Document:

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                                                                   EXHIBIT 10.10

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                                PLACEWARE, INC

                          LOAN AND SECURITY AGREEMENT

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     This LOAN AND SECURITY AGREEMENT is entered into as of March 11, 1999, by
and between SILICON VALLEY BANK ("Bank") and PLACEWARE, INC. ("Borrower").

                                   RECITALS
                                   --------

     Borrower wishes to obtain credit from time to time from Bank, and Bank
desires to extend credit to Borrower. This Agreement sets forth the terms on
which Bank will advance credit to Borrower and Borrower will repay the amounts
owing to Bank.

                                   AGREEMENT
                                   ---------

     The parties agree as follows:

     1.   DEFINITIONS AND CONSTRUCTION
          ----------------------------

          1.1  Definitions. As used in this Agreement, the following terms shall
               -----------
have the following definitions:

               "Accounts" means all presently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods (including, without limitation, the
licensing of software and other technology) or the rendering of services by
Borrower, whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

               "Advance" or "Advances" means a cash advance under the Revolving
Facility.

               "Affiliate" means, with respect to any Person, any Person that
owns or controls directly or indirectly such Person, any Person that controls or
is controlled by or is under common control with such Person, and each of such
Person's senior executive officers, directors, and partners.

               "Bank Expenses" means all costs or expenses (including reasonable
attorneys' fees and expenses) incurred in connection with the preparation,
negotiation, administration, and enforcement of the Loan Documents; reasonable
Collateral audit fees; and Bank's reasonable attorneys' fees and expenses
incurred in amending, enforcing or defending the Loan Documents (including fees
and expenses of appeal), incurred before, during and after an Insolvency
Proceeding, whether or not suit is brought.

               "Borrower's Books" means all of Borrower's books and records
including; ledgers; records concerning Borrower's assets or liabilities, the
Collateral, business operations or financial condition; and all computer
programs, or tape files, and the equipment, containing such information.

               "Borrowing Base" means an amount equal to seventy-five percent
(75%) of Eligible Accounts, as determined by Bank with reference to the most
recent Borrowing Base Certificate delivered by Borrower.

               "Business Day" means any day that is not a Saturday, Sunday, or
other day on which banks in the State of California are authorized or required
to close.

               "Closing Date" means the date of this Agreement.

               "Code" means the California Uniform Commercial Code.

               "Collateral" means the property described on Exhibit A attached
                                                            ---------
hereto.

               "Committed Revolving Line" means a credit extension of up to
Seven Hundred Fifty Thousand Dollars ($750,000).

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               "Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to (i) any indebtedness, lease, dividend, letter of credit or other
obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable; (ii) any obligations with respect to undrawn
letters of credit issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term "Contingent Obligation" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.

               "Copyrights" means any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held.

               "Credit Extension" means each Advance, letter of credit, or any
other extension of credit by Bank for the benefit of Borrower hereunder.

               "Daily Balance" means the amount of the Obligations owed at the
end of a given day.

               "Eligible Accounts" means those Accounts that arise in the
ordinary course of Borrower's business that comply with all of Borrower's
representations and warranties to Bank set forth in Section 5.4; provided, that
                                                                 --------
standards of eligibility may be fixed and revised from time to time by Bank as a
consequence of any Collateral audits done pursuant to Section 6.3 in Bank's
reasonable judgement and upon notification thereof to Borrower in accordance
with the provisions hereof. Unless otherwise agreed to by Bank, Eligible
Accounts shall not include the following:

               (a)  Accounts that the account debtor has failed to pay within
ninety (90) days of invoice date;

               (b)  Accounts with respect to an account debtor, fifty percent
(50%) of whose Accounts the account debtor has failed to pay within ninety (90)
days of invoice date;

               (c)  Accounts with respect to which the account debtor is an
officer, employee, or agent of Borrower;

               (d)  Accounts with respect to which goods are placed on
consignment, guaranteed sale, sale or return, sale on approval, bill and hold,
or other terms by reason of which the payment by the account debtor may be
conditional;

               (e)  Accounts with respect to which the account debtor is an
Affiliate of Borrower;

               (f)  Accounts with respect to which the account debtor does not
have its principal place of business in the United States;

               (g)  Accounts with respect to which the account debtor is the
United States or any department, agency, or instrumentality of the United
States;

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               (h)  Accounts with respect to which Borrower is liable to the
account debtor for goods sold or services rendered by the account debtor to
Borrower, but only to the extent of any amounts owing to the account debtor
against amounts owed to Borrower;

               (i)  Accounts with respect to an account debtor, including
Subsidiaries and Affiliates, whose total obligations to Borrower exceed twenty-
five percent (25%) of all Accounts, to the extent such obligations exceed the
aforementioned percentage, except as approved in writing by Bank;

               (j)  Accounts with respect to which the account debtor disputes
liability or makes any claim with respect thereto as to which Bank believes, in
its sole discretion, that there may be a basis for dispute (but only to the
extent of the amount subject to such dispute or claim), or is subject to any
Insolvency Proceeding, or becomes insolvent, or goes out of business; and

               (k)  Accounts the collection of which Bank reasonably determines
to be doubtful.

               "Equipment" means all present and future machinery, equipment,
tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.

               "Equity Event" means the receipt by Borrower of the proceeds from
the sale or issuance of equity securities in excess of Four Million Dollars
($4,000,000) pursuant to Borrower's Series C round of financing.

               "ERISA" means the Employee Retirement Income Security Act of
1974, as amended and the regulations thereunder.

               "Event of Default" has the meaning assigned in Article 8.

               "Foreign Exchange Reserve" has the meaning set forth in Section
2.1.3 herein.

               "GAAP" means generally accepted accounting principles as in
effect from time to time.

               "Indebtedness" means (a) all indebtedness for borrowed money or
the deferred purchase price of property or services, including without
limitation reimbursement and other obligations with respect to surety bonds and
letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.

               "Insolvency Proceeding" means any proceeding commenced by or
against any person or entity under any provision of the United States Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement or other relief.

               "Intellectual Property" means:

               (l)  Copyrights, Trademarks and Patents;

               (m)  Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;

               (n)  Any and all design rights which may be available to Borrower
now or hereafter existing, created, acquired or held;

               (o)  Any and all claims for damages by way of past, present and
future infringement of any of the rights included above, with the right but not
the obligation, to sue for and collect such damages for said use or infringement
of the intellectual property rights identified above;

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               (p)  All licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such use
to the extent permitted by such license or rights;

               (q)  All amendments, renewals and extensions of any of the
Copyrights, Trademarks or Patents; and

               (r)  All proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.

               "Inventory" means all present and future inventory in which
Borrower has any interest, including merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and finished products
intended for sale or lease or to be furnished under a contract of service, of
every kind and description now or at any time hereafter owned by or in the
custody or possession, actual or constructive, of Borrower, including such
inventory as is temporarily out of its custody or possession or in transit and
including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any
documents of title representing any of the above, and Borrower's Books relating
to any of the foregoing.

               "Investment" means any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.

               "IRC" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.

               "Lead Investor Term Sheet" means a term sheet evidencing the
intention of an investor in Borrower to lead the next equity round of financing
in form and substance satisfactory to Bank.

               "Letter of Credit" or "Letters of Credit" has the meaning set
forth in Section 2.1.2 herein.

               "Lien" means any mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance.

               "Loan Documents" means, collectively, this Agreement, any note or
notes executed by Borrower, and any other agreement entered into between
Borrower and Bank in connection with this Agreement, all as amended or extended
from time to time.

               "Material Adverse Effect" means a material adverse effect on (i)
the business operations or condition (financial or otherwise) of Borrower and
its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents.

               "Negotiable Collateral" means all of Borrower's present and
future letters of credit of which it is a beneficiary, notes, drafts,
instruments, securities, documents of title, and chattel paper, and Borrower's
Books relating to any of the foregoing.

               "Obligations" means all debt, principal, interest, Bank Expenses
and other amounts owed to Bank by Borrower pursuant to this Agreement or any
other agreement, whether absolute or contingent, due or to become due, now
existing or hereafter arising, including any interest that accrues after the
commencement of an Insolvency Proceeding and including any debt, liability, or
obligation owing from Borrower to others that Bank may have obtained by
assignment or otherwise.

               "Patents" means all patents, patent applications and like
protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same.

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               "Periodic Payments" means all installments or similar recurring
payments that Borrower may now or hereafter become obligated to pay to Bank
pursuant to the terms and provisions of any instrument, or agreement now or
hereafter in existence between Borrower and Bank.

               "Permitted Indebtedness" means:

               (a)  Indebtedness of Borrower in favor of Bank arising under this
Agreement or any other Loan Document;

               (b)  Indebtedness existing on the Closing Date and disclosed in
the Schedule;

               (c)  Indebtedness secured by a lien described in clause (c) of
the defined term "Permitted Liens," provided such Indebtedness does not exceed
that lesser of the cost or fair market value of the equipment financed with such
Indebtedness; and

               (d)  Subordinated Debt.

               "Permitted Investment" means;

               (a)  Investments existing on the Closing Date disclosed in the
Schedule; and

               (b)  (i)  marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency or any State thereof
maturing within on (1) year from the date of acquisition thereof, (ii)
commercial paper maturing no more than one (1) year from the date of creation
thereof and currently having the highest rating obtainable from either Standard
& Poor's Corporation or Moody's Investors Service, Inc., (iii) certificates of
deposit maturing no more than one (1) year from the date of investment therein
issued by Bank, and (iv) Bank's money market accounts.

               "Permitted Liens" means the following:

               (a)  Any Liens existing on the Closing Date and disclosed in the
Schedule or arising under this Agreement or the other Loan Documents;

               (b)  Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings, provided the same have no priority over any of Bank's
                         --------
security interests;

               (c)  Liens (i) upon or in any equipment, acquired or held by
Borrower or any of its Subsidiaries to secure the purchase price of such
equipment or indebtedness incurred solely for the purpose of financing the
acquisition of such equipment in the ordinary course of business, or (ii)
existing on such equipment at the time of its acquisition in the ordinary course
of business, provided that the Lien is confined solely to the property so
             --------
acquired and improvements thereon, and the proceeds of such equipment; and

               (d)  Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in
clauses (a) through (c) above, provided that any extension, renewal or
                               ---------
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the indebtedness being extended, renewed or
refinanced does not increase.

               "Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.

               "Prime Rate" means the variable rate of interest, per annum, most
recently announced by Bank, as its "prime rate," whether or not such announced
rate is the lowest rate available from Bank.

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               "Responsible Officer" means each of the Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer and the Controller of
Borrower.

               "Revolving Facility" means the facility under which Borrower may
request Bank to issue cash advances, as specified in Section 2.1 hereof.

               "Revolving Maturity Date" means March 10, 2000.

               "Revolving Facility" means the facility under which Borrower may
request Bank to issue Advances, as specified in Section 2.1.1 hereof.

               "Schedule" means the schedule of exceptions, attached hereto, if
any.

               "Subordinated Debt" means any debt incurred by Borrower that is
subordinated to the debt owing by Borrower to Bank on terms reasonably
acceptable to Bank (and identified as being such by Borrower and Bank).

               "Subsidiary" means any corporation or partnership in which (i)
any general partnership interest or (ii) more than 50% of the stock of which by
the terms thereof ordinary voting power to elect the Board of Directors,
managers or trustees of the entity shall, at the time as of which any
                                   -----
determination is being made, be owned by Borrower, either directly or through an
Affiliate.

               "Trademark" means any trademark and servicemark rights, whether
registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of Borrower connected
with and symbolized by such trademarks.

          1.2  Accounting Terms. All accounting terms not specifically defined
               ----------------
herein shall be construed in accordance with GAAP and all calculations made
hereunder shall be made in accordance with GAAP. When used herein, the terms
"financial statements" shall include the notes and schedules thereto.

     2.   LOAN AND TERMS OF PAYMENT
          -------------------------

          2.1  Credit Extensions. Borrower promises to pay to the order of Bank
               -----------------
in lawful money of the United States of America, the aggregate unpaid principal
amount of all Credit Extensions made by Bank to Borrower hereunder. Borrower
shall also pay interest on the unpaid principal amount of such Credit Extensions
at rates in accordance with the terms hereof.

               2.1.1  Revolving Advances.
                      ------------------

               (a)    Subject to and upon the terms and conditions of this
Agreement, Borrower may request Advances in an aggregate outstanding amount not
to exceed the lesser of the Committed Revolving Line or the Borrowing Base,
minus the sum of (a) the face amount of all outstanding Letters of Credit
-----
(including drawn but unreimbursed Letter of Credit), and (b) Foreign Exchange
Reserve. Subject to the terms and conditions of this Agreement, amounts borrowed
pursuant to this Section 2.1.1 may be repaid and reborrowed at any time prior to
the Revolving Maturity Date, at which time all Advances under this Section 2.1.1
shall be immediately due and payable. Borrower may prepay any advances without
penalty or premium.

               (b)    Procedures. Whenever Borrower desires an Advance, Borrower
                      ----------
will notify Bank by facsimile transmission or telephone no later than 3:00 p.m.
California time, on the Business Day that the Advance is to be made. Each such
notification shall be promptly confirmed by a Payment/Advance Form in
substantially the form of Exhibit B hereto. Bank is authorized to make Advances
                          ---------
under this Agreement, based upon instructions received from a Responsible
Officer or a designee of a Responsible Officer, or without instructions if in
Bank's discretion such Advances are necessary to meet Obligations which have
become due and remain unpaid. Bank shall be entitled to rely on any telephonic
notice given by a person who Bank reasonably believes to be a Responsible
Officer or a designee thereof, and Borrower shall indemnify and hold Bank
harmless for any damages

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or loss suffered by Bank as a result of such reliance. Bank will credit the
amount of Advances made under this Section 2.1.1 to Borrower's deposit account.

               2.1.2  Letters of Credit.
                      -----------------

                      (a) Subject to the terms and conditions of this Agreement,
Bank agrees to issue or cause to be issued letters of credit (each a "Letter of
Credit," collectively, the "Letters of Credit") for the account of Borrower in
an aggregate outstanding face amount not to exceed (i) the lesser of Five
Hundred Thousand Dollars ($500,000) or the Borrowing Base, minus (ii) the
                                                           -----
Foreign Exchange Reserve, provided that in no event shall the face amount of
                          --------
outstanding Letters of Credit plus the Foreign Exchange Reserve plus the
aggregate amount of outstanding Advances exceed either (i) the Committed
revolving Line or (ii) the Borrowing Base. Each Letter of Credit shall have an
expiry date no later than the Revolving Maturity Date. All Letters of Credit
shall be in form and substance, acceptable to Bank in its sole discretion and
shall be subject to the terms and conditions of Bank's form of standard
application and letter of credit agreement.

