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Prepared by MERRILL CORPORATION

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EXHIBIT 10.62  

 
 

AMENDMENT NUMBER TWO TO
  LOAN AND SECURITY AGREEMENT    
  

    THIS AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT (this "Amendment"), is entered into as of May
  , 2001, between FOOTHILL CAPITAL CORPORATION, a California corporation, ("Foothill"), and NETWORK COMPUTING
DEVICES, INC., a Delaware corporation ("Borrower"), with reference to the following facts: 

    WHEREAS, Foothill and Borrower are parties to that certain Loan and Security Agreement, dated as of March 30, 2000 (as amended,
restated, or modified from time to time, the "Agreement"); 

    WHEREAS, Borrower has requested that Foothill, among other things, remove the domestic availability limit from the calculation of the
Borrowing Base in order to increase Availability; and 

    WHEREAS, Foothill is willing to consent to the removal of the domestic availability limit and to make certain amendments and take other
actions with respect to the Agreement, all on the terms and conditions set forth herein. 

    NOW, THEREFORE, in consideration of the above recitals and the mutual promises contained herein, Foothill and Borrower hereby agree as
follows: 

    1.  Defined Terms.  All capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Agreement, as amended hereby. 

    2.  Amendments to the Agreement.  

    (a)
Clause (a) of the definition of "Eligible Foreign Accounts" contained in Section 1.1 of the Agreement hereby is
amended and restated in its entirety as follows: 

    (a)
Foreign Accounts that the Account Debtor has failed to pay within 90 days of original invoice date or Foreign Accounts that are more than 60 days past due;  provided, however, that with respect
to Foreign Accounts as to which Adtcom is the Account Debtor, such Foreign Accounts shall not be deemed Eligible
Foreign Accounts in the event Adtcom has failed to pay such Foreign Accounts within 60 days of original invoice date or such Foreign Accounts are more than 30 days past due, such revised
dating terms with respect to Foreign Accounts as to which Adtcom is the Account Debtor to be effective on and after May 31, 2001 unless such revised dating terms are applied prior to such date
in the sole discretion of Foothill; 

    (b)
Section 1.1 of the Agreement hereby is amended by adding or amending and restating, as applicable, the following defined
terms in the proper alphabetical order: 

    "Applicable Prepayment Premium" means, as of any date of determination, an amount equal to (a) during the period of time from
and including the date of the execution and delivery of this Agreement up to the first anniversary of the Closing Date, 1.0% times the Maximum Amount,
(b) during the period of time from and including the first anniversary of the Closing Date up to the second anniversary of the Closing Date, .667%  times the Maximum Amount, and (c) during the
period of time from and including the second anniversary of the Closing Date and thereafter, .334%  times the Maximum Amount; provided, however, that if the
Obligations are repaid in full in cash and this
Agreement is terminated concurrent with a secondary public offering by Borrower of its common Stock, a private placement by Borrower of its Stock, the issuance of subordinated debt by Borrower, the
sale of all or substantially all of Borrower's Stock or Assets, or a refinancing of the Obligations by a commercial banking unit of Wells Fargo, then, in any such case, the Applicable Prepayment
Premium shall be an amount equal to (a) during the period of time from and including the date of the execution and delivery of this Agreement up to the first anniversary of the Closing Date,
 .5% times the Maximum Amount, (b) during the period of time from and including the first anniversary of the Closing Date up to the second
anniversary of the Closing Date, .334% times the Maximum 

 

Amount, and (c) during the period of time from and including the second anniversary of the Closing Date and thereafter, 0.167% times the Maximum
Amount. 

    "EBITDA" means, for any period, determined on a consolidated basis, the sum of (a) net income (or net loss) exclusive of any
reduction in the bad debt reserves to the extent any such reduction results in an increase in net income, (b) interest expense, (c) income tax expense, (d) depreciation expense,
(e) amortization expense, and (f) non-cash charges relating to non-recurring write downs of goodwill, furniture, fixtures and equipment, in each case determined
in accordance with GAAP for such period. 

