “Collateral”), together with whatever is receivable or received when any of
the Collateral or proceeds thereof are sold, leased, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary,
including without limitation, all Rights to Payment, including returned
premiums, with respect to involuntary, including with limitation, all Rights to
Payment, including returned premiums, with respect to any insurance relating to
any of the foregoing, and all Rights to Payment with respect to any cause of
action affecting or relating to any of the foregoing (hereinafter called
“Proceeds”).

2.          OBLIGATIONS
SECURED.  The obligations secured hereby
are the payment and performance of: (a) all present and future Indebtedness of
Debtor to Bank; (b) all obligations of Debtor and rights of Bank under this
Agreement; and (c) all present and future obligations of Debtor to Bank of
other kinds.  The word “Indebtedness” is
used herein in its most comprehensive sense and includes any and all advances,
debts, obligations and liabilities of Debtor, or any of them, hereto fore, now
or hereafter made, incurred or created, whether voluntary or involuntary and
however arising, whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether Debtor may be liable
individually or jointly, or whether recovery upon such Indebtedness may be or
hereafter becomes unenforceable.

3.          TERMINATION.  This Agreement will terminate upon the
performance of all obligations of Debtor o Bank, including without limitation,
the payment of all Indebtedness of Debtor to Bank, and the termination of all
commitments of Bank to extend credit to Debtor, existing at the time Bank
receives written notice from Debtor of the termination of this Agreement.

4.          OBLIGATIONS
OF BANK.  Bank has no obligation to make
any loans hereunder.  Any money received
by Bank in respect of the Collateral may be deposited, at Bank’s option, into a
non-interest bearing account over which Debtor shall have no control, and the
same shall, for all purposes, be deemed Collateral hereunder.

5.          REPRESENTATIONS
AND WARRANTIES.  Debtor represents and
warrants to Bank that:  (a) Debtor is
the owner and has possession or control of the Collateral and Proceeds; (b)
Debtor has the right to grant a security interest in the Collateral and
Proceeds; (c) all Collateral and Proceeds are genuine, free from liens, adverse
claims, setoffs, default, prepayment, defenses and conditions precedent of any
kind or character, except the lien created hereby or as otherwise agreed to by
Bank, or heretofore disclosed by Debtor to Bank, in writing; (d) all
settlements contained herein and, where applicable, in the Collateral are true
and complete in all material respects; (e) no financing statement covering any
of the Collateral or Proceeds, and naming any public office; (f) all persons
appearing to be obligated on Rights to Payment and Proceeds have authority and
capacity to contract and are bound as they appear to be; (g) all property
subject to chattel paper has be properly registered and filed in compliance
with law and to perfect the interest of Debtor in such property; and (h) all
Rights to Payment and Proceeds comply with all applicable laws concerning form,
content and manner of preparation and execution, including where applicable
Federal Reserve Regulation Z and any State consumer credit laws.

6.          CONVENANTS
OF DEBTOR.

             (a)         Debtor
Agrees in general: (i) to pay Indebtedness secured hereby when due; (ii) to
Indemnify Bank against all losses, claims, demands, liabilities, and expenses
of every kind caused by property subject hereto; (iii) to pay all costs and
expenses, including reasonable attorneys’ fees, incurred by Bank in the
perfection and preservation of the Collateral or Bank’s interest therein and/or
the realization, enforcement and exercise of Bank’s rights, powers and remedies
hereunder; (iv) to permit Bank to exercise it’s power; (v) to execute and
deliver such documents as Bank deems necessary to create, perfect and continue
the security interests contemplated hereby; and (vi) not to change its chief
place of business (or personal residence, if applicable) or the place where
Debtor keeps any of the Collateral or Debtor’s records concerning the
Collateral and Proceeds without first giving Bank written notice of the address
to which Debtor is moving same.