                      (b) The obligation of Borrower to immediately reimburse
Bank for drawings made under Letters of Credit shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement and such Letters of Credit, under all circumstances whatsoever.
Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss,
cost, expense or liability, including, without limitation, reasonable attorneys'
fees, arising out of or in connection with any Letters of Credit.

                      (c) Borrower may request that Bank issue a Letter of
Credit payable in a currency other than United States Dollars. If a demand for
payment is made under any such Letter of Credit, Bank shall treat such demand as
an Advance to Borrower of the equivalent of the amount thereof (plus cable
charges) in United States currency at the then prevailing rate of exchange in
San Francisco, California, for sales of that other currency for cable transfer
to the country of which it is the currency.

                      (d) Upon the issuance of any letter of credit payable in a
currency other than United States Dollars, Bank shall create a reserve under the
Committed Line for letters of credit against fluctuations in currency exchange
rates, in an amount equal to ten percent (10%) of the face amount of such letter
of credit. The amount of such reserve may be amended by Bank from time to time
account for fluctuations in the exchange rate. The availability of funds under
the Committed Line shall be reduced by the amount of such reserve for so long as
such letter of credit remains outstanding.

               2.1.3  Foreign Exchange Contract; Foreign Exchange Settlements.
                      -------------------------------------------------------

                      (a) Subject to the terms of this Agreement, Borrower may
enter into foreign exchange contracts (the "Exchange Contracts") not to exceed
an aggregate amount of (i) the lesser of Five Hundred Thousand Dollars
($500,000) or the Borrowing Base, minus (ii) the face amount of outstanding
                                  -----
Letters of Credit (the "Contract Limit"), provided that in no event shall the
                                          --------
fact amount of outstanding Letters of Credit plus the Foreign Exchange Reserve
plus the aggregate amount of outstanding Advances exceed either (i) the
Committed Revolving Line or (ii) the Borrowing Base, pursuant to which Bank
shall sell to or purchase from Borrower foreign currency on a spot or future
basis. Borrower shall not request any Exchange Contracts at any time it is out
of compliance with any of the provisions of this Agreement. All Exchange
Contracts must provide for delivery of settlement on or before the Revolving
Maturity Date. The amount available under the Committed Line at any time shall
be reduced by the following amounts (the "Foreign Exchange Reserve") on any
given day (the "Determination Date"): (i) on all outstanding Exchange Contracts
on which delivery is to be effected or settlement allowed more than two business
days after the Determination Date, ten percent (10%) of the gross amount of the
Exchange Contracts; plus (ii) on all outstanding Exchange Contracts on which
delivery is to be effected or settlement allowed within two (2) business days
after the Determination Date, one hundred percent (100%) of the gross amount of
the Exchange Contracts.

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                    (b) Bank may, in its discretion, terminate the Exchange
Contracts at any time (i) that an Event of Default occurs or (ii) that there is
no sufficient availability under the Committed Line and Borrower does not have
available funds in its bank account to satisfy the Foreign Exchange Reserve. If
Bank terminates the Exchange Contracts, and without limitation of any applicable
indemnities. Borrower agrees to reimburse Bank for reasonable fees, costs and
expenses relating thereto to arising in connection therewith.

                    (c) Borrower shall not permit the total gross amount of all
Exchange Contracts on which delivery is to be effected and settlement allowed in
any two (2) business day period to be more than (i) the lesser of the Committed
Line or the Borrowing Base, minus (ii) the then outstanding principal balance of
                            -----
the Advances (including drawn but unreimbursed Letters of Credit), minus (iii)
                                                                   -----
the Foreign Exchange Reserve (the "Settlement Limit"), nor shall Borrower permit
the total gross amount of all Exchange Contracts to which Borrower is a party,
outstanding at any one time, to exceed the Contract Limit. Notwithstanding the
above, however, the amount which may be settled in any two (2) business day
period may be increased above the Settlement Limit up to, but in no event to
exceed, the amount of the Contract Limit under either of the following
circumstances:

                        (i)  if there is sufficient availability under the
Committed Line in the amount of the Foreign Exchange Reserve as of each
Determination Date, provided that Bank in advance shall reserve the full amount
of the Foreign Exchange Foreign Reserve against the Committed Line; or

                        (ii) if there is insufficient availability under the
committed Line, as to settlements within any two (2) business day period,
provided that Bank, in its sole discretion, may: (A) verify good funds overseas
prior to crediting Borrower's deposit account with Bank (in the case of
Borrower's sale of foreign currency); or (B) debit Borrower's deposit account
with Bank prior to delivering foreign currency overseas (in the case of
Borrower's purchase of foreign currency).

                    (d) In the case of Borrower's purchase of foreign currency,
Borrower in advance shall instruct Bank upon settlement either to treat the
settlement amount as an advance under the Committed Line, or to debit Borrower's
account for the amount settled.

                    (e) Borrower shall execute all standard form applications
and agreements of Bank in connection with the Exchange Contracts and, without
limiting any of the terms of such applications and agreements, Borrower will pay
all standard fees and charges of Bank in connection with the Exchange Contracts.

                    (f) Without limiting any of the other terms of this
Agreement of any such standard form applications and agreement of Bank,
Borrower agrees to indemnify Bank and hold it harmless, from and against any and
all claims, debts, liabilities, demands, obligations, actions, costs and
expenses (including, without limitation, attorney's fees of counsel of Bank's
choice), of every nature and description which it may sustain or incur, based
upon, arising out of, or in any way relating to any of the Exchange Contracts or
any transactions relating thereto or contemplated thereby.

          2.2  Overadvances. If, at any time or for any reason, the amount of
               ------------
Obligations owed by Borrower to Bank pursuant to Section 2.1 of this Agreement
is greater than the lesser (i) the Committed Line or (ii) the Borrowing Base,
Borrower shall immediately pay to Bank, in cash, the amount of such excess.

          2.3  Interest Rates, Payments, and Calculations.

               (a)  Interest Rates.
                    --------------

                    (i) Advances. Except as set forth in Section 2.3(b), the
                        --------
Advances shall bear interest, on the outstanding daily balance thereof, at a
rate equal to One Percent (1.0%) above the Prime Rate.

               (b)  Late Fee: Default Rate. If any payment is not made within
                    -----------------------
ten (10) days after the date such payment is due, Borrower shall pay Bank a late
fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid
amount or (ii) the maximum amount permitted to be charged under applicable law.
All

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Obligations shall bear interest, from and after the occurrence and during the
continuance of an Event of Default, at a rate equal to five (5) percentage
points above the interest rate applicable immediately prior to the occurrence of
the Event of Default.

               (c) Payments. Interest hereunder shall be due and payable on the
                   --------
tenth (10th) calendar day of each month during the term hereof. Borrower hereby
authorizes Bank to debit any accounts with Bank, including, without limitation,
Account Number ____________ for payments of principal and interest due on the
Obligations and any other amounts owing by Borrower to Bank. Bank will notify
Borrower of all debits which Bank has made against Borrower's accounts. Bank
shall, at its option, charge such interest, all Bank Expenses, and all Periodic
Payments against any of Borrower's deposit accounts or against the Committed
Revolving Line, in which case those amounts shall thereafter accrue interest at
the rate then applicable hereunder. Any interest not paid when due shall be
compounded by becoming a part of the Obligations, and such interest shall
thereafter accrue interest at the rate then applicable hereunder. Bank shall
deliver to Borrower statements of account in the ordinary course of business
reflecting charges made hereunder.

               (d) Computation. In the event the Prime Rate is changed from time
                   -----------
to time hereafter, the applicable rate of interest hereunder shall be increased
or decreased effective as of 12:01 a.m. on the day the Prime Rate is changed, by
an amount equal to such change in the Prime Rate. All interest chargeable under
the Loan Documents shall be computed on the basis of a three hundred sixty (360)
day year for the actual number of days elapsed.

          2.4  Crediting Payments. Prior to the occurrence of an Event of
               ------------------
Default, Bank shall credit a wire transfer of funds, check or other item of
payment to such deposit account of Obligation as Borrower specifies. After the
occurrence of an Event of Default, the receipt by Bank of any wire transfer of
funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on
account unless such payment is of immediately available federal funds or unless
and until such check or other item of payment is honored when presented for
payment. Notwithstanding anything to the contrary contained herein, any wire
transfer or payment received by Bank after 12:00 noon California time shall be
deemed to have been received by Bank as of the opening of business on the
immediately following Business Day. Whenever any payment to Bank under the Loan
Documents would otherwise be due (except by reason of acceleration) on a date
that is not a Business Day, such payment shall instead be due on the next
Business Day, and additional fees or interest, as the case may be, shall accrue
and be payable for the period of such extension.

          2.5  Fees. Borrower shall pay to Bank the following:
               ----

               (a) Facility Fee. A facility fee equal to Three Thousand Seven
                   ------------
Hundred Fifty Dollars ($3,750), which fee shall be due on the Closing Date and
shall be fully earned and non-refundable.

               (b) Financial Examination and Appraisal Fees. Bank's customary
                   ----------------------------------------
fees and out-of-pocket expenses for Bank's audits of Borrower's Accounts, and
for each appraisal of Collateral, provided that the cost of the initial audit
shall not exceed One Thousand Five Hundred Dollars ($1,500), and financial
analysis and examination of Borrower performed from time to time by Bank or its
agents;

               (c) Bank Expenses. Upon the date hereof, all Bank Expenses
                   -------------
incurred through the Closing Date, including reasonable attorneys' fees and
expenses, and, after the date hereof, all Bank Expenses, including reasonable
attorney's fees and expenses, as and when they become due.

          2.6  Additional Costs. In case any change in any law, regulation,
               ----------------
treaty or official directive or the interpretation or application thereof by any
court or any governmental authority charged with the administration thereof or
the compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law), in each case
after the date of this Agreement.

               (a) subjects Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by Borrower or
otherwise with respect to the transactions contemplated hereby

                                       9
<PAGE>

(except for taxes on the overall net income of Bank imposed by the United States
of America or any political subdivision thereof);

               (b) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by, or
deposits in or for the account of, or loans by, Bank; or

               (c) imposes upon Bank any other condition with respect to its
performance under this Agreement,

and the result of any of the foregoing is to increase the cost to Bank, reduce
the income receivable by Bank or impose any expense upon Bank with respect to
any loans, Bank shall notify Borrower thereof. Borrower agrees to pay to Bank
the amount of such increase in cost, reduction in income or additional expense
as and when such cost, reduction or expense is incurred or determined, upon
presentation by Bank of a statement of the amount and setting forth Bank's
calculation thereof, all in reasonable detail, which statement shall be deemed
true and correct absent manifest error.

          2.7  Term. This Agreement shall become effective on the Closing Date
               ----
and, subject to Section 12.7, shall continue in full force and effect for a term
ending on the Revolving Maturity Date. Notwithstanding the foregoing, Bank shall
have the right to terminate its obligation to make Credit Extensions under this
Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default. Notwithstanding termination, Bank's Lien on
the Collateral shall remain in effect for so long as any Obligations are
outstanding.

     3.   CONDITIONS OF LOANS.
          -------------------

          3.1  Conditions Precedent to Initial Credit Extension. The obligation
               ------------------------------------------------
of Bank to make the initial Credit Extension is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:

               (a) this Agreement;

               (b) a certificate of the Secretary of Borrower with respect to
incumbency and resolutions authorizing the execution and delivery of this
Agreement;

               (c) a financing statement (Form UCC-1);

               (d) a warrant to purchase stock;

               (e) a negative pledge agreement;

               (f) an audit of the collateral, the results of which shall be
satisfactory to Bank;

               (g) an insurance certificate;

               (h) evidence in form and substance satisfactory to Bank of due
diligence discussions between Borrower and venture capital investors approved by
Bank regarding their investment in Borrower;

               (i) payment of the fees and Bank Expenses then due specified in
Section 2.6 hereof; and

               (j) such other documents, and completion of such other matters,
as Bank may reasonably deem necessary or appropriate.

                                      10
<PAGE>

          3.2  Conditions Precedent to all Credit Extensions. The obligation of
               ---------------------------------------------
Bank to make each Credit Extension, including the initial Credit Extension, is
further subject to the following conditions:

               (a) timely receipt by Bank of the Payment/Advance Form as
provided in Section 2.1;

               (b) timely receipt by Bank of the invoices or other documents as
provided in Section 2.2; and

               (c) the representations and warranties contained in Section 5
shall be true and correct in all material respects on and as of the date of such
Payment/Advance Form and on the effective date of each Credit Extension as
though made at and as of each such date, and no Event of Default shall have
occurred and be continuing, or would result from such Credit Extension
(provided, however, that those representations and warranties expressly
referring to another date shall be true, correct and complete in all material
respects as of such date). The making of each Credit Extension shall be deemed
to be a representation and warranty by Borrower on the date of such Credit
Extension as to the accuracy of the facts refereed to in this Section 3.2(c).

     4.   CREATION OF SECURITY INTEREST
          -----------------------------

          4.1  Grant of Security Interest. Borrower grants and pledges to Bank a
               --------------------------
continuing security interest in all presently existing and hereafter acquired or
arising Collateral in order to secure prompt repayment of any and all
Obligations and in order to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. Except as set forth in the
Schedule, such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a valid,
first priority security interest in Collateral acquired after the date hereof.
Borrower also hereby agrees not to sell, transfer, assign, mortgage, pledge,
lease, grant a security interest in, or encumber any of its intellectual
property as detailed in that certain Negative Pledge Agreement between Bank and
Borrower dated as of March 11, 1999.

          4.2  Delivery of Additional Documentation Required. Borrower shall
               ---------------------------------------------
from time to time execute and deliver to Bank, at the request of Bank, all
Negotiable Collateral, all financing statements and other documents that Bank
may reasonably request, inform satisfactory to Bank, to perfect and continue
perfected Bank's security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.

          4.3  Right to Inspect. Bank (through any of its officers, employees,
               ----------------
or agents) shall have the right upon reasonable prior notice, from time to time
during Borrower's usual business hours but no more than once a year (unless) an
Event of Default has occurred and is continuing) to inspect Borrower's Books and
to make copies thereof and to check, test, and appraise the Collateral in order
to verify Borrower's financial condition or the amount, condition of, or any
other matter relating to, the Collateral.

     5.   REPRESENTATIONS AND WARRANTIES
          ------------------------------

          Borrower represents and warrants as follows:

          5.1  Due Organization and Qualification. Borrower and each Subsidiary
               ----------------------------------
is a corporation duly existing and in good standing under the laws of its state
of incorporation and qualified and licensed to do business in, and is in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be so qualified.

          5.2  Due Authorization; No Conflict. The execution, delivery, and
               ------------------------------
performance of the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Articles of Incorporation or Bylaws, nor will
they constitute an event of default under any material agreement to which
Borrower is party or by which Borrower is bound.

                                      11
<PAGE>

Borrower is not in default under any agreement to which it is a party or by
which it is bound, which default could have a Material Adverse Effect.