    (c)
Clause (z) of Section 2.1(a) of the Agreement hereby is amended and restated in its entirety as follows: 

    (z)
the least of 

	(i)
	the
result of: 

    (A)
the lesser of 75% of Eligible Foreign Accounts, plus

    (B)
the lesser of (1) 75% of Eligible Extended Term Foreign Accounts, and (2) the result of $1,000,000 minus the amount
of Availability created pursuant to clause (y)(i)(B) above, minus

    (C)
the aggregate amount of Foreign Exchange Reserves; 

	(ii)
	$7,500,000;

	(iii)
	the
amount of Availability created pursuant to clause (y) above;

	(iv)
	an
amount equal to a percentage (to be determined by Foothill from time to time in its Permitted Discretion) of Borrower's Collections with
respect to Foreign Accounts for a period of time (to be determined by Foothill from time to time in its Permitted Discretion) preceding any date of determination of the Borrowing Base; and

	(v)
	an
amount not to exceed 70% of total Availability as of any date of determination. 

    (d)
Section 7.20 of the Agreement hereby is amended and restated in its entirety as follows: 

    7.20
Financial Covenants. Fail to maintain: 

    (a)
Tangible Net Worth. Tangible Net Worth as of each date set forth below of at least the amount corresponding thereto: 

	Date
	 	Amount
	 
	June 30, 2001	 	$	(103,000	)
	September 30, 2001	 	$	3,374,000	 
	December 31, 2001	 	$	4,387,000	 

    On
or before September 30, 2001, Borrower shall deliver to Foothill revised Projections, in form and substance satisfactory to Foothill, covering the period from
January 1, 2002, through December 31, 2002. Upon receipt of such revised Projections, Foothill shall establish, in its Permitted Discretion, minimum Tangible Net Worth amounts to be
measured as of the last day of each fiscal quarter of Borrower's 2002 fiscal year commencing with the fiscal quarter ending March 31, 2002. Additionally, on or before September 30, 2002,
Borrower shall deliver to Foothill, revised Projections, in form and substance satisfactory to Foothill, covering the period from January 1, 2003 through December 31, 2003. Upon receipt
of such revised Projections, Foothill shall establish, in its Permitted Discretion, minimum Tangible Net Worth amounts to be measured as of the last day of each fiscal quarter of Borrower's 2003
fiscal year commencing with the fiscal quarter ending 

2

 

March 31, 2003. The failure to so deliver such revised Projections constitutes an Event of Default. 

    (b)
Minimum EBITDA. EBITDA, measured on a fiscal quarter-end basis, in an amount at least equal to the required amount set forth in the following table for the applicable
period set forth opposite thereto: 

	Required Amount
	 	Applicable Period

	$	38,000	 	For the 3 month period ending June 30, 2001
	$	1,009,000	 	For the 3 month period ending September 30, 2001
	$	1,710,000	 	For the 3 month period ending December 31, 2001

    Notwithstanding
anything to the contrary in Section 6.3, Borrower shall provide to Foothill as soon as available, but in any
event within 30 days after the end of the above referenced fiscal quarters, its financial statements for the previous fiscal quarter. On or before September 30, 2001, Borrower shall
deliver to Foothill revised Projections, in form and substance satisfactory to Foothill, covering the period from January 1, 2002, through December 31, 2002. Upon receipt of such revised
Projections, Foothill shall establish, in its Permitted Discretion, minimum EBITDA amounts to be measured as of the last day of each fiscal quarter of Borrower's 2002 fiscal year commencing with the
fiscal quarter ending March 31, 2002. Additionally, on or before September 30, 2002, Borrower shall deliver to Foothill, revised Projections, in form and substance satisfactory to
Foothill, covering the period from January 1, 2003 through December 31, 2003. Upon receipt of such revised Projections, Foothill shall establish, in its Permitted Discretion, minimum
EBITDA amounts to be measured as of the last day of each fiscal quarter of Borrower's 2003 fiscal year commencing with the fiscal quarter ending March 31, 2003. The failure to so deliver such
revised Projections constitutes an Event of Default. 

    3.  Removal of Foreign Availability Cap.  Foothill hereby agrees, from and after the effectiveness of
this Amendment, and until such time as Foothill in its sole and absolute discretion determines to reapply such limitation; and from time to time thereafter, again subject to Foothill discretion, not
to limit Availability provided by Eligible Foreign Accounts through the application of subclause (iii) of clause (z) of  Section 2.1(a), but to permit Availability provided by Eligible
Foreign Accounts to exceed Availability provided by Domestic Eligible Accounts,
subject to the other requirements of Section 2.1(a)(z). 