             (b)        Debtor agrees with regard to the Collateral and
Proceeds, unless Bank agrees otherwise in writing: (i) to insure Inventory and,
where applicable, Rights to Payment with Bank as loss payee, in form, substance
and amounts, under agreements, against risks and liabilities, and with
insurance companies satisfactory to Bank; (ii) not to use any Inventory for any
unlawful purpose or in anyway that would void any insurance required to be
carried in connection therewith; (iii) not to remove Inventory from Debtor’s
premises, except for deliveries to buyers in the ordinary course of Debtor’s
business and except Inventory which consists of mobile goods as defined in the
California Uniform Commercial Code, in which case Debtor agrees not to remove
or permit the removal of the Inventory from its state of domicile for a period
in excess of 30 calendar days; (iv) not to permit any security interest in or
lien on the Collateral or Proceeds, including without limitation, liens arising
from the storage of Inventory, except in favor of Bank; (v) not to sell,
hypothecate or otherwise dispose of, nor permit the transfer by operation of
law of, any of the Collateral or Proceeds or any interest therein, except sales
of Inventory to buyers in the ordinary course of Debtor’s business; (vi) to
furnish reports to Bank of all acquisitions, returns, sales and other
dispositions of the Inventory in such form and detail and at such times as Bank
may require; (vii) to permit Bank to inspect the Collateral at any time ;
(viii) to keep, in accordance with generally accepted accounting principles,
complete and accurate records regarding all Collateral and Proceeds, and to
permit Bank to inspect the same and make copies thereof at any reasonable time;
(ix) if requested by Bank, to receive and use reasonable diligence to collect
Rights to Payment and Proceeds, in trust and as the property of Bank and to
immediately endorse an appropriate and deliver such Rights to Payment and
Proceeds to Bank daily in the exact form in which they are received together
with a collection report in form satisfactory to Bank; (x) not to commingle
Rights to Payment , Proceeds or collections thereunder with other property;
(xi) to give only normal allowances and credits and to advise Bank thereof
immediately in writing if they affect any Rights to Payment or Proceeds in any
material respect; (xii) on demand, to deliver to Bank returned property
resulting from, or payment equal to, such allowances or credits on any Rights
to Payment or Proceeds or to execute such documents and do such other things as
Bank may reasonably request for the purpose of perfecting, preserving and
enforcing its security interest in such returned property; (xiii) from time to
time, when requested by Bank, to prepare and deliver a schedule of all
Collateral and Proceeds subject to this Agreement and to assign in writing and
deliver to Bank all accounts, contracts, leases and other chattel paper, instruments,
documents and other evidences thereof; (xiv) in the event Bank elects to
receive payments of Rights to Payment or Proceeds hereunder, to pay all
expenses incurred by Bank in connection therewith, including expenses of
accounting, correspondence, collection efforts, reporting to account or
contract debtors, filing, recording, record keeping and expenses incidental
thereto; and (xv) to provide any service and do any other acts which may be
necessary to maintain, preserve and protect all Collateral and, as appropriate
and applicable, to keep all Collateral in good and saleable condition in
accordance with the standards and practices adhered to generally by users and
manufacturers of like property, and to keep all Collateral and Proceeds free
and clear of all defenses, rights of offset and counterclaims.

7.          POWERS
OF BANK.  Debtor appoints Bank its true
attorney-in-fact to perform any of the following powers, which are coupled with
an interest, are irrevocable until termination of this Agreement and may be
exercised from time to time by Bank’s officers and employees, or any of them,
whether or not Debtor is in default: (a) to perform any obligation of Debtor
hereunder in Debtor’s name or otherwise; (b) to give notice to account debtors
or others of Bank’s rights in the Collateral and Proceeds, to enforce the same
and make extension agreements with respect thereto; (c) to release persons
liable on Proceeds and to give receipts and acquittances and compromise
disputes in connection therewith; (d) to release security; (e) to resort to
security in any order; (f) to prepare, execute, file, record or deliver notes,
assignments, schedules, designation statements, financing statements
continuation statements, termination statements, statements of assignment,
applications of registration or like papers to perfect, preserve or release
Bank’s interest in the Collateral and Proceeds; (g) to receive, open and real
mail address to Debtor; (h) to take cash, instruments for the payment of money
and other property to which Bank is entitled; (I) to verify facts
concerning  the Collateral and Proceeds
by inquiry of obligors thereon, or otherwise, in its own name or a fictitious
name; (j)  to endorse, collect, deliver
and receive payment under instruments for the payment of money constituting or
relating to Proceeds; (k) to prepare, adjust, execute, deliver and receive
payment under insurance claims, and to collect and receive payment of and
endorse any instrument in payment of loss or returned premiums or any other
insurance refund or return, and to apply such amounts received by Bank, at
Bank’s sole option, toward repayment of the Indebtedness or replacement of the
Collateral; (l) to exercise all rights, powers and remedies which Debtor would
have, but for this agreement, with respect to all Collateral and Proceeds
subject hereto; (m) to enter onto Debtor’s premises in inspecting the
Collateral; (n) to make withdrawals from and to close deposit accounts or other
accounts with any financial institution, wherever located, into which Proceeds
may have deposited, and to apply funds so withdrawn to payment of the
Indebtedness; (o) to preserve or release the interest evidenced by chattel
paper to which Bank is entitled hereunder and to endorse and deliver evidences
of title incidental thereto; and (p) to do all acts and things and execute all
documents in the name of Debtor or otherwise, deemed by Bank as necessary,
proper and convenient in connection with the preservation, perfection or
enforcement of its rights hereunder.