          5.3  No Prior Encumbrances. Borrower has good and indefeasible title
               ---------------------
to the Collateral, free and clear of Liens, except for Permitted Liens.

          5.4  Bona Fide Eligible Accounts. The Eligible Accounts are bona fide
               ---------------------------
existing obligations. The property giving rise to such Eligible Accounts has
been delivered to the account debtor or to the account debtor's agent for
immediate shipment to and unconditional acceptance by the account debtor.
Borrower has not received notice of actual or imminent Insolvency Proceeding of
any account debtor that is included in any Borrowing Base Certificate as and
Eligible Account.

          5.5  Merchantable Inventory. All Inventory is in all material respects
               ----------------------
of good and marketable quality, free form all material defects.

          5.6  Name; Location of Chief Executive Office. Except as disclosed in
               ----------------------------------------
the Schedule, Borrower has not done business under any name other than that
specified on the signature page hereof. The chief executive office of Borrowers
is located at the address indicated in Section 10 hereof.

          5.7  Litigation. Except as set forth in the Schedule, there are no
               ----------
actions or proceedings pending by or against Borrower or any Subsidiary, before
any court or administrative agency in which an adverse decision could have a
Material Adverse Effect or a material adverse effect on Borrower or such
Subsidiary or Borrower's interest or Bank's security interest in the collateral.
Borrower does not have knowledge of any such pending or threatened actions or
proceedings.

          5.8  No Material Adverse Change in Financial Statements. All
               --------------------------------------------------
consolidated financial statements related to Borrower or any Subsidiary that
have been delivered by Borrower to Bank fairly present in all material respects
Borrower's or such Subsidiary's consolidated financial condition as of the date
thereof and Borrower's or such Subsidiary's consolidated results of operations
for the period then ended. There has not been a material adverse change in the
consolidated financial condition of Borrower or Subsidiary since the date of the
most recent of such financial statements submitted to Bank.

          5.9  Solvency. The fair saleable value of Borrower's assets (including
               --------
goodwill minus disposition costs) exceeds the fair value of its liabilities;
Borrower is not left with unreasonably small capital after the transactions
contemplated by this Agreement; and Borrower is able to pay its debts (including
trade debts) as they mature.

          5.10 Regulatory Compliance. Borrower and each Subsidiary have met the
               ---------------------
minimum funding requirement of ERISA with respect to any employee benefit plans
subject to ERISA. No event has occurred resulting from Borrower's failure to
comply with ERISA that is reasonably likely to result in Borrower's incurring
any liability that could have a Material Adverse Effect. Borrower is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940. Borrower is not engaged
principally, or as one of the important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T and U of the Board of Governors of the Federal
Reserve System). Borrower has complied with all the provisions of the Federal
Fair Labor Standard Act. Borrower has not violated any statutes, laws,
ordinances or rules applicable to it, violation of which could have a Material
Adverse Effect.

          5.11 Environmental Condition. None of Borrower's or any Subsidiary's
               -----------------------
properties or assets has ever been used by Borrower or any Subsidiary or, to the
bet of Borrower's knowledge, by previous owners or operators, in the disposal
of, or to produce, store, handle, treat, release, or transport, any hazardous
waste or hazardous substance other than in accordance with applicable law; to
the best of Borrower's knowledge, none of Borrower's properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a hazardous waste or hazardous substance disposal site, or
a candidate for closure pursuant to

                                      12
<PAGE>

any environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste
or hazardous substances into the environment.

          5.12  Taxes. Borrower and each Subsidiary have filed or cause to be
                -----
filed all tax returns required to be filed, and has paid, or has make adequate
provision for the payment of, all taxes reflected therein.

          5.13  Subsidiaries. Borrower does not own any stock, partnership
                ------------
interest or other equity securities of any Person, except for Permitted
Investments.

          5.14  Government Consents. Borrower and each Subsidiary have obtained
                -------------------
all consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower's or such Subsidiary's business as
currently conducted, the failure to obtain which could have a Material Adverse
Effect.

          5.15  Full Disclosure. No representation, warranty or other statement
                ---------------
made by Borrower in any certificate or written statement furnished to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained in such certificates or
statements not misleading.

     6.   AFFIRMATIVE COVENANTS
          ---------------------

          Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long Bank may have any commitment to make a
Credit Extension hereunder. Borrower shall do all of the following:

          6.1   Good Standing. Borrower shall maintain its and each of its
                -------------
Subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain in force all
licenses, approvals and agreements, the loss of which could have a Material
Adverse Effect.

          6.2   Government Compliance. Borrower shall meet, and shall cause
                ---------------------
each Subsidiary to meet, the minimum funding requirements of ERISA with respect
to any employee benefit plans subject to ERISA. Borrower shall comply, and shall
cause each Subsidiary to comply, with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance with
which could have a Material Adverse Effect or a material adverse effect on the
Collateral or the priority of Bank's Lien on the Collateral.

          6.3   Financial Statements, Reports, Certificates. Borrower shall
                -------------------------------------------
deliver to Bank: (a) as soon as available, but in any event within thirty (30)
days after the end of each calendar month, a company prepared consolidated
balance sheet and income statement covering Borrower's consolidated operations
during such period, in a form acceptable to Bank and certified by a Responsible
Officer, (b) as soon as available, but in any event within two hundred and
twenty (220) days after the end of Borrower's fiscal year, audited consolidated
financial statements of Borrower prepared in accordance with GAAP, consistently
applied together with an unqualified opinion on such financial statements of an
independent certified public accounting firm reasonably acceptable to Bank; (c)
promptly upon receipt of notice thereof, a report of any legal actions pending
or threatened against Borrower or any Subsidiary that could result in damages or
costs to Borrower or any Subsidiary of Fifty Thousand Dollars ($50,000) or more;
and (d) such budgets, sales projections, operating plans or other financial
information as Bank may reasonably request from time to time generally prepared
by Borrower in the ordinary course of business.

     Within twenty (20) days after the last day of each month, Borrower shall
deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in
substantially the form of Exhibit C hereto, together with aged listings.
                          ---------

                                      13
<PAGE>

of accounts receivable and accounts payable. Notwithstanding the foregoing, if
outstanding Advances plus the face value of all outstanding Letters of Credit
plus the Foreign Exchange Reserve equals an amount greater than or equal to
fifty percent (50%) of the Borrowing Base, then within five (5) business days
after the fifteenth, (15th) and thirtieth (30th) days of each month, Borrower
shall deliver to Bank a Borrowing Base Certificate signed by a Responsible
Officer in substantially the form of Exhibit C hereto, together with aged
                                     ---------
listings of accounts receivable and accounts payable.

     Bank shall have a right from time to time hereafter to audit Borrower's
Account and appraise Collateral at Borrower's expense; provided that, such
audits will be conducted no more often than every six (6) months unless an Event
of Default has occurred and is continuing and that the cost of the initial audit
shall not exceed One Thousand Five Hundred Dollars ($1,500).

          6.4  Inventory: Returns. Borrower shall keep all Inventory in good and
               ------------------
marketable condition, free from all material defects. Returns and allowances, if
any, as between Borrower and its account debtors shall be on the same basis and
in accordance with the usual customary practices of Borrower, as they exist at
the time of the execution and delivery of this Agreement. Borrower shall
promptly notify Bank of all returns and recoveries and of all disputes and
claims, where the return, recovery, dispute or claim involves more than Fifty
Thousand Dollars ($50,000).

          6.5  Taxes. Borrower shall make, and shall cause each Subsidiary to
               -----
make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Bank, on demand, appropriate certificates attesting to
the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish Bank with proof
satisfactory to Bank indicating that Borrower or a Subsidiary has made such
payments or deposits; provided that Borrower or a Subsidiary need not make any
payment if the amount or validity of such payment is contested in good faith by
appropriate proceedings and is reserved against (to the extent required by GAAP)
by Borrower.

          6.6  Insurance.
               ---------

               (a) Borrower, at its expense, shall keep the Collateral insured
against loss or damage by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in such amounts, as ordinarily insured against by other
owners in similar businesses conducted in the locations where Borrower's
business is conducted on the date hereof. Borrower shall also maintain insurance
relating to Borrower's ownership and use of the Collateral in amounts and of a
type that are customary to businesses similar to Borrower's.

               (b) All such policies of insurance shall be in such form, with
such companies, and in such amounts as reasonably satisfactory to Bank. All
such policies of property insurance shall contain a lender's loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee thereof and all liability insurance policies shall show the Bank as an
additional insured, and shall specify that the insurer must give at least
twenty (20) days notice to Bank before canceling its policy for any reason. Upon
Bank's request, Borrower shall deliver to Bank certified copies of such policies
of insurance and evidence of the payments of all premiums therefor. All proceeds
payable under any such policy shall, at the option of Bank, be payable to Bank
for application to the Obligations.

          6.7  Principal Depository. Borrower shall maintain its principal
               --------------------
depository and operating accounts with Bank.

          6.8  Further Assurances. At any time and from time to time Borrower
               ------------------
shall execute and deliver such further instruments and take such further action
as may reasonably be requested by Bank to effect the purposes of this Agreement.

                                      14
<PAGE>

     7.   NEGATIVE COVENANTS
          ------------------

          Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until payment in full of the outstanding Obligations or
for so long as Bank may have any commitments to make any Credit Extensions,
Borrower will not do any of the following without the consent of Bank which will
not be unreasonably withheld:

          7.1  Dispositions. Convey, sell, lease, transfer or otherwise dispose
               ------------
of (collectively, a "Transfer"), or permit any of its Subsidiaries to Transfer,
all or any part of its business or property, including intellectual property,
other than: (i) Transfer of inventory in the ordinary course of business; (ii)
Transfers of non-exclusive licenses and similar arrangements for the use of the
property of Borrower or its Subsidiaries, or (iii) Transfers of surplus, worn-
out or obsolete Equipment.

          7.2  Change in Business. Engage in any business, or permit any of its
               ------------------
Subsidiaries to engage in any business, other than the businesses currently
engaged in by Borrower and any business substantially similar or related thereto
(or incidental thereto). Borrower will not, without thirty (30) days prior
written notification to Bank, relocate its chief executive office.

          7.3  Mergers or Acquisitions. Merge or consolidate, or permit any of
               -----------------------
its Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquired, all or
substantially all of the capital stock or property of another Person, without
the consent of Bank which shall not be unreasonably withheld.

          7.4  Indebtedness. Create, incur, assume or be or remain liable with
               ------------
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.

          7.5  Encumbrances. Create, incur, assume or suffer to exist any Lien
               ------------
with respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens.

          7.6  Distributions. Pay any dividends or make any other distribution
               -------------
or payment on account of or in redemption, retirement or purchase of any capital
stock.

          7.7  Investments. Directly or indirectly acquire or own, or make any
               -----------
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.

          7.8  Transactions with Affiliates. Directly or indirectly enter into
               ----------------------------
or permit to exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms that are no less favorable to Borrower than would
be obtained in an arm's length transaction with a nonaffiliated Person.

          7.9  Subordinated Debt. Make any payment in respect of any
               -----------------
Subordinated Debt, or permit any of its Subsidiaries to make any such payment,
except in compliance with the terms of such Subordinated Debt, or amend any
provision contained in any documentation relating to the Subordinated Debt
without Bank's prior written consent.

          7.10 Inventory. Store the Inventory with a bailee, warehouseman, or
               ---------
similar party, unless Bank has received a pledge of the warehouse receipt
covering such Inventory. Except for Inventory sold in the ordinary course of
business and except for such other locations as Bank may approve in writing.
Borrower shall keep the Inventory only at the location set forth in Section 10
hereof and such other locations of which Borrower gives Bank prior written
notice and as to which Borrower signs and files a financing statement when
needed to perfect Bank's security interest.

          7.11 Compliance. Become an "investment company" or be controlled by
               ----------
an "investment company," within the meaning of the Investment Company Act of
1940, or become principally engaged in, or

                                      15
<PAGE>

undertake as one of its important activities, the business of extending credit
for the purpose of purchasing or carrying margin stock, or use the proceeds of
any Credit Extension for such purpose. Fail to meet the minimum funding
requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as
defined in ERISA, to occur, fail to comply with the Federal Fair Labor Standards
Act or violate any law or regulation, which violation could have Material
Adverse Effect or a material adverse effect on the Collateral or the priority of
Bank's Lien on the collateral, or permit any of its Subsidiaries to do any of
the foregoing.

     8.   EVENTS OF DEFAULT
          -----------------

          Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement.

          8.1  Payment Default. If Borrower fails to pay, when due, any of the
               ---------------
Obligations;

          8.2  Covenant Default. If Borrower fails to perform any obligation
               ----------------
under Article 6, or violates any of the covenants contained in Article 7 of this
Agreement, or fails or neglects to perform, keep, or observe any other material
term, provision, condition, covenant, or agreement contained in this Agreement,
in any of the Loan Documents, or in any other present or future agreement
between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within ten (10) days after Borrower receives notice thereof or
any officer of Borrower becomes aware thereof; provided, however, that if the
default cannot by its nature be cured within the ten (10) day period or cannot
after diligent attempts by Borrower be cured within such ten (10) day period,
and such default is likely to be cured within a reasonable time, then Borrower
shall have an additional reasonable period (which shall not in any case exceed
thirty (30) days) to attempt to cure such default, and within such reasonable
time period the failure to have cured such default shall not be deemed an Event
of Default (provided that no Credit Extensions will be required to be made
during such cure period);

          8.3  Material Adverse Change. If there occurs a material adverse
               -----------------------
change in Borrower's business or financial condition, or if there is a material
impairment of the prospect of repayment of any portion of the Obligations or a
material impairment of the value or priority of Bank's security interests in
the Collateral;

          8.4  Attachment. If any material portion of Borrower's assets is
               ----------
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgement or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within ten (10) days
after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period);

          8.5  Insolvency. If Borrower becomes insolvent, or if an Insolvency
               ----------
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within thirty (30) days
(provided that no Credit Extensions will be made prior to the dismissal of such
Insolvency Proceeding);

          8.6  Other Agreements. If there is a default in any agreement to which
               ----------------
Borrower is a party with a third party or parties resulting in a right by such
third party or parties, whether or not exercised, to accelerate the maturity of
any Indebtedness in an amount in excess of One Hundred Thousand Dollars
($100,000) or that could have a Material Adverse Effect;

                                      16
<PAGE>

          8.7  Subordinated Debt. If Borrower makes any payment on account of
               -----------------
Subordinated Debt, except to the extent such payment is allowed under any
subordination agreement entered into with Bank;

          8.8  Judgments. If a judgment or judgments for the payment of money in
               ---------
an amount individually or in the aggregate, of at least Fifty Thousand Dollars
($50,000) shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of thirty (30) days (provided that no Credit Extensions
will be made prior to the satisfaction or stay of such judgment); or

          8.9  Misrepresentations. If any material misrepresentation or
               ------------------
material misstatement exists now or hereafter in any warranty or representation
set forth herein or in any certificate delivered to Bank by any Responsible
Officer pursuant to this Agreement or to induce Bank to enter into this
Agreement or any other Loan Document.