    4.  Representations and Warranties.  Borrower hereby represents and warrants to Foothill that: 

    (a)
the execution, delivery, and performance of this Amendment and of the Agreement, as amended by this Amendment, are within its corporate powers, have been duly authorized by all
necessary corporate action, and are not in contravention of any law, rule, or regulation, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental
authority, or of the terms of its charter or bylaws, or of any contract or undertaking to which it is a party or by which any of its properties may be bound or affected, 

    (b)
this Amendment and the Agreement, as amended by this Amendment, constitute Borrower's legal, valid, and binding obligation, enforceable against Borrower in accordance with its
terms, and 

    (c)
this Amendment has been duly executed and delivered by Borrower. 

3

 

    5.  Amendment Fee.  Borrower shall pay to Foothill an amendment fee of $150,000, which fee shall be fully
earned as of the effectiveness of this Amendment, but which fee shall be payable in twelve equal installments of $12,500, such installments payable on the first day of May, 2001 and continuing monthly
until and including the first day of April, 2002. 

    6.  Conditions Precedent to Amendment.  The satisfaction of each of the following shall constitute
conditions precedent to the effectiveness of this Amendment: 

    (a)
Foothill shall have received the reaffirmation and consent attached hereto as Exhibit A, duly executed and delivered by an
authorized officer of each Guarantor; 

    (b)
The representations and warranties in this Amendment, the Agreement as amended by this Amendment, and the other Loan Documents shall be true and correct in all respects on and as
of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date); 

    (c)
No Event of Default or event which with the giving of notice or passage of time would constitute an Event of Default shall have occurred and be continuing on the date hereof, nor
shall result from the consummation of the transactions contemplated herein; 

    (d)
No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall have been
issued and remain in force by any governmental authority against Borrower or Foothill; and 

    (e)
All other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered or executed or recorded and shall be in form and
substance satisfactory to Foothill and its counsel. 

    7.  Notice.  Notwithstanding previous practice under the Agreement, Foothill hereby notifies Borrower
that as of May 15, 2001 Foothill shall strictly adhere to Section 2.8 of the Agreement. 

    8.  Miscellaneous.  

    (a)
Upon the effectiveness of this Amendment, each reference in the Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like import referring to the Agreement
shall mean and refer to the Agreement as amended by this Amendment. 

    (b)
Upon the effectiveness of this Amendment, each reference in the Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or words of like import referring to the
Agreement shall mean and refer to the Agreement as amended by this Amendment. 

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

    (d)
This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as
effective as delivery of a manually executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment. 

    [Remainder
of page left intentionally blank] 

4

 

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

	 	 	NETWORK COMPUTING DEVICES, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
FOOTHILL CAPITAL CORPORATION,

a California corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

5

 
 
 

Exhibit A
  
    REAFFIRMATION AND CONSENT    
  

    All capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in that certain Amendment Number Two to Loan and
Security Agreement, dated as of May  , 2001 (the "Amendment"). The undersigned hereby (a) represents and warrants to Foothill that the execution, delivery, and performance of
this Reaffirmation and Consent are within its corporate powers, have been duly authorized by all necessary corporate action, and are not in contravention of any law, rule, or regulation, or any order,
judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental authority, or of the terms of its charter or bylaws, or of any contract or undertaking to which it is a party or
by which any of its properties may be bound or affected; (b) consents to the amendment of the Agreement by the Amendment and to the transactions described therein; (c) acknowledges and
reaffirms its obligations owing to Foothill under the Guaranty and any other Loan Documents to which it is a party; and (d) agrees that each of the Guaranty and any other Loan Documents to
which it is a party is and shall remain in full force and effect. Although the undersigned has been informed of the matters set forth herein and has acknowledged and agreed to same, it understands
that Foothill has no obligations to inform it of such matters in the future or to seek its acknowledgement or agreement to future amendments, and nothing herein shall create such a duty. Delivery of
an executed counterpart of this Reaffirmation and Consent by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Reaffirmation and Consent. Any party
delivering an executed counterpart of this Reaffirmation and Consent by telefacsimile also shall deliver an original executed counterpart of this Reaffirmation and Consent but the failure to deliver
an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed by the laws of
the State of California. 