8.          PAYMENT
OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS.  Debtor agrees to pay prior to delinquency, all insurance
premiums, taxes, charges, liens and assessments against the Collateral and
Proceeds, and upon the failure of Debtor to do so, Bank at its option may pay
any of them and shall be the sole judge of the legality or validity thereof and
the amount necessary to discharge the same. 
Any such payments made by Bank shall be obligations of Debtor to Bank,
due and payable immediately upon demand, together with interest at a rate
determined in accordance with the provisions of Section 15 herein, and shall be
secured by the Collateral and Proceeds, subject to all terms and conditions of
this Agreement.

9.          EVENTS
OF DEFAULT.  The occurrence of any of
the following shall constitute an “Event of Default” under this Agreement: (a)
any default in the payment or performance of any obligation, or any defined
event of default, under (i) any contract or instrument evidencing any
Indebtedness, or (ii) any other agreement between any Debtor and Bank,
including without limitation any loan agreement, relating to or executed in
connection with any Indebtedness; (b) any representation or warranty made by
any Debtor herein shall prove to be incorrect in any material respect when made;
(c) any Debtor shall fail to observe or perform any obligation or agreement
contained herein; (d) any attachment or like levy on any property of any
Debtor; and (e) Bank, in good faith, believes any or all of the Collateral
and/or Proceeds to be in danger of misuse, dissipation, commingling, loss,
theft, damage or destruction, or otherwise in jeopardy or unsatisfactory in
character or value.

10.        REMEDIES.  Upon the occurrence of any Event of Default,
Bank shall have the right to declare immediately due and payable all or any
Indebtedness secured hereby and to terminate any commitments to make loans or
otherwise extend credit to Debtor.  Bank
shall have all other rights, powers, privileges and remedies granted to a
secured party upon default under the California Uniform Commercial Code or
otherwise provided by law, including without limitation, the right to contact
all persons obligated to Debtor on any Collateral or Proceeds and to instruct
such persons to deliver all Collateral and/or Proceeds directly to Bank.   All rights, powers, privileges and remedies
of Bank shall be cumulative.  No delay,
failure or discontinuance of Bank in exercising any right, power, privilege or
remedy hereunder shall affect or operate as a waiver of such right, power,
privilege or remedy; nor shall any single or partial exercise of any such
right, power, privilege or remedy preclude, waive or otherwise affect any other
or further exercise thereof or the exercise of any other right, power,
privilege or remedy.  Any waiver, permit,
consent or approval of any kind by Bank of any default hereunder, or any such
waiver of any provisions or conditions hereof, must be in writing and shall be
effective only to the extent set forth in writing.  It is agreed that public or private sales, for cash or on credit,
to a wholesaler or retailer or investor, or user of property of the types
subject to this Agreement, or public auction, are all commercially reasonable
since differences in the sales prices generally realized in the different kinds
of sales are ordinarily offset by the differences in the costs and credit risks
of such sales.  While an Event Default
exists: (a) Debtor will deliver to Bank from time to time, as requested by
Bank, current lists of all Collateral and Proceeds; (b) Debtor will not dispose
of any of the Collateral or Proceeds except on terms approve by Bank; (c) at
Bank’s request, Debtor will assemble and deliver all Collateral and Proceeds,
and books and records pertaining thereto, to Bank at a reasonably convenient
place designated by Bank; and (d) Bank may, without notice to Debtor, enter
onto Debtor’s premises and take possession of the Collateral.  With respect to any sale by Bank of any
Collateral subject to this Agreement, Debtor hereby expressly grants to Bank
the right to sell such Collateral using any or all of Debtor’s trademarks,
trade names, trade name rights and/or proprietary labeles or marks.