     9.   BANK'S RIGHTS AND REMEDIES
          --------------------------

          9.1  Rights and Remedies. Upon the occurrence and during the
               -------------------
continuance of an Event of Default, Bank may, at its election, without notice
of its election and without demand, do any one or more of the following, all of
which are authorized by Borrower:

               (a) Declare all Obligations, whether evidenced by this Agreement,
by any of the other Loan Documents, or otherwise, immediately due and payable
(provided that upon the occurrence of an Event of Default described in Section
8.5 all Obligations shall become immediately due and payable without any action
by Bank);

               (b) Cease advancing money or extending credit to or for the
benefit of Borrower under this Agreement or under any other agreement between
Borrower and Bank;

               (c) Demand that Borrower (i) deposit cash with Bank in an amount
equal to the amount of any Letters of Credit remaining undrawn, as collateral
security for the repayment of any future drawings under such Letters of Credit,
and Borrower shall forthwith deposit and pay such amount, and (ii) pay in
advance all Letters of Credit fees scheduled to be paid or payable over the
remaining term of the Letters of Credit;

               (d) Settle or adjust disputes and claims directly with account
debtors for amounts, upon terms and in whatever order that Bank reasonably
considers advisable;

               (e) Without notice to or demand upon Borrower, make such payments
and do such acts as Bank considers necessary or reasonable to protect its
security interest in the Collateral. Borrower agrees to assemble the Collateral
if Bank so requires, and to make the Collateral available to Bank as Bank may
designate. Borrower authorizes Bank to enter the premises where the Collateral
is located, to take and maintain possession of the Collateral, or any part of
it, and to pay, purchase, contest, or compromise any encumbrance, charge, or
lien which in Bank's determination appears to be prior or superior to its
security interest and to pay all expenses incurred in connection therewith. With
respect to any of Borrower's owned premises, Borrower hereby grants Bank a
license to enter into possession of such premises and to occupy the same,
without charge, in order to exercise any of Bank's rights or remedies provided
herein, at law, in equity, or otherwise;

               (f) Without notice to Borrower set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by Bank, or
(ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank, provided that Bank will give Borrower notice of such set-
offs within a reasonable period of time thereafter;

               (g) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral. Bank is hereby granted a license or other right, solely
pursuant to the provisions of this Section 9.1, to use, without charge,
Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any

                                      17
<PAGE>

property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section 9.1, Borrower's
rights under all licenses and all franchise agreements shall inure to Bank's
benefit;

               (h) Sell the Collateral at either a public or private sale, or
both, with notice to Bank if required by law, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places (including
Borrower's premises) as Bank determines is commercially reasonable, and apply
any proceeds to the Obligations in whatever manner or order Bank deems
appropriate;

               (i) Bank may credit bid and purchase at any public sale; and

               (j) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.

          9.2  Power of Attorney. Effective only upon the occurrence and during
               -----------------
the continuance of an Event of Default, Borrower hereby irrevocably appoints
Bank (and any of Bank's designated officers, or employees) as Borrower's true
and lawful attorney to: (a) send requests for verification of Accounts or notify
account debtors of Bank's security interest in the Accounts; (b) endorse
Borrower's name on any checks or other forms of payment or security that may
come into Bank's possession; (c) sign Borrower's name on any invoice or bill of
lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account
debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower's policies of insurance; and (f)
settle and adjust disputes and claims respecting the accounts directly with
account debtors, for amounts and upon terms which Bank determines to be
reasonable; provided Bank may exercise such power of attorney to sign the name
of Borrower on any of the documents described in Section 4.2 regardless of
whether an Event of Default has occurred. The appointment of Bank as Borrower's
attorney in fact and each and every one of Bank's rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have been
fully repaid and performed and Bank's obligation to provide advances hereunder
is terminated.

          9.3  Accounts Collection. At any rime during the term of this
               -------------------
Agreement, Bank may notify any Person owing funds to Borrower of Bank's security
interest in such funds and verify the amount of such Account. Borrower shall
collect all amounts owing to Borrower for Bank, receive in trust all payments as
Bank's trustee, and immediately deliver such payments to Bank in their original
form as received from the account debtor, with proper endorsements for deposit.

          9.4  Bank Expenses. If Borrower fails to pay any amounts or furnish
               -------------
any required proof of payment due to third persons or entities, as required
under the terms of this Agreement, then Bank may do any or all of the following:
(a) make payment of the same or any part thereof, (b) set up such reserves under
the Revolving Facility as Bank deems necessary to protect Bank from the exposure
created by such failure; or (c) obtain and maintain insurance policies of the
type discussed in Section 6.6 of this Agreement, and take any action with
respect to such policies as Bank deems prudent. Any amounts so paid or deposited
by Bank shall constitute Bank Expenses, shall be immediately due and payable,
and shall bear interest at the then applicable rate hereinabove provided, and
shall be secured by the Collateral. Any payments made by Bank shall not
constitute an agreement by Bank to make similar payments in the future or a
waiver by Bank of any Event of Default under this Agreement.

          9.5  Bank's Liability for Collateral. So long as Bank complies with
               -------------------------------
reasonable banking practices, Bank shall not in any way or manner be liable or
responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower.

          9.6  Remedies Cumulative. Bank's rights and remedies under this
               -------------------
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Bank of one right
or remedy

                                      18
<PAGE>

shall be deemed an election, and no waiver by Bank of any Event of Default on
Borrower's part shall be deemed a continuing waiver. No delay by Bank shall
constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be
effective unless made in a written document signed on behalf of Bank and then
shall be effective only in the specific instance and for the specific purpose
for which it was given.

          9.7  Demand; Protest. Borrower waives demand, protest, notice of
               ---------------
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Bank on which Borrower may in any way be liable.
Borrower does not waive its rights unrelated to the foregoing as otherwise
provided in this Agreement.

     10.  NOTICES
          -------

          Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service, certified mail, postage prepaid, return receipt requested, or
by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:

     If to Borrower:          PlaceWare, Inc.
                              1943 Landings Drive
                              Mountain View, CA 94043
                              Attn: Deborah Eudaley, CFO
                              FAX: (650) 526-6150

     with a copy to:          Gunderson Dettmer
                              Attorneys at Law
                              155 Constitution Drive
                              Menlo Park, CA 94025
                              Attn: Steve Spurlock
                              FAX: (650) 321-2800

     If to Bank:              Silicon Valley Bank
                              3003 Tasman Drive, P.O. Box 2607
                              Santa Clara, CA 95054-1191
                              Attn: Mr. Chris Stedman
                              FAX: (408) 496-2599

     Notwithstanding the foregoing, notice sent to Borrower in accordance with
this Section 10 shall be effective despite any failure to provide a copy of such
notice to Borrower's counsel. The parties hereto may change the address at which
they are to receive notices hereunder, by notice in writing in the foregoing
manner given to the other.

     11.  CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
          ------------------------------------------

          The Loan Documents shall be governed by, and construed in accordance
with, the internal laws of the State of California, without regard to principles
of conflicts of law. Each of Borrower and Bank hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH

                                      19
<PAGE>

PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

     12.  GENERAL PROVISIONS
          ------------------

          12.1  Successors and Assigns. This Agreement shall bind and inure to
                ----------------------
the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
         --------  -------
may be assigned by Borrower without Bank's prior written consent, which consent
may be granted or withheld in Bank's sole discretion. Bank shall have the right
without the consent of or notice to Borrower to sell, transfer, negotiate, or
grant participation in all or any part of, or any interest in, Bank's
obligations, rights and benefits hereunder.

          12.2  Indemnification. Borrower shall defend, indemnify and hold
                ---------------
harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by the Loan Documents and
(b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank
as a result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under the Loan Documents or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

          12.3  Time of Essence. Time is of the essence for the performance of
                ---------------
all obligations set forth in this Agreement.

          12.4  Severability of Provisions. Each provision of this Agreement
                --------------------------
shall be severable from every other provisions of this Agreement for the purpose
of determining the legal enforceability of specific provision.

          12.5  Amendments in Writing, Integration. This Agreement cannot be
                ----------------------------------
amended or terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with
respect to the subject matter of this Agreement, if any, are merged into this
Agreement and the Loan Documents.

          12.6  Counterparts. This Agreement 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 Agreement.

          12.7  Survival. All covenants, representations and warranties made in
                --------
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run.

          12.8  Confidentiality. In handling any confidential information Bank
                ---------------
shall exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Agreement
except that disclosure of such information may be made (i) to the subsidiaries
or affiliates of Bank in connection with their present or prospective business
relations with Borrower, (ii) to prospective transferees or purchasers of any
interest in the Loans, provided that they have entered into a comparable
confidentiality agreement in favor of Borrower and have delivered a copy to
Borrower, (iii) as required by law, regulations, rule or order, subpoena,
judicial order or similar order, (iv) as may be required in connection with the
examination, audit or similar investigation of Bank and (v) as Bank may
determine in connection with the enforcement of any remedies hereunder.
Confidential information hereunder shall not include information that either:
(a) is in the public domain or in the knowledge or possession of Bank when
disclosed to Bank, or becomes part of the public domain after disclosure to Bank
through

                                      20
<PAGE>

no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank
does not have actual knowledge that such third party is prohibited from
disclosing such information.

                                      21
<PAGE>

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

                                             PLACEWARE, INC.

                                             By:   /s/ Deborah Eudaley
                                                -------------------------------

                                             Title:     CFO       3/12/99
                                                   ----------------------------

                                             SILICON VALLEY BANK

                                             By:   /s/ Chris Stedman
                                                -------------------------------

                                             Title:     CDS
                                                   ----------------------------

                                      22
<PAGE>

                                   EXHIBIT A

The Collateral shall consist of all right, title and interest of Borrower in and
to the following:

     1.   All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

     2.   All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and
Borrower's Books relating to any of the foregoing;

     3.   All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;

     4.   All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower and Borrower's Books
relating to any of the foregoing;

     5.   All documents, cash, deposit accounts, securities, financial assets,
investment properties, securities accounts, securities entitlements, letters of
credit, certificates of deposit, instruments and chattel paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing;

     6.   All copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; all trade
secret rights, including all rights to unpatented inventions, know-how,
operating manuals, license rights and agreements and confidential information,
now owned or hereafter acquired; all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired; all
claims for damages by way of any past, present and future infringement of any of
the foregoing; and

     7.   Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.

     Notwithstanding the foregoing, the Collateral shall not be deemed to
include any copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; any patents,
trademarks, servicemarks and applications therefor, any trade secret rights,
including any rights to unpatented inventions, know-how, operating manuals,
license rights and agreements and confidential information, now owned or
hereafter acquired; or any claims for damages by way of any past, present or
future infringement of any of the foregoing; provided Collateral shall include
the proceeds of any of the foregoing.
<PAGE>

                                   EXHIBIT B

                  LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

             DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.

  TO:  CENTRAL CLIENT SERVICE DIVISION           DATE:________________________

  FAX#: (408) 496-2426                           TIME:________________________

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

  FROM: PlaceWare, Inc.
        ----------------------------------------------------------------------
                            CLIENT NAME (BORROWER)

  REQUESTED BY:_______________________________________________________________
                           AUTHORIZED SIGNER'S NAME

  AUTHORIZED SIGNATURE:_______________________________________________________

  PHONE NUMBER:_______________________________________________________________

  FROM ACCOUNT #___________________  TO ACCOUNT #_____________________________

  REQUESTED TRANSACTION TYPE                        REQUEST DOLLAR AMOUNT
  --------------------------                        ---------------------

  PRINCIPAL INCREASE (ADVANCE)                      $_________________________
  PRINCIPAL PAYMENT (ONLY)                          $_________________________
  INTEREST PAYMENT (ONLY)                           $_________________________
  PRINCIPAL AND INTEREST (PAYMENT)                  $_________________________

  OTHER INSTRUCTIONS:_________________________________________________________
  ____________________________________________________________________________

  All representations and warranties of Borrower stated in the Loan and
  Security Agreement are true, correct and complete in all material respects
  as of the date of the telephone request for and Advance confirmed by this
  Borrowing Certificate; provided, however, that those representations and
  warranties expressly referring to another date shall be true, correct and
  complete in all material respects as of such date.

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

--------------------------------------------------------------------------------
                                 BANK USE ONLY

  TELEPHONE REQUEST
  -----------------

  The following person is authorized to request the loan payment transfer/loan
  advance on the advance designated account and is known to me.

  ________________________________           _________________________________
         Authorized Requester                          Phone #

  ________________________________           _________________________________
          Received By (Bank)                           Phone #

                       ________________________________
                          Authorized Signature (Bank)

--------------------------------------------------------------------------------
<PAGE>

                                   EXHIBIT C
                          BORROWING BASE CERTIFICATE

________________________________________________________________________________

Borrower:  PlaceWare, Inc.               Lender:  Silicon Valley Bank

Commitment Amount:   $750,000.00

________________________________________________________________________________

ACCOUNTS RECEIVABLE
     1.  Accounts Receivable Book Value as of ___                  $__________
     2.  Additions (please explain on reverse)                     $__________
     3.  TOTAL ACCOUNTS RECEIVABLE                                 $__________

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
     4.  Amounts over 90 days due                     $__________
     5.  Balance of 50% over 90 day accounts          $__________
     6.  Concentration Limits                         $__________
     7.  Foreign Accounts                             $__________
     8.  Governmental Accounts                        $__________
     9.  Contra Accounts                              $__________
     10. Promotion or Demo Accounts                   $__________
     11. Intercompany/Employee Accounts               $__________
     12. Other (please explain on reverse)            $__________
     13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS                      $__________
     14. Eligible Accounts (#3 minus #13)                          $__________
     15. LOAN VALUE OF ACCOUNTS (75% of #14)                       $__________

BALANCES
     16. Maximum Loan Amount                                       $__________
     17. Total Funds Available [Lesser of #16 or #15]              $__________
     18. Present balance owing on Line of Credit                   $__________
     19. Outstanding under Sublimits ()                            $__________
     20. Outstanding under Sublimits (Letters of Credit)           $__________
     21. Outstanding under Sublimits (Foreign Exchange)            $__________
     22. RESERVE POSITION (#17 minus #18, #19, #20, and #21)       $__________

The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Silicon Valley Bank.

                                                      --------------------------
COMMENTS:
                                                             BANK USE ONLY
                                                             -------------

                                                       Rec'd By:_______________
                                                                  Auth. Signer

PLACEWARE, INC.                                        Date:___________________

                                                       Verified:_______________
                                                                 Auth. Signer
By:_________________________
       Authorized Signer                               Date:___________________

                                                       ________________________

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

<PAGE>

                        AGREEMENT TO PROVIDE INSURANCE

Grantor:   PlaceWare, Inc.                       Bank:   Silicon Valley Bank

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

INSURANCE REQUIREMENTS. PlaceWare, Inc. ("Grantor") understands that insurance
coverage is required in connection with the extending of a loan or the providing
of other financial accommodations to Grantor by Bank. These requirements are set
forth in the Loan Documents. The following minimum insurance coverages must be
provided on the following described collateral (the "Collateral"):

     Collateral:         All Inventory, Equipment and Fixtures.
     Type:               All risks, including fire, theft and liability.
     Amount:             Full insurable value.
     Basis:              Replacement value.
     Endorsements:       Loss payable clause to Bank with stipulation that
                         coverage will not be canceled or diminished without a
                         minimum of twenty (20) days' prior written notice to
                         Bank.

INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Bank. Grantor understands
that credit may not be denied solely because insurance was not purchased through
Bank.

FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Bank, on or before
closing, evidence of the required insurance as provided above, with an effective
date of March 11, 1999, or earlier. Grantor acknowledges and agrees that if
Grantor fails to provide any required insurance or fails to continue such
insurance in force, Bank may do so at Grantor's expense as provided in the Loan
and Security Agreement. The cost of such insurance, at the option of Bank, shall
be payable on demand or shall be added to the indebtedness as provided in the
security document. GRANTOR ACKNOWLEDGES THAT IF BANK SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE
TO THE COLLATERAL, UP TO THE BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN
THE COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE
ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.

AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Bank to provide to any person (including any insurance agent or
company) all information Bank deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 11, 1999.

GRANTOR:

PLACEWARE, INC.

x   /s/ Deborah Eudaley     3/12/99
  ----------------------------------
  Authorized Officer

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

                               FOR BANK USE ONLY
                            INSURANCE VERIFICATION

     DATE: _____________________                  PHONE: ___________________
     AGENT'S NAME: _________________________________________________________
     INSURANCE COMPANY: ____________________________________________________
     POLICY NUMBER: ________________________________________________________
     EFFECTIVE DATES: ______________________________________________________
     COMMENTS: _____________________________________________________________

    ==========================================================================
<PAGE>

                        CORPORATE RESOLUTIONS TO BORROW

________________________________________________________________________________

Borrower:    PlaceWare, Inc.

________________________________________________________________________________

     I, the undersigned Secretary or Assistant Secretary of PlaceWare, Inc. (the
"Corporation"), HEREBY CERTIFY that the Corporation is organized and existing
under and by virtue of the laws of the State of DELAWARE.

     I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true and
complete copies of the Articles of Incorporation and Bylaws of the Corporation,
each of which is in full force and effect on the date hereof.

     I FURTHER CERTIFY that at a meeting of the Directors of the Corporation,
duly called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions
were adopted.

     BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below.

         NAMES                     POSITIONS               ACTUAL SIGNATURES
--------------------------------------------------------------------------------
  Barry James Folsom                  CEO                /s/ Barry James Folsom
----------------------      -----------------------     ------------------------
   Deborah Eudaley                    CFO                  /s/ Deborah Eudaley
----------------------      -----------------------     ------------------------
    Michael Jordan               VP Engineering             /s/ Michael Jordan
----------------------      -----------------------     ------------------------

acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:

     Borrow Money. To borrow from time to time from Silicon Valley Bank
("Bank"), on such terms as may be agreed upon between the officers, employees,
or agents and Bank, such sum or sums of money as in their judgement should be
borrowed, without limitation, including such sums as are specified in that
certain Loan and Security Agreement dated as of March 11, 1999 (the "Loan
Agreement").

     Execute Notes. To execute and deliver to Bank the promissory note or notes
of the Corporation on Lender's forms, at such rates of interest and on such
terms as may be agreed upon, evidencing the sums of money so borrowed or any
indebtedness of the Corporation to Bank, and also to execute and deliver to
Lender one or more renewals, extensions, modifications, refinancings,
consolidations, or substitutions for one or more of the notes, or any portion of
the notes.

     Grant Security. To grant a security interest to Bank in the Collateral
described in the Loan Agreement, which security interest shall secure all of the
Corporation's Obligations, as described in the Loan Agreement.

     Negotiate Items. To draw, endorse, and discount with Bank all drafts, trade
acceptances, promissory notes, or other evidences of indebtedness payable to or
belonging to the Corporation or in which the Corporation may have an interest,
and either to receive cash for the same or to cause such proceeds to be credited
to the account of the Corporation with Bank, or to cause such other disposition
of the proceeds derived therefrom as they may deem advisable.

     Letters of Credit; Foreign Exchange. To execute letters of credit
applications, foreign exchange agreements and other related documents pertaining
to Bank's issuance of letters of credit and foreign exchange contracts.

     Further Acts. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any and all fees
and costs, and to execute and deliver such other documents and agreements as
they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.

                                       1
<PAGE>

     BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

     I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set forth opposite their respective names; that
the foregoing Resolutions now stand of record on the books of the Corporation;
and that the Resolutions are in full force and effect and have not been modified
or revoked in any manner whatsoever.

     IN WITNESS WHEREOF, I have hereunto set my hand on March 11, 1999, and
attest that the signatures set opposite the names listed above are their genuine
signatures.

                                         CERTIFIED TO AND ATTESTED BY:

                                         X     /s/ Steven M. Spurlock
                                           -------------------------------

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

Attachment 1 - Articles of Incorporation
Attachment 2 - Bylaws

                                       2
<PAGE>

                           NEGATIVE PLEDGE AGREEMENT

     This Negative Pledge Agreement is made as of March 11, 1999, by and between
PlaceWare, Inc. ("Borrower") and Silicon Valley Bank ("Silicon").

     In connection with, among other documents, the Loan and Security Agreement
(the "Loan Documents") being concurrently executed herewith between Borrower and
Silicon, Borrower agrees as follows:

     1.   Borrower shall not, without the consent of Bank which will not be
          unreasonably withheld, sell, transfer, assign, mortgage, pledge,
          lease, grant a security interest in, or encumber any of Borrower's
          intellectual property, including, without limitation, the following:

          a.   Any and all copyright rights, copyright applications, copyright
               registrations and like protections in each work or authorship and
               derivative work thereof, whether published or unpublished and
               whether or not the same also constitutes a trade secret, now or
               hereafter existing, created, acquired or held;

          b.   All mask works or similar rights available for the protection of
               semiconductor chips, now owned or hereafter acquired;

          c.   Any and all trade secrets, and any and all intellectual property
               rights in computer software and computer software products now or
               hereafter existing, created acquired or held;

          d.   Any and all design rights which may be available to Borrower now
               or hereafter existing, created, acquired or held;

          e.   All patents, patent applications and like protections including,
               without limitation, improvements, divisions, continuations,
               renewals, reissues, extensions and continuations-in-part of the
               same, including without limitation the patents and patent
               applications;

          f.   Any trademark and servicemark rights, whether registered or not,
               applications to register and registrations of the same and like
               protections, and the entire goodwill of the business of Borrower
               connected with and symbolized by such trademarks, including
               without limitation;

          g.   Any and all claims for damages by way of past, present and future
               infringements of any of the rights included above, with the
               right, but not the obligation, to sue for and collect such
               damages for said use or infringement of the intellectual property
               rights identified above;

          h.   All licenses or other rights to use any of the Copyrights,
               Patents, Trademarks or Mask Works, and all license fees and
               royalties arising from such use to the extent permitted by such
               license or rights; and

          i.   All amendments, extensions, renewals and extensions of any of the
               Copyrights, Trademarks, Patents, or Mask Works; and

                                       1
<PAGE>

          j.   All proceeds and products of the foregoing, including without
               limitation all payments under insurance or any indemnity or
               warranty payable in respect of any of the foregoing.

     2.   Notwithstanding the foregoing, Borrower may, in the ordinary course of
          business, grant non-exclusive licenses for the use of its intellectual
          property and develop intellectual property for the ownership of others
          without any prior consent from Silicon.

     3.   It shall be an Event of Default under the Loan Documents between
          Borrower and Silicon if there is a breach of any term of this Negative
          Pledge Agreement.

     4.   Capitalized terms used but not otherwise defined herein shall have the
          same meaning as in the Loan Documents.

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

BORROWER:

PLACEWARE, INC.

By:   /s/ Deborah Eudaley
   --------------------------

Name:  CFO
     ------------------------

Title:  DEBORAH EUDALEY
      -----------------------

SILICON:

SILICON VALLEY BANK

By:   /s/ Chris Stedman
   --------------------------

Name:  Chris Stedman
     ------------------------

Title:  AVP
      -----------------------

                                       2
<PAGE>

                          LOAN MODIFICATION AGREEMENT

     This Loan Modification Agreement is entered into as of April 30, 1999, by
and between Placeware, Inc. ("Borrower") and Silicon Valley Bank ("Bank").

1.   DESCRIPTION OF EXISTING INDEBTEDNESS:  Borrower and Bank are parties to,
     ------------------------------------
among other documents, a Loan and Security Agreement, dated March 11, 1999, as
may be amended from time to time, (the "Loan Agreement"). The Loan Agreement
provides for, among other things, a Committed Revolving Line in the original
principal amount of $750,000. Defined terms used but not otherwise defined
herein shall have the same meanings as in the Loan Agreement.

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."

2.   DESCRIPTION OF COLLATERAL AND GUARANTIES.  Repayment of the Indebtedness is
     ----------------------------------------
secured by the Collateral as described in the Loan Agreement.

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".

3.   DESCRIPTION OF CHANGE IN TERMS.
     ------------------------------

     A.   Modification(s) to Loan Agreement
          ---------------------------------

          1.   Section 2.1.4 entitled "Cash Management Services Sublimit" is
               hereby amended to read, in its entirety, as follows:

               Cash Management Services Sublimit.
               ---------------------------------

               Borrower may utilize up to an aggregate amount not to exceed
               $150,000 for Cash Management Services provided by Lender, which
               services will include the business credit card services as
               defined in certain cash management service agreements provided to
               Borrower from time to time in connection herewith (a "Cash
               Management Service", or the "Cash Management Services").  All
               amounts actually paid by Bank in respect of a Cash Management
               Service or Cash Management Services shall, when paid, constitute
               an Advance under the Committed Revolving Line.

4.   CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended
     ------------------
wherever necessary to reflect the changes described above.

5.   NO DEFENSES OF BORROWER.  Borrower (and each guarantor and pledgor signing
     -----------------------
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.

6.   CONTINUING VALIDITY.  Borrower (and each guarantor and pledgor signing
     -------------------
below) understands and agrees that in modifying the existing Indebtedness, Bank
is relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents.  Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect.  Bank's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Bank to make any future modifications to the
Indebtedness.  Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Indebtedness.  It is the intention of Bank and Borrower to
retain as liable parties all makers and endorsers of
<PAGE>

Existing Loan Documents, unless the party is expressly released by Bank in
writing. No maker, endorser, or guarantor will be released by virtue of this
Loan Modification Agreement. The terms of this paragraph apply not only to this
Loan Modification Agreement, but also to all subsequent loan modification
agreements.

     This Loan Modification Agreement is executed as of the date first written
above.

BORROWER:                                BANK:

PLACEWARE, INC.                          SILICON VALLEY BANK

By:                                        By:
   __________________________________         ________________________________
Name:                                      Name:
     ________________________________           ______________________________
Title:                                     Title:
      _______________________________            _____________________________

                                       2
<PAGE>

                          LOAN MODIFICATION AGREEMENT

     This Loan Modification Agreement is entered into as of January 24, 2000, by
and between Placeware, Inc. ("Borrower") and Silicon Valley Bank ("Bank").

1.   DESCRIPTION OF EXISTING INDEBTEDNESS:  Borrower and Bank are parties to,
     ------------------------------------
among other documents, a Loan and Security Agreement, dated March 11, 1999, as
may be amended from time to time, (the "Loan Agreement").  The Loan Agreement
provides for, among other things, a Committed Revolving Line in the original
principal amount of $750,000.  Defined terms used but not otherwise defined
herein shall have the same meanings as in the Loan Agreement.

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."

2.   DESCRIPTION OF COLLATERAL AND GUARANTIES.  Repayment of the Indebtedness is
     ----------------------------------------
secured by the Collateral as described in the Loan Agreement.

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents".  Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".

3.   DESCRIPTION OF CHANGE IN TERMS.
     ------------------------------

     A.   Modification(s) to Loan Agreement
          ---------------------------------

          1.   The following defined terms under Section 1.1 entitled
               "Definitions" are hereby amended/incorporated as follows:

               "Borrowing Base" means an amount equal to eighty percent 80% of
               Eligible Accounts, as determined by Bank with reference to the
               most recent Borrowing Base Certificate delivered by Borrower.

               "Committed Revolving Line" means a credit extension of up to Two
               Million Five Hundred Thousand Dollars ($2,500,000).

               "Deferred Revenue" is all amounts received in advance of
               performance under contracts and not yet recognized as revenue.

               "Revolving Maturity Date" means January 24, 2001.

          2.   Sub letter (b) under Section 6.3 entitled "Financial Statements,
               Reports, Certificates" is hereby amended as follows:

               (b) as soon as available, but in any event within one hundred
               twenty (120) days after the end of Borrower's fiscal year,
               audited consolidated financial statements of Borrower prepared in
               accordance with GAAP, consistently applied together with an
               unqualified opinion on such financial statements of an
               independent certified public accounting firm reasonably
               acceptable to Bank;

          3.   The third paragraph under Section 6.3 entitled "Financial
               Statements, Reports, Certificates" is hereby amended as follows:
<PAGE>

               Bank shall have the right from time to time hereafter to audit
               Borrower's Accounts and appraise Collateral at Borrower's
               expense, provided that, such audits will be conducted no more
               than every year unless an Event of Default has occurred and is
               continuing. The initial audit shall take place within 30 days of
               the date of this Agreement.

          4.   Section 6.9 entitled "Financial Covenants" is hereby incorporated
               into the Agreement as follows:

               6.9   Financial Covenants.

               Borrower will maintain as of the last day of each month, unless
               otherwise noted:

               Quick Ratio (Adjusted).  A ratio of Quick Assets to Current
               Liabilities minus Deferred Revenue of at least 1.75 to 1.0.

               Revenue (measured quarterly).  A minimum revenue within 25% of
               the projected financial plan submitted to Bank prior to January
               31/st/ of each year as acceptable to Bank.

4.   CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended
     ------------------
wherever necessary to reflect the changes described above.

5.   PAYMENT OF LOAN FEE.  Borrower shall pay to Bank a fee in the amount of
     -------------------
Twelve Thousand Five Hundred and 00/100 Dollars ($12,500.00) (the "Loan Fee").

6.   NO DEFENSES OF BORROWER.  Borrower (and each guarantor and pledgor signing
     -----------------------
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.

7.   CONTINUING VALIDITY.  Borrower (and each guarantor and pledgor signing
     -------------------
below) understands and agrees that in modifying the existing Indebtedness, Bank
is relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents.  Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect.  Bank's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Bank to make any future modifications to the
Indebtedness.  Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Indebtedness.  It is the intention of Bank and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Bank in writing.  No maker, endorser,
or guarantor will be released by virtue of this Loan Modification Agreement.
The terms of this paragraph apply not only to this Loan Modification Agreement,
but also to all subsequent loan modification agreements.

8.   CONDITIONS.  The effectiveness of this Loan Modification Agreement is
     ----------
conditioned upon Borrower's payment of the Loan Fee.

     This Loan Modification Agreement is executed as of the date first written
above.

BORROWER:                                BANK:

PLACEWARE, INC.                          SILICON VALLEY BANK
<PAGE>

By:                                        By:
   __________________________________         ________________________________
Name:                                      Name:
     ________________________________           ______________________________
Title:                                     Title:
      _______________________________            _____________________________

<PAGE>

[LOGO]

                              SILICON VALLEY BANK

                       PRO FORMA INVOICE FOR LOAN CHARGES

BORROWER:             PLACEWARE, INC.

LOAN OFFICER:         Chris Stedman

DATE:                 December 22, 1999

                      Loan Fee                    $12,500.00
                      Documentation Fee           $   250.00

                      TOTAL FEE DUE               $12,750.00
                      -------------               ==========

Please indicate the method of payment:

        { }  A check for the total amount is attached.

        {X}   Debit DDA #3300032324 for the total amount.
                        -----------

---------------------------------------
Authorized Officer             (Date)

---------------------------------------
Silicon Valley Bank            (Date)
Account Officer's Signature
<PAGE>

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

                           WARRANT TO PURCHASE STOCK

Corporation: PLACEWARE, INC.
Number of Shares: see below
Class of Stock: see below
Initial Exercise Price: see below
Issue Date: March 11, 1999
Expiration Date: March 11, 2007

THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other
good and valuable consideration, unless on or before July 1, 1999 (i) the
corporation (the "Company") provides Bank with a Lead Investor Term Sheet or
(ii) the Equity Event occurs (both "Lead Investor Term Sheet" and "Equity.
Event" shall be as defined in that certain Loan and Security Agreement between
the Company and the Holder, dated as of the Issue Date (the "Loan Agreement")),
then, once any Advances (as defined in the Loan Agreement) have been made and
prior to the Expiration Date, Silicon Valley Bank ("Holder") is entitled to
purchase the number of fully paid and nonassessable shares of the class of
securities (the "Shares") of the corporation at the Initial Exercise Price per
share (the "Warrant Price") all as set forth herein and as adjusted pursuant to
Article 2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth in this Warrant.

The Warrant Price shall be equal to the price per share at which the company,
after the date hereof, first sells its equity securities in an offering or
series of related offerings in which the net proceeds to the Company is not less
than Four Million Dollars (such offering being the "Next Round", and the price
per share at which the company sells such securities being the "Next Round
Price"), and the shares shall be of the class of securities issued in the Next
Round; provided that if the Next Round is not completed on or before March 11,
2000, the Warrant Price shall be the Next Round Price or the lowest price per
share at which the Company has sold any shares of its Series B, whichever is
less, and the shares shall be Series B. On July 1, 1999, if exercisable, this
Warrant shall be exercisable for a number of Shares equal to the quotient
derived by dividing $22,500 by the Warrant Price.

Notwithstanding the foregoing, on the 1st of each month beginning on August 1,
1999 and continuing until the Equity Event occurs or all the Company's
Obligations (as defined in the Loan Agreement) under the Loan Agreement are
satisfied, this Warrant shall be exercisable for an additional number of Shares
equal to the quotient derived by dividing $7,500 by the Warrant Price. The
number of shares for which this Warrant shall be exercisable shall increase by
such amount each month but shall in no event exceed the quotient derived by
dividing $45,000 by the Warrant Price.

<PAGE>

ARTICLE 1. EXERCISE.
           ---------

     1.1   Method of Exercise. Holder may exercise this Warrant by delivering a
           ------------------
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company. Unless Holder is exercising the
conversion right set forth in Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Warrant Price for the Shares being purchased.

     1.2   Conversion Right. In lieu of exercising this Warrant as specified in
           ----------------
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall be
determined pursuant Section 1.4.

     1.3   No Rights of Shareholder. This Warrant does not entitle Holder to
           ------------------------
any voting rights as a shareholder of the Company prior to the exercise hereof.

     1.4   Fair Market Value. If the Shares are traded in a public market, the
           -----------------
fair market value of the Shares shall be the closing price of the Shares (or the
closing price of the Company's stock into which the Shares are convertible)
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company. If the Shares are not traded in a public market, the
Board of Directors of the Company shall determine fair market value in its
reasonable good faith judgement. The foregoing notwithstanding, if Holder
advises the Board of Directors in writing that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon a reputable
investment banking or public accounting firm to undertake such valuation. If the
valuation of such investment banking firm is greater than that determined by the
Board of Directors, then all fees and expenses of such investment banking firm
shall be paid by the Company. In all other circumstances, such fees and expenses
shall be paid by Holder.

     1.5   Delivery of Certificate and New Warrant. Promptly after Holder
           ---------------------------------------
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.

     1.6   Replacement of Warrants. On receipt of evidence reasonably
           -----------------------
satisfactory the Company of the loss, theft, destruction or mutilation of this
Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.

     1.7   Repurchase on Sale, Merger, or Consolidation of the Company.
           -----------------------------------------------------------

           1.7.1  "Acquisition". For the purpose of this Warrant,
                   -----------
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.

           1.7.2  Assumption of Warrant. Upon the closing of any Acquisition the
                  ---------------------
successor entity shall assume the obligations of this Warrant, and this Warrant
shall be exercisable for the same

                                       2
<PAGE>

securities, cash, and property as would be payable for the Shares issuable upon
exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The
Warrant Price shall be adjusted accordingly.

ARTICLE 2.  ADJUSTMENTS TO THE SHARES.
            -------------------------

     2.1    Stock Dividends, Splits, Etc. If the Company declares or pays a
            ----------------------------
dividend on its common stock payable in common stock, or other securities,
subdivides the outstanding common stock into a greater amount of common stock,
then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend or subdivision occurred.

     2.2    Reclassification, Exchange or Substitution. Upon any
            ------------------------------------------
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event. The Company or its successor shall promptly issue to Holder a new
Warrant for such new securities or other property. The new Warrant shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Section 2.2
shall similarly apply to successive reclassifications, exchanges, substitutions,
or other events.

     2.3    Adjustments for Combinations, Etc. If the outstanding Shares are
            ---------------------------------
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.

     2.4    Adjustments for Diluting Issuances. The number of shares of common
            ----------------------------------
stock issuable upon conversion of the Shares shall be subject to adjustment,
from time to time in the manner set forth in the Company's Amended and Restated
Articles of Incorporation in effect on the Issue Date.

     2.5    No Impairment. The Company shall not, by amendment of its Articles
            -------------
of Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this Article 2 and
in taking all such action as may be necessary or appropriate to protect Holder's
rights under this Article against impairment.

     2.6    Fractional Shares. No fractional Shares shall be issuable upon
            -----------------
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder amount computed by
multiplying the fractional interest by the fair market value of a full Share.

     2.7    Certificate as to Adjustments. Upon each adjustment of the Warrant
            -----------------------------
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The

                                       3
<PAGE>

Company shall, upon written request, furnish Holder a certificate setting forth
the Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.

ARTICLE 3.  REPRESENTATIONS AND CONVENANTS OF THE COMPANY.
            ---------------------------------------------

     3.1    Representations and Warranties. The Company hereby represents and
            ------------------------------
warrants to the Holder that all Shares which may be issued upon the exercise of
the purchase right represented by this Warrant, and all securities, if any,
issuable upon conversion of the Shares, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws. The Company shall at all
times reserve a sufficient number of shares of stock for issuance upon Holder's
exercise of its rights hereunder.

     3.2    Notice of Certain Events. If the Company proposes at any time (a) to
            ------------------------
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give
Holder (1) at least 10 days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 10 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in the (e) above, the same notice as is given to the
holders of such registration rights.

     3.3    Information Rights. So long as the Holder holds this Warrant and/or
            ------------------
any of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual financial statements of the Company.

     3.4    Registration Under Securities Act of 1933, as amended. The Company
            -----------------------------------------------------
hereby grants to Holder the same piggyback registration rights granted to the
purchasers of the Series B Preferred Stock.

ARTICLE 4.  MISCELLANEOUS.
            -------------

     4.1    Term. This Warrant is exercisable, in whole or in part, at any time
            ----
and from time to time on or before the Expiration Date set forth above.

     4.2    Legends. This Warrant and the Shares (and the securities issuable,
            -------
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED

                                       4
<PAGE>

     WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO
     RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
     CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

     4.3    Compliance with Securities Laws on Transfer. This Warrant and the
            -------------------------------------------
Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e)
in reasonable detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holder's notice of
proposed sale.

     4.4    Transfer Procedure. Subject to the provisions of Section 4.2. Holder
            ------------------
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) by giving the Company notice of the portion of
the Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the
Company for reissuance to the transferee(s) (and Holder if applicable). Unless
the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, the Company shall have the right to refuse to
transfer any portion of this Warrant to any person who directly competes with
the Company.

     4.5    Notices. All notices and other communications from the Company to
            -------
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.

     4.6    Waiver. This Warrant and any term hereof may be changed, waived,
            ------
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

     4.7    Attorneys Fees. In the event of any dispute between the parties
            --------------
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorney's fees.

     4.8    Governing Law. This Warrant shall be governed by and construed in
            -------------
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.

                                           PLACEWARE, INC

                                           By:  [ILLEGIBLE]^^
                                              ------------------------------

                                           Title:  CFO
                                                 ---------------------------

                                       5
<PAGE>

                                  APPENDIX 1

                              NOTICE OF EXERCISE
                              ------------------

     1.   The undersigned hereby elects to purchase _________ shares of the
Stock of ______________________________ pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.

     1.   The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This conversion
is exercised with respect to ____________________________of the Shares covered
by the Warrant.

     [Strike paragraph that does not apply.]

     2.   Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:

                         _____________________________
                                     (Name)

                        _____________________________
                        _____________________________
                                   (Address)

     3.   The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.

                                             ________________________________
                                             (Signature)

_________________________
(Date)

                                       6<PAGE>

                                                                   EXHIBIT 10.11

LINC CAPITAL, INC.                             LINC Capital, Inc.
MASTER LEASE AGREEMENT                         303 East Wacker Drive, #1000
                                               Chicago, Illinois 60601
Lessee:  PLACEWARE, INC.                       (312) 946-1000
Address: 201 Ravendale Drive,                  Master Lease Agreement No. 7336
         Mountain View, CA 94043               Date: May 3, 1999

LINC Capital, Inc. ("Lessor") hereby leases to Lessee and Lessee leases from
Lessor, in accordance with the terms and conditions hereinafter set forth, the
equipment and property purchased by Lessor for lease to the Lessee hereunder
together with all replacement parts, additions, accessories, alterations and
repairs incorporated therein or now or hereafter affixed thereto Add-on Items
(as defined herein) (herein collectively referred to as the "Equipment")
described in each Schedule which may be executed by Lessor and Lessee from time
to time (individually a "Schedule" and collectively, the "Schedules"), each of
which is made a part hereof. For all purposes of this Master Lease Agreement
("Lease"), each Schedule relating to one or more items of Equipment shall be
deemed a separate lease incorporating all of the terms and provisions of this
Lease. In the event of a conflict between the terms of this Lease and the terms
and conditions of an Schedule, the terms and conditions of the Schedule shall
govern and control that Schedule.

1. Term and Rental. The term of this Lease (the "Initial Lease Term") for any
item of Equipment shall be set forth in the Schedule relating to such item of
Equipment and shall commence (the "Commencement Date") on the Acceptance Date.
The "Acceptance Date" with respect to each Schedule shall be the applicable of
either: (1) the date of delivery to Lessee of all of the Equipment to be leased
thereunder; (2) in the case of Equipment which is the subject of a sale and
leaseback between Lessor and Lessee, the date upon which Lessor purchases such
Equipment from Lessee: or (3) in the case of Equipment requiring installation,
the date of installation of the Equipment. If the Acceptance Date is other than
the first day of a calendar quarter, then the Commencement Date of the Initial
Lease Term set forth in any Schedule shall be the first day of the calendar
quarter following the month which includes the Acceptance Date and Lessee shall
pay to Lessor, in addition to all other sums due hereunder, an amount equal to
one-thirtieth of the amount of the average monthly rental payment due or to
become due hereunder multiplied by the number of days from and including the
Acceptance Date to the Commencement Date of the Initial Lease Term set forth in
the Schedule. During the entire Initial Lease Term and any extension or renewal
of the term of this Lease, Lessee agrees to pay the total rental due hereunder
which shall be the total amount of all rental payments set forth in the Schedule
plus such additional amounts as may become due hereunder or pursuant to any
written modification hereof or additional written agreement hereto. Except as
otherwise specified in the Schedule, rental payments payable hereunder shall be
due monthly and shall be payable in advance on the first day of each month
during the term of this Lease beginning with the Commencement Date of the
Initial Lease Term. All rental payments due hereunder shall be sent to the
address of the Lessor specified in this Lease or in the Schedule or as otherwise
directed by the Lessor in writing. Rental payments or any other payments due
hereunder not made by their scheduled due date shall be overdue and shall be
subject to a service charge in an amount equal to two percent (2%) per month or
the maximum rate permitted by law whichever is less (the "Service Charge Rate")
applied to amount of the overdue payments from the date due until paid. If
Lessor shall at any time accept a rental payment after it shall become due, such
acceptance shall not constitute or be construed as a waiver of any or all of
Lessor's rights hereunder, including without limitation those rights of Lessor
set forth in Sections 12 and 13 hereof.

2. Title. This is an agreement of lease only. Except as otherwise provided in
any applicable Schedule, Lessee shall have no right, title or interest in or to
the Equipment leased hereunder, except as to the lawful use thereof subject to
the terms and conditions of this Lease. All of the Equipment shall remain
personal property (whether or not the Equipment may at any time become attached
or affixed to real property). The Equipment is and shall remain the sole and
exclusive property of Lessor or its assignees. All replacement parts,
modifications, repairs, alterations, additions and accessories now or hereafter
incorporated in or affixed to the Equipment whether before or after the
Commencement Date (herein collectively called "Add-on Items") are hereby
included in the definition of "Equipment". All Add-on Items shall become the
property, of Lessor upon being so incorporated or affixed to the Equipment and
shall be returned to Lessor as provided in Section 3 (other than alterations,
additions and accessions that are attached or affixed by Lessee with notice to
Lessor after the Commencement Date for which the Lessor has not given value or
purchased and which are readily removable by Lessee from the Equipment without
any diminution of value or functionality to the Equipment). Upon the request of
Lessor, Lessee will affix to the Equipment labels or other markings supplied by
Lessor indicating its ownership of the Equipment and shall keep the same affixed
for the entire term of this Lease. Lessee agrees to promptly execute and deliver
or cause to be executed and delivered to Lessor and Lessor is hereby authorized
to record or file, any statement and/or instrument reasonably requested by
Lessor for the purpose of showing Lessor's interest in the Equipment, including
without limitation, financing statements, security agreements, and waivers with
respect to rights in the Equipment from any owners or mortgagees of any real
estate where the Equipment may be located. In the event that Lessee fails or
refuses to execute and/or file Uniform Commercial Code financing statements or
other instruments or recordings which Lessor or its assignee reasonably deems
necessary to perfect or maintain perfection of Lessor's or its assignee's
interests hereunder. Lessee hereby appoints Lessor as Lessee's limited attorney-
in-fact to execute and record all documents necessary to perfect or maintain the
perfection of Lessor's interests hereunder. Lessee shall pay Lessor for any
costs or fees relating to any filings hereunder including, but not limited to
actual out of pocket costs, fees, searches, documentation preparation,
documentary stamps, privilege taxes and reasonable attorneys' fees. If any item
of Equipment includes computer software purchased by Lessor or for which Lessor
has given Lessee value, Lessee shall upon request made by Lessor, execute and
deliver and shall cause Seller (as hereinafter defined) to deliver all such
documents as are necessary to effectuate assignment of all software licenses to
Lessor.

3. Acceptance and Return of Equipment. Lessor shall, at any time prior to
unconditional acceptance of all Equipment by Lessee, have the right to cancel
this Lease with respect to such Equipment (and if the Equipment or any portion
thereof has not previously been delivered, Lessor may refuse to pay for the
Equipment or any portion thereof or refuse to cause the same to be delivered)
if: (a) the Acceptance Date with respect to any item of Equipment to be leased
pursuant to any Schedule has not occurred within ninety (90) days of the
estimated Acceptance Date set forth in such Schedule or (b) there shall be, in
the reasonable judgment of Lessor, a material adverse change in the financial
condition or credit standing of Lessee or of any guarantor of Lessee's
performance under this Lease since the date of the most recent financial
statements of Lessee or of such guarantor submitted to Lessor. Upon any
cancellation by Lessor pursuant to this Section or the provisions of any
Schedule, Lessee shall forthwith reimburse to Lessor all sums paid by Lessor
with respect to such Equipment plus all costs and expenses of Lessor incurred in
connection with such Equipment and any interest or rentals due hereunder in
connection with such Equipment and shall pay to Lessor all other sums then due
hereunder, whereupon if Lessee is not then in default and has fully performed
all of its obligations hereunder, Lessor will, upon request of Lessee, transfer
to Lessee without warranty or recourse any rights that Lessor may then have with
respect to such Equipment.

Lessee agrees to promptly execute and deliver to Lessor (in no event later than
15 days after the Acceptance Date) a confirmation by Lessee of unconditional
acceptance of the Equipment in the form supplied by Lessor (the "Equipment
Acceptance"). Lessee agrees, before execution of the aforesaid Equipment
Acceptance, to inform Lessor in writing of any defects in the Equipment, or in
the installation thereof, which have come to the attention of

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Lessee or its agents and which might give rise to a claim by Lessee against the
Seller or any other person. If Lessee fails to give notice to Lessor of any such
defects or fails to deliver to Lessor the Equipment Acceptance as provided
herein, it shall be deemed an acknowledgment by Lessee (for purposes of this
Lease only) that no such defects in the Equipment or its installation exist and
it shall be conclusively presumed, solely as between Lessor and its assignees
and Lessee, that such Equipment has been unconditionally accepted by Lessee xxx
hereunder.

Except as otherwise provided in any Schedule, upon expiration or the
cancellation or termination of the Lease with respect to any Equipment, Lessee
shall return the Equipment to Lessor as provided herein. Lessee shall provide
Lessor with not less than ninety (90) days prior written notice of its intention
to return the Equipment upon expiration of the Initial Lease Term. Upon
expiration or the cancellation or termination of the Lease with respect to any
Equipment, Lessee shall, at its own expense, assemble, crate, insure and deliver
all of the Equipment and all of the service records and all software and
software documentation subject to this Lease and any Schedules hereto to Lessor
in the same good condition and repair as when received, reasonable wear and tear
resulting only from proper use thereof excepted, to such reasonable destination
within the continental United States as Lessor shall designate with all packing,
drayage and freight charges to the return destination designated by Lessor pre-
paid by Lessee with evidence of transit insurance on all items of Equipment at
no less than their estimated fair market value as specified by Lessor. Lessee
shall, immediately prior to such return of each item of Equipment or commercial
unit of Equipment, provide to Lessor a letter from the manufacturer of the
equipment or another service organization reasonably acceptable to Lessor
certifying that said item is in good working order, with reasonable wear and
tear resulting only from proper use thereof excepted, whether such item is
eligible for a maintenance agreement by such manufacturer, and all software and
related attachments are included thereon. If any computer software requires
relicensing when removed from Lessee's premises, Lessee shall bear all costs of
such relicensing. Except as otherwise expressly provided in the Schedule, if
Lessee fails for any reason to provide the notice set forth above or Lessee
fails to redeliver the Equipment back to Lessor in accordance with the terms set
forth above, Lessee shall pay to Lessor, at Lessor's election, an amount equal
to the highest monthly payment set forth in the Schedule for a period of not
less than three (3) months and at the end of such period of time ("Holdover
Period"). Except as otherwise expressly provided in the Schedule, if Lessee
fails or refuses to return the Equipment as provided herein at the end of any
Holdover Period, Lessee shall pay to Lessor, at Lessor's option, an amount equal
to the highest monthly rental payment set forth in the Schedule for each month
or portion thereof, until Lessee so returns the Equipment to Lessor. Should
Lessor permit use by Lessee of any Equipment beyond the Initial Lease Term, or,
if applicable, any exercised extension or renewal term, the lease obligations of
Lessee shall continue and such permissive use shall not be construed as a
renewal of the term thereof, or as a waiver of any right or continuation of any
obligation of Lessor hereunder, and Lessor may take possession of any such
Equipment at any time upon demand.

4. Disclaimer of Warranties. LESSEE HAS EXCLUSIVELY SELECTED AND CHOSEN THE
TYPE, DESIGN, CONFIGURATION, SPECIFICATION AND QUALITY OF THE EQUIPMENT HEREIN
LEASED AND THE VENDOR, DEALER, SELLER, MANUFACTURER OR SUPPLIER THEREOF (HEREIN
COLLECTIVELY CALLED "SELLER"), AS SET FORTH IN THE SCHEDULES. LESSOR MAKES NO
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE CONDITION OF THE EQUIPMENT, ITS
MERCHANTABILITY OR ITS FITNESS, ADAPTABILITY, ANY IMPLIED WARRANTY OF QUIET
ENJOYMENT OR NON-INTERFERENCE OR SUITABILITY FOR ANY PARTICULAR PURPOSE, AND,
LESSEE LEASES, HIRES AND RENTS THE EQUIPMENT AS IS, WHERE IS." Lessee
understands and agrees that neither Seller, nor any agent of Seller, is an agent
of Lessor or is in any manner authorized to waive or after any term or condition
of this Lease. Lessor shall not be liable for any loss or damage suffered by
Lessor or by any other person or entity, direct or indirect or consequential,
including, but not limited to, business interruption and injury to persons or
property, resulting from non-delivery or late deliver, installation, failure or
faulty operation, condition, suitability or use of the Equipment leased by
Lessee hereunder, or for any failure of any representations, warranties or
covenants made by the Seller. Any claims of Lessee, with respect to claims
discussed in the preceding sentences, shall not be made against Lessor but shall
be made, if at all, solely and exclusively against Seller, or any persons other
than the Lessor. Lessor hereby authorizes Lessee to enforce during the term of
this Lease, in its name, but at Lessee's sole effort and expense, all
warranties, agreements or representations, if any, which may have been made by
Seller to Lessor or to Lessee, and Lessor hereby assigns to Lessee solely for
the limited purpose of making and prosecuting any such claim, all rights which
Lessor may have against Seller for breach of warranty, or other representation
respecting the Equipment.

5. Care, Transfer and Use of Equipment. Lessee, at its own expense, shall
maintain the Equipment in good operating condition, repair and appearance in
accordance with Seller's specifications and in compliance with all laws and
regulations applicable to the Equipment, Lessee and its business and shall
protect the Equipment from deterioration except for reasonable wear and tear
resulting only from proper use thereof. When generally offered with respect to
the Equipment, Lessee shall, at its expense, keep a maintenance contract in full
force and effect, throughout the term of this Lease and any Schedule hereto
unless otherwise agreed on the Schedule. The disrepair or inoperability of the
Equipment regardless of the cause thereof shall not relieve Lessee of the
obligation to pay rental hereunder. Lessee shall not make any modification,
alteration or addition to the Equipment (other than normal operating accessories
or controls). Lessee will not, and will not permit anyone other than the
authorized field engineering representatives of Seller or other maintenance
organization reasonably acceptable to Lessor to effect any inspection,
adjustment, preventative or remedial maintenance or repair to the Equipment.
Lessee may not (a) relocate or operate the Equipment at locations other than the
premises of Lessee specified in the applicable Schedule (the "Premises"), except
with Lessor's prior written consent, which shall not be unreasonably withheld if
such other location within the continental United States, or (b) SELL, CONVEY,
TRANSFER, ENCUMBER, PART WITH POSSESSION OF, OR ASSIGN ANY ITEM OF EQUIPMENT OR
ANY OF ITS RIGHTS HEREUNDER, AND ANY SUCH PURPORTED TRANSACTION SHALL BE NULL
AND VOID AND OF NO FORCE OR EFFECT. In the event of a relocation of the
Equipment or any item thereof to which Lessor consents, all costs (including any
additional property taxes or other taxes and any additional expense of insurance
coverage) resulting from any such relocation, shall be promptly paid by Lessee
upon presentation to Lessee of evidence supporting such cost. Lessor shall have
the right during normal hours upon reasonable notice to Lessee, subject to
applicable laws and regulations, to enter Lessee's Premises in order to inspect,
observe, affix labels or other markings, or to exhibit the Equipment to
prospective purchasers or future lessees thereof, or to otherwise protect
Lessor's interest therein.

6. Net Lease. THIS LEASE AND ANY SCHEDULE HERETO IS A NET LEASE, AND ALL
PAYMENTS HEREUNDER ARE NET TO LESSOR. All taxes, assessments, licenses, and
other charges (including, without limitation personal property taxes and sales
taxes, use taxes, leasing taxes and all other taxes based on gross receipts) and
penalties and interest on such taxes imposed, levied or assessed on the
ownership, possession, rental or use of the Equipment during the term of this
Lease and any Schedule hereto (except for Lessor's federal or state net income
taxes) shall be paid by Lessee when due and before the same shall become
delinquent, whether such taxes are assessed or would ordinarily be assessed
against Lessor or Lessee. To the extent possible under applicable law, for
personal property or ad valorem tax return purposes only, Lessee shall include
the Equipment on such reports and returns as may be required by local law, which
returns shall be timely filed by it. Lessee shall provide Lessor with evidence
that Lessee has complied with the foregoing provisions. In any event, Lessee
shall file all tax returns required for itself or Lessor with respect to the
Equipment and this Lease and Lessor hereby appoints Lessee as its attorney-in-
fact for such purpose. In case of failure by Lessee to so pay said taxes,
assessments, licenses or other charges, Lessor may pay all or any part of such
items, in which event the

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amount so paid, by Lessor including any interest or penalties thereon and
reasonable attorneys' fees incurred by Lessor in pursuing its rights against
Lessee or defending against any claims or defenses asserted by or through Lessee
shall be immediately paid by Lessee to Lessor as additional rental hereunder.
Lessee shall promptly pay all costs, expenses and obligations of every kind and
nature incurred in connection with the use or operation of the Equipment which
may arise or become due during the term of this Lease and any Schedule hereto,
whether or not specifically mentioned herein. In case of failure by Lessee to
comply with any provision of this Lease and any Schedule hereto, Lessor shall
have the right, but not the obligation, to effect such compliance on behalf of
Lessee. In such event, all costs and expenses incurred by Lessor in effecting
such compliance shall be immediately payable by Lessee to Lessor as additional
rental hereunder.

7.   Indemnity. Lessee shall at its expense: (i) indemnify, protect and defend
Lessor's title to the Equipment from and against all persons claiming against or
through Lessee; (ii) at all times keep the Equipment then subject to this Lease
free from any and all liens, encumbrances, attachments, levies, executions,
burdens, charges or legal process of any and every type whatsoever; (iii) give
Lessor immediate written notice of any breach of this Lease described in clause
(ii); and (iv) indemnify, protect and save Lessor harmless from any loss, cost
or expense (including reasonable attorneys' fees) caused by the Lessee's breach
of any of the provisions of this Lease, whether incurred by Lessor in pursuing
its rights against Lessee or defending against any claims or defenses asserted
by or through Lessee. Lessee shall and does hereby agree to indemnify, defend
and hold Lessor and its assigns harmless from and against any and all liability,
loss, costs, injury, damage, penalties, suits, judgements, demands, claims,
expenses and disbursements (including without limitation, reasonable attorneys'
fees incurred by Lessor in pursuing its rights against Lessee or defending
against any claims or defenses asserted by or through Lessee) of any kind
whatsoever arising out of, on account of, or in connection with this Lease and
the Equipment leased hereunder, including, without limitation, its manufacture,
selection, purchase, delivery, rejection, installation, ownership, possession,
leasing, renting, operation, control, use, maintenance and the return thereof
except for any such claims damages from Lessor's gross negligence or willful
misconduct. This indemnity shall survive the Initial Lease Term or earlier
cancellation or termination of this Lease and any Schedule hereto.

8.   Insurance. Commencing on the date that risk of loss or damage passes to
Lessor from the Seller of any Equipment covered under this Lease and continuing
until Lessee has re-delivered possession of the Equipment to Lessor, Lessee
shall, at its own expense, keep the Equipment (including all Add-on Items
thereto) insured against all risks of loss or damage from every and any cause
whatsoever in such amounts (but in no event less than the greater of the
replacement value thereof or the amount set forth in any applicable Casualty
Schedule, whichever is higher) with such deductibles and exclusions as approved
by Lessor and in such form as is reasonably satisfactory to Lessor. All such
insurance policies shall protect Lessor and Lessor's assignee(s) as loss payees
as their interests may appear. Lessee shall also, at its own expense, carry
public liability insurance, with Lessor and Lessor's assignee(s) as an
additional insured, in such amounts with such companies and in such form as is
reasonably satisfactory to Lessor, with respect to injury to person or property
resulting from or based in any way upon or in any way connected with or relating
to the installation, use or alleged use, or operation of any or all of the
Equipment, or its location or condition.