	 	 	AUSTRALIA, NETWORK COMPUTING

DEVICES (BENELUX) B.V., a company

organized under the laws of The Netherlands
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES

(CANADA), INC., a corporation organized under

the laws of Canada
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES

(FRANCE) S.A.R.L., a company organized

under the laws of France
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

6

 

	

 	
 	
NETWORK COMPUTING DEVICES,

GMBH, a company organized under the laws of Germany
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NCD GRAPHIC SOFTWARE

CORPORATION, an Oregon corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES (FSC),

INC., a Guam corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NCD ACQUISITION CORP., an Indiana corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES (UK),

LTD., a company organized under the laws of England
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES

SCANDINAVIA AB, a company organized under the laws of Sweden
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

7

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AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT

Exhibit A REAFFIRMATION AND CONSENTPrepared by MERRILL CORPORATION

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EXHIBIT 10.63  

 
 

AMENDMENT NUMBER THREE TO
  LOAN AND SECURITY AGREEMENT    
  

    THIS AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), is entered into as of May  , 2001, between FOOTHILL CAPITAL CORPORATION, a
California corporation, ("Foothill"), and NETWORK COMPUTING DEVICES, INC., a Delaware corporation ("Borrower"), with reference to the following
facts: 

    WHEREAS, Foothill and Borrower are parties to that certain Loan and Security Agreement, dated as of March 30, 2000 (as amended,
restated, or modified from time to time, the "Agreement"); 

    WHEREAS, Borrower has requested that Foothill, make certain changes to the Agreement; and 

    WHEREAS, Foothill is willing to consent to these certain changes and take other actions with respect to the Agreement, all on the terms
and conditions set forth herein. 

    NOW, THEREFORE, in consideration of the above recitals and the mutual promises contained herein, Foothill and Borrower hereby agree as
follows: 

1.  Defined Terms.  All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to
them in the Agreement, as amended hereby. 

2.  Amendments to the Agreement.  

    (a)  Section 1.1  of the Agreement hereby is amended by adding or amending and restating, as
applicable, the following defined terms in the proper alphabetical order: 

    "Maturity Date" has the meaning set forth in Section 3.4.

    "Obligations" means all loans, Advances, debts, principal, interest (including any interest that, but for the provisions of the
Bankruptcy Code, would have accrued), premiums, liabilities (including all amounts charged to Borrower's Loan Account pursuant hereto), obligations, the Second Amendment Fee, the Third Amendment Fee,
any other fees, charges, costs, or Foothill Expenses (including any fees or expenses that, but for the provisions of the Bankruptcy Code, would have accrued), lease payments, guaranties, covenants,
and duties owing by Borrower to Foothill of any kind and description (whether pursuant to or evidenced by the Loan Documents or pursuant to any other agreement between Foothill and Borrower, and
irrespective of whether for the payment of money), whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including any debt, liability, or
obligation owing from Borrower to others that Foothill may have obtained by assignment or otherwise, and further including all interest not paid when due and all Foothill Expenses that Borrower is
required to pay or reimburse by the Loan Documents, by law, or otherwise. 

    "Second Amendment" means that certain Amendment Number Two to Loan and Security Agreement, dated as of May 14, 2001 between
Borrower and Foothill. 

    "Second Amendment Fee" means an amendment fee of $150,000 in consideration for Foothill entering into the Second Amendment, which fee
shall be fully earned as of the effectiveness of the Second Amendment, but which fee shall be payable in cash in installments of (i) $12,500 on the first day of May, 2001, June, 2001, July,
2001 and August, 2001 and (ii) $100,000 on the earlier to occur of (i) August 15, 2001 or (ii) the date on which the Agreement is terminated by the provisions of either  Section 3.6 or Section 3.7 of the Agreement. This definition amends
Section 5 of the Second Amendment. 

    "Third Amendment" means that certain Amendment Number Three to Loan and Security Agreement, dated as of May  , 2001,
between Borrower and Foothill. 