11.        DISPOSITION
OF COLLATERAL AND PROCEEDS.   Upon the
transfer of all or any part of the Indebtedness, Bank may transfer all or any
part of the Collateral or Proceeds and shall be fully discharged thereafter
from all liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers of
Bank hereunder with respect to any of the foregoing so transferred; but with
respect to any Collateral or Proceeds not so transferred Bank shall retain all
rights, powers, privileges and remedies herein given.  Any proceeds of any disposition of any of the Collateral or
Proceeds, or any part thereof, may be applied by Bank to the payment of
expenses incurred by Bank in connection with the foregoing, including
reasonable attorney’s fees, and the balance of such proceeds may be applied by
Bank toward the payment of the Indebtedness in such order of application as
Bank may from time to time elect.

12.        STATUTE
OF LIMITATIONS.  Until all Indebtedness
shall have been paid in full and all commitments by Bank to extend credit to
Debtor have been terminated, the power of sale and all other rights, powers,
privileges and remedies granted to Bank hereunder shall continue to exist and
may be exercised by Bank at any time and from time to time irrespective of the
fact that the Indebtedness or any part thereof may have become barred by any
statute of limitations, or that the personal liability of Debtor may have
ceased, unless such liability shall have ceased due tot the payment in full of
all Indebtedness secured hereunder.

13.        MISCELLANEOUS.  (a) The obligations of Debtor are joint and
several; (b) Debtor hereby waives any right (I) to require Bank to make any
presentment or demand, or give any notice of nonpayment or nonperformance,
protest, notice of protest or notice of dishonor hereunder, (ii) to direct the
application of payments or security for Indebtedness of Debtor or indebtedness
of customers of Debtor, or (iii) to require proceedings against others or to
require exhaustion of security; and (c) Debtor hereby consents to extensions,
for bearances or alterations of the terms of Indebtedness, the release or
substitution of security, and the release of any guarantors; provided however,
that in each instance, Bank believes in good faith that the action in question
is commercially reasonable in that it does not unreasonably increase the risk
of nonpayment of the Indebtedness to which the action applies.  Until all Indebtedness shall have been paid
in full, no Debtor shall have any right of subrogation or contribution, and
each Debtor hereby waives any benefit of or right to participate in any of the
Collateral or Proceeds or any other security now or hereafter held by Bank.

14.        NOTICES.   All notices, requests and demands required
under this Agreement must be in writing, addressed to Bank at the address
specified in any other loan documents entered into between Debtor and Bank and
to Debtor at the address of its chief executive office (or personal residence,
if applicable) specified below or to such other address as any party may
designate by written notice to each other party, and shall be deemed to have
been given or made as follows: (a) if personally delivered, upon delivery; (b)
if sent by mail, upon the earlier of the date of receipt or 3 days after
deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by
telecopy, upon receipt.

15.        COSTS,
EXPENSES AND ATTORNEYS’ FEES.  Debtor
shall pay to Bank immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys’ fees (to
include outside counsel feels and all allocated costs of Bank’s in-house
counsel), expended or incurred by Bank in exercising any right, power,
privilege or remedy conferred by this Agreement or in the enforcement thereof,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with
any bankruptcy proceeding (including without limitation, any adversary
proceeding, contested matter or motion brought by Bank or any other person)
relating to Debtor or in any way affecting any of the Collateral or Bank’s
ability to exercise any of its rights or remedies with respect thereto.  All of the foregoing shall be paid by Debtor
with interest from the date of demand until paid in full at a rate per annum
equal to the greater of ten percent (10%) or Bank’s Prime Rate in effect from
time to time.

16.        SUCCESSORS;
ASSIGNS; AMENDMENT.  This Agreement
shall be binding upon and inure to the benefit of the heirs, executors,
administrators, legal representatives, successors and assigns of the parties,
and may be amended or modifies only in writing signed by Bank and Debtor.

17.        OBLIGATIONS
OF MARRIED PERSONS.  Any married person
who signs this Agreement as Debtor hereby expressly agrees that recourse may be
had against his or her separate property for all his or her Indebtedness to
Bank secured by the Collateral and Proceeds under this Agreement.

18.        SEVERABILITY
OF PROVISIONS.  If any provision of this
Agreement shall be held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision of such
provision or any remaining provisions of this Agreement.

19.        GOVERNING
LAW.  This Agreement shall be governed
by and construed in accordance with the law of the State of California.

   
Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address:  44259 NOBEL DRIVE, FREMONT, CA 
94538

    Debtor warrants that the Collateral (except goods in transit) is
located or domiciled at the following additional address:

NONE

    IN
WITNESS WHEREOF, this Agreement has been duly executed as of March 23,
2001.

 

Fiberstars,
Inc.

 

By:       /s/
Robert A. Connors

Title:    Chief
Financial Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}]]