Not less than ten days prior to the Acceptance Date, Lessee shall deliver to
Lessor satisfactory evidence of such insurance and shall further deliver
evidence of renewal of each such policy not less than thirty (30) days prior to
expiration thereof. Each such policy shall contain an endorsement providing that
the insurer will give Lessor not less than thirty (30) days prior written notice
of the effective date of any alteration, change, cancellation, or modification
of such policy or the failure by Lessee to timely pay all required premiums,
costs or charges with respect thereto. Upon Lessor's request, Lessee shall cause
its insurance agent(s) to execute and deliver to Lessor Loss Payable Clause
Endorsement and Additional Insured Endorsement (bodily injury and property
damage liability insurance) forms provided to Lessee by Lessor. In case of the
failure to procure or maintain such insurance, Lessor shall have the right but
not the obligation, to obtain such insurance and any premium paid by Lessor
shall be immediately due and payable by Lessee to Lessor as additional rent
hereunder. The maintenance of any policy or policies of insurance pursuant to
this Section shall not limit any obligation or liability of Lessee pursuant to
Sections 7 or 9 or any other provision of this Lease and any Schedule hereto.

9.   Risk of Loss. Until such time as the Equipment is returned and delivered to
and accepted by Lessor at the expiration of this Lease, pursuant to the terms of
this Lease and any Schedule hereto, Lessee hereby assumes and shall bear the
entire risk of loss, damage, theft and destruction of the Equipment, or any
portion thereof, from any cause whatsoever ("Equipment Loss"). Without
limitation of the foregoing, no Equipment Loss shall relieve Lessee in any way
from its obligations hereunder. Lessee shall promptly notify, Lessor in writing
of any Equipment Loss. In the event of any such Equipment Loss, Lessee shall:
(a) in the event Lessor determines such Equipment to be repairable, promptly
place, at Lessee's expense, the Equipment in good repair, condition and working
order in accordance with Seller's specifications and to the satisfaction of
Lessor; or (b) in the event of an actual or constructive total loss of any item
of Equipment, at Lessor's option: (i) promptly replace, at Lessee's expense, the
Equipment with like equipment of the same or a later model with the same Add-on
Items as the Equipment. and in good repair, condition and working order in
accordance with the Seller's specifications and to the satisfaction of Lessor;
or (ii) immediately pay to Lessor the amount obtained by multiplying the actual
Equipment Cost as specified in the applicable Schedule by the percentage
contained in any applicable Casualty Schedule for the date of such Equipment
Loss plus, any unpaid rentals or any amounts due hereunder.

If no Casualty Schedule has been made a part of any applicable Schedule, an
amount equal to the present value of the total amount of unpaid rentals and all
other amounts due and to become due under any applicable Schedule during the
term thereof as of the date of any payment, discounted at a rate equal to
discount rate of the Federal Reserve Bank of Chicago as of the Commencement Date
of the Lease with respect to each applicable Schedule shall be paid to Lessor by
Lessee, plus an additional amount equal to the estimated fair market value of
the Equipment at the end of the Initial Lease Term applicable to such Equipment
(the "End of Term Value"). In no event shall the amount of such End of Term
Value for the Equipment be less than twenty percent (20%) of the actual cost of
the Equipment unless a purchase option is granted (or other end of term payment
is required) under this Lease for other than the fair market value of the
Equipment then the actual amount of such Purchase Option Price (or other end of
term payment) specified in the applicable Equipment Schedule shall be due and
payable to Lessor as the End of Term Value under this section or such lesser or
greater amount specified in the applicable Schedule.

In the event Lessee is required to repair or replace any such item of Equipment
pursuant to Subsections (a) or (b)(i) of the preceding sentence, the insurance
proceeds received by Lessor, if any, pursuant to Section 8, after the use of
such funds to pay any unpaid amounts then due hereunder, shall be paid to Lessee
or, if applicable, to a third party repairing or replacing the Equipment upon
Lessee's furnishing proof reasonably satisfactory to Lessor that such repair or
replacement has been completed in a reasonably satisfactory manner. In the event
Lessor elects option (b)(ii), Lessee shall be entitled to a credit against the
payment required by said Subsection in an amount equal to such insurance
proceeds actually received by Lessor pursuant to Section 8 on account of such
Equipment, and, upon payment by Lessee to Lessor of all of the sums required
pursuant to Subsection (b)(ii), the applicable Schedule shall terminate with
respect to such item of Equipment and Lessee shall be entitled to whatever
interest Lessor may have in such item AS IS, WHERE IS and WITH ALL FAULTS in its
then condition and location without warranties of any type whatsoever, express
or implied.

10.  Covenants of Lessee. Lessee agrees that its obligations under this Lease
and any Schedule hereto, including without limitation, the obligation to pay
rental, are irrevocable and absolute, shall not abate for any reason whatsoever
(including any claims against Lessor), and shall continue in full force and
effect regardless of any inability of Lessee to use the Equipment or any part
thereof for any reason whatsoever including,

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without limitation, war, act of God, storms, governmental regulations, strike or
other labor troubles, loss, damage, destruction, disrepair, obsolescence,
failure of or delay in delivery of the Equipment, or failure of the Equipment to
properly operate for any cause. In the event of any alleged claim (including a
claim which would otherwise be in the nature of a set-off) against Lessor,
Lessee shall fully perform and pay its obligations hereunder (including the
payment of all rents, without set-off or defense of XXX) and its only exclusive
recourse against Lessor shall be by a separate action. Lessee agrees to furnish
promptly to Lessor the annual financial statements of Lessee (and of any
guarantors of Lessee's performance under this Lease and any Schedule hereto),
prepared in accordance with generally accepted accounting principles and such
interim financial statements of Lessee as Lessor may reasonably require during
the entire term of this Lease and any Schedule hereto. Either independent
certified public accountants or the Lessee's chief financial officer as
requested by Lessor shall certify all such annual financial statements. Lessee,
if requested by Lessor prior to the initial purchase by Lessor of Equipment for
lease hereunder, shall provide at Lessee's expense an opinion of its counsel
acceptable to Lessor affirming the covenants, representations and warranties of
Lessee under this Lease and any Schedule hereto. So long as there are amounts
due Lessor under this Lease, Lessee shall supply Lessor with such other
financial and operating performance data as is provided to its outside investors
or commercial lenders and, if applicable, required to be provided to
shareholders by the Security and Exchange Commission, and Lessee shall
immediately notify Lessor of any material adverse change in its financial
condition or business prospects.

11. Representations and Warranties. In order to induce Lessor to enter into this
Lease and any Schedule hereto and to lease the Equipment to Lessee hereunder,
Lessee represents and warrants that: (a) Financial Statements. (i) applications,
financial statements, and reports which have been submitted by Lessee and any
Obligors (as hereinafter defined) to Lessor are, and all information hereafter
furnished by Lessee and Obligors to Lessor will be, true and correct in all
material respects as of the date submitted; (ii) as of the date hereof, the date
of any Schedule and any Acceptance Date, there has been no material adverse
change in any matter stated in such applications, financial statements and
reports; and, (iii) none of the foregoing omit or omitted to state any material
fact which would make any of the foregoing false or misleading. (b)
Organization. Lessee is an organizational entity described on the signature page
hereof and is duly organized, validly existing and is duly qualified to do
business and is in good standing or subsisting or in other similar active status
in each State in which the Equipment will be located. (c) Authority. Lessee has
full power, authority and right to execute, deliver and perform this Lease and
any Schedule hereto, and the execution, delivery and performance hereof has been
authorized by all necessary action of Lessee. (d) Enforceability. This Lease and
any Schedule or other document executed in connection therewith has been duly
executed and delivered by Lessee and any Obligor and constitutes a legal, valid
and binding obligation of Lessee and any Obligor enforceable in accordance with
its terms. (e) Consents. The execution, delivery and performance of this Lease
and any Schedule hereto does not require any approval or consent of any
stockholders, partners or proprietors or of any trustee or holders of any
indebtedness or obligations of Lessee, and will not contravene any law,
regulation, judgment or decree applicable to Lessee, or the certificate or
articles of incorporation, partnership agreement, by-laws or other governing
documents of Lessee, or contravene the provisions of, or constitute a default
under, or result in the creation of any lien upon any property of Lessee under
any mortgage, instrument or other agreement to which Lessee is a party or by
which Lessee or its assets may be bound or affected. Except as disclosed, no
authorization, approval, license, filing or registration with any court or
governmental agency or instrumentality is necessary in connection with the
execution, delivery, performance, validity and enforceability of this Lease and
any Schedule hereto. (f) Title. On each Commencement Date, Lessor shall have
good and marketable title to the items of Equipment which is subject to this
Lease and any Schedule hereto on such XXX free and clear of all liens, except
the lien of Seller which will be XXXed upon receipt of payment. Lessee warrants
that no party has a security interest in the Equipment which will not be
released on or before payment by Lessor to Seller of the Equipment and that the
Equipment is and shall at all times remain personal property regardless of how
it may be affixed to any real property. (g) Litigation. There is no action,
suit, investigation or proceeding by or before any court, arbitrator, agency or
governmental authority pending or threatened against or affecting Lessee: (i)
which involves the Equipment or the transactions contemplated by this Lease and
any Schedule hereto; or (ii) which, if adversely determined, could have a
material adverse effect on the financial condition, business or operation of
Lessee.

12. Events of Default. An event of default ("Event of Default") shall occur
hereunder if Lessee or any Obligor ("Obligor" shall include any guarantor or
surety of any obligations of Lessee to Lessor under this Lease and any Schedule
hereto): (i) fails to pay any installment of rent or other payment required
hereunder within five (5) days after its due date; or (ii) attempts to or does
remove from the Premises (except a relocation with Lessor's consent as provided
in Section 5), sell, transfer, encumber, part with possession of, or sublet any
item of the Equipment; or (iii) shall suffer or have suffered, in the reasonable
judgment of Lessor, a material adverse change in its financial condition since
the date of the last financial statements submitted to Lessor, and as a result
thereof Lessor in good faith deems itself to be insecure; or (iv) breaches or
shall have breached any representation or warranty made or given by Lessee or
Obligor in this Lease or in any other document furnished to Lessor in connection
herewith, or any such representation or warranty shall be untrue or, by reason
of failure to state a material fact or otherwise, shall be misleading or any of
the statements or other documents or information submitted at any time
heretofore or hereafter by Lessee or Obligor to Lessor shall be untrue or, by
reason of failure to state a material fact or otherwise, shall be misleading or
(v) fails to perform or observe any other covenant, condition or agreement to be
performed or observed by it hereunder, and such failure or breach shall continue
unremedied for a period of ten days after the date on which notice thereof shall
be given by Lessor to Lessee (unless such remedial action cannot be completed
within such ten day period but Lessee has in good faith commenced to remedy such
breach or failure and such remedy is in fact achieved within a time period
agreed to by Lessor): or (vi) shall become insolvent or bankrupt or make an
assignment for the benefit of creditors or consent to the appointment of a
trustee or receiver, or a trustee or receiver shall be appointed for a
substantial part of its property without its consent, or bankruptcy or
reorganization or insolvency proceeding shall be instituted by or against Lessee
or Obligor and Lessee fails to continue to pay all rentals becoming due
hereunder during the pendency of such proceedings and fails to assume this Lease
within sixty (60) days after the commencement of such proceedings; or (vii)
conveys, sells, transfers or assigns substantially all of Lessee's or Obligor's
assets or ceases doing business as a going concern, or, if a corporation, ceases
to be in good standing or files a statement of intent to dissolve, or abandons
any or all of the Equipment; or (viii) shall be in breach of or default under
any lease or other agreement at any time executed with Lessor or any other
lessor or with any lender to Lessee or Obligor such that Lessee's obligations
thereunder have been or are being accelerated.

13. Remedies. Upon the occurrence and during any continuance of an Event of
Default (the "Default Date") set forth in Section 12, Lessor may, in its sole
and absolute discretion, do any one or more of the following: (a) upon notice to
Lessee cancel all or any portion of this Lease or any Schedules executed
pursuant thereto; (b) enter Lessee's Premises and without removal of the
Equipment, render the Equipment unusable or, require Lessee to assemble the
Equipment and make it available to Lessor at a place designated by Lessor.
and/or dispose of the Equipment by sale or otherwise (all of which
determinations may be made by Lessor in its sole and absolute discretion): (c)
declare immediately due and payable all sums due and to become due hereunder for
the full term of the Lease (including any renewal or purchase obligations which
Lessee has contracted to pay); (d) with or without canceling this Lease, recover
from Lessee damages, in an amount equal to the sum of: (i) all unpaid rent and
other amounts that became due and payable on, or prior to, the Default Date,
(ii) the present value of all future rentals and other amounts described in the
Lease and not included in (i) above discounted to the Default Date at a rate
equal to the discount rate of the Federal Reserve Bank of Chicago as of the
Commencement Date of the Lease with respect to each Schedule (which discount
rate, Lessee agrees is a commercially reasonable rate which takes into account
the facts and circumstances at the time such Schedule commenced), (iii) all
commercially reasonable costs and expenses incurred by Lessor in enforcing
Lessor's rights under this Lease, or defending against any claims or defenses
asserted by or through Lessee, including but not limited to, costs of
repossession, recovery, storage, repair, sale, re-lease

                                       4
<PAGE>

and reasonable attorneys' fees, (iv) the estimated residual value of the
Equipment as of the expiration of the Lease, (v) any indemnity amount payable to
Lessor hereunder; and (vi) interest on all of the foregoing from the Default
Date until the date payment is received by Lessor at 2% per month or the highest
rate permitted by law, whichever is less; (e) exercise any other right or remedy
which may be available to it under the Uniform Commercial Code or any other
applicable law.

If Lessor elects to dispose of any Equipment recovered from the possession of
Lessee after an Event of Default, Lessor shall dispose of such Equipment in a
commercially reasonable manner. Lessor reserves the right, in its sole and
absolute discretion, to control the timing and negotiate the terms of any re-
leasing or re-sale of any or all of the Equipment at a public auction or in a
private sale, at such time, on such terms and with such notice as Lessor shall
in its sole and absolute discretion deem commercially reasonable. In such event,
without any duty on Lessor's part to effect any such re-lease or sale of the
Equipment. Lessor will credit the present value of any proceeds from such sale
or re-lease actually received and retainable by it (net of any and all costs or
expenses) discounted from the date of Lessor's receipt thereof to the Default
Date at 2 1/2 % in excess of the Prime Rate (or its equivalent) per annum in
effect at the First National Bank of Chicago on the date of such payment to the
amounts due to Lessor from Lessee under the provisions of (c), (d) and/or (e)
above. A cancellation of this Lease shall occur only upon notice by Lessor and
only as to such items of Equipment