 

    "Third Amendment Closing Date" means the date that all conditions set forth in  Section 5 of the Third Amendment have been
satisfied. 

    "Third Amendment Fee" has the meaning ascribed thereto in Section 4 of the Third
Amendment. 

    (b)  Section 1.1  of the Agreement hereby is amended by deleting the following defined terms: 

    The
defined terms "Applicable Prepayment Premium" and "Early Termination Premium" are hereby deleted from the Agreement. All references to "Applicable Prepayment Premium" and "Early
Termination Premium" throughout the Agreement hereby shall be deleted. 

    (c)  Section 2.6(a)  of the Agreement hereby is amended and restated in its entirety as follows: 

    (a) Interest
Rate. Except as provided in clause (c) below, (i) all Obligations shall bear interest at a
per annum rate of 2.75 percentage points above the Base Rate. 

    (d)  Section 3.4  of the Agreement is amended and restated in its entirety as follows: 

    3.4  Term.  This Agreement shall become effective upon the execution and delivery hereof by Borrower and
Foothill and shall continue in full force and effect for a term ending on August 15, 2001 (the "Maturity Date"). The foregoing notwithstanding, Foothill shall have the right to terminate its
obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default. 

    (e)  Section 3.6  of the Agreement is amended and restated in its entirety as follows: 

    3.6  Early Termination by Borrower.  The provisions of  Section 3.4 to the contrary notwithstanding, Borrower has the option, at any time upon
5 days prior written notice to Foothill, to
terminate this Agreement by paying to Foothill, in cash, the Obligations (except for the Third Amendment Fee). 

    (f)  Section 3.7  of the Agreement is amended and restated in its entirety as follows: 

    3.7  Termination Upon Event of Default.  If Foothill terminates this Agreement upon the occurrence of an
Event of Default, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of Foothill's lost profits
as a result thereof, Borrower shall pay to Foothill upon the effective date of such termination, a premium in an amount equal to the Third Amendment Fee. The Third Amendment Fee shall be presumed to
be
the amount of damages sustained by Foothill as the result of the early termination and Borrower agrees that it is reasonable under the circumstances currently existing. 

3.  Representations and Warranties.  Borrower hereby represents and warrants to Foothill that: 

    (a) the
execution, delivery, and performance of this Amendment and of the Agreement, as amended by this Amendment, are within its corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention of any law, rule, or regulation, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or
governmental authority, or of the terms of its charter or bylaws, or of any contract or undertaking to which it is a party or by which any of its properties may be bound or affected, 

    (b) this
Amendment and the Agreement, as amended by this Amendment, constitute Borrower's legal, valid, and binding obligation, enforceable against Borrower in
accordance with its terms, and 

    (c) this
Amendment has been duly executed and delivered by Borrower. 

4.  Amendment Fee.  Borrower shall pay to Foothill an amendment fee of $100,000 (the "Third
Amendment Fee"), which fee shall be fully earned as of the effectiveness of this Amendment; provided, however, that if the
Borrower shall fully pay in cash all of the Obligations (except for the Third Amendment Fee) no later than August 15, 2001, then the Third Amendment Fee shall be waived by Foothill. If all of
the Obligations (except for the Third Amendment Fee) are not fully paid in cash by 

2

 

August 15, 2001, then Borrower shall pay Foothill in cash the Third Amendment Fee as of August 16, 2001. Notwithstanding the foregoing, if Foothill shall exercise the termination
provisions in Section 3.7 of the Agreement, then Borrower shall pay Foothill the Third Amendment Fee on the date that Foothill exercises its
rights under Section 3.7 of the Agreement. 

5.  Conditions Precedent to Amendment.  The satisfaction of each of the following shall constitute conditions precedent to
the effectiveness of this Amendment: 

    (a) Foothill
shall have received the reaffirmation and consent attached hereto as Exhibit A, duly executed and
delivered by an authorized officer of each Guarantor; 

    (b) The
representations and warranties in this Amendment, the Agreement as amended by this Amendment, and the other Loan Documents shall be true and correct in all
respects on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date); 

    (c) No
Event of Default or event which with the giving of notice or passage of time would constitute an Event of Default shall have occurred and be continuing on the
date hereof, nor shall result from the consummation of the transactions contemplated herein; 

    (d) No
injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein
shall have been issued and remain in force by any governmental authority against Borrower or Foothill; and 

    (e) All
other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered or executed or recorded and shall
be in form and substance satisfactory to Foothill and its counsel. 

6.  Waiver.  Foothill shall waive all of the Events of Default existing as of the date hereof and listed on  Exhibit B hereto. 

7.  Miscellaneous.  

    (a) Upon
the effectiveness of this Amendment, each reference in the Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like import referring to
the Agreement shall mean and refer to the Agreement as amended by this Amendment. 

    (b) Upon
the effectiveness of this Amendment, each reference in the Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or words of like import
referring to the Agreement shall mean and refer to the Agreement as amended by this Amendment. 

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

    (d) This
Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original,
and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery
of a manually executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver a manually executed counterpart of this
Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment. 

[Remainder
of page left intentionally blank] 

3

 

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

	 	 	NETWORK COMPUTING DEVICES, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
FOOTHILL CAPITAL CORPORATION,

a California corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

4

 
 
 

Exhibit A    
  

REAFFIRMATION AND CONSENT  

    All capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in that certain Amendment Number Three to Loan and
Security Agreement, dated as of May  , 2001 (the "Amendment"). The undersigned hereby (a) represents and warrants to Foothill that the execution, delivery, and performance of
this Reaffirmation and Consent are within its corporate powers, have been duly authorized by all necessary corporate action, and are not in contravention of any law, rule, or regulation, or any order,
judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental authority, or of the terms of its charter or bylaws, or of any contract or undertaking to which it is a party or
by which any of its properties may be bound or affected; (b) consents to the amendment of the Agreement by the Amendment and to the transactions described therein; (c) acknowledges and
reaffirms its obligations owing to Foothill under the Guaranty and any other Loan Documents to which it is a party; and (d) agrees that each of the Guaranty and any other Loan Documents to
which it is a party is and shall remain in full force and effect. Although the undersigned has been informed of the matters set forth herein and has acknowledged and agreed to same, it understands
that Foothill has no obligations to inform it of such matters in the future or to seek its acknowledgement or agreement to future amendments, and nothing herein shall create such a duty. Delivery of
an executed counterpart of this Reaffirmation and Consent by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Reaffirmation and Consent. Any party
delivering an executed counterpart of this Reaffirmation and Consent by telefacsimile also shall deliver an original executed counterpart of this Reaffirmation and Consent but the failure to deliver
an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed by the laws of
the State of California. 

	 	 	AUSTRALIA, NETWORK COMPUTING

DEVICES (BENELUX) B.V., a company

organized under the laws of The Netherlands
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES

(CANADA), INC., a corporation organized under

the laws of Canada
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

5

 

	

 	
 	
NETWORK COMPUTING DEVICES

(FRANCE) S.A.R.L., a company organized

under the laws of France
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES, GMBH, a company organized under the laws of Germany
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NCD GRAPHIC SOFTWARE CORPORATION, an Oregon corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES (FSC), INC., a Guam corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NCD ACQUISITION CORP., an Indiana corporation
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

	

 	
 	
NETWORK COMPUTING DEVICES (UK),

LTD., a company organized under the laws of England
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

6

 

	

 	
 	
NETWORK COMPUTING DEVICES SCANDINAVIA AB, a company organized under the laws of Sweden
	

 	
 	

By:	
 	

	 	 	Name:	 	

	 	 	Title:	 	

7

 
 
 

EXHIBIT B    
  

Waivers  

    Foothill waives the following Events of Default: 

    (1)  Section 8.1:  Borrower has failed to remit Collections in the amount of $127,640 in
February 2001 and $220,455 in March 2001 in violation of Section 2.7 of the Agreement. Borrower has failed to remit Collections in
the months of April and May 2001 as well, however these amounts have not yet been quantified. This failure is also in violation of  Section 2.7 of the Agreement. 

    The
item identified in paragraph (1) above also constitutes an Event of Default under Section 8.3 of the Agreement. 

8

QuickLinks

AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT

Exhibit A

EXHIBIT B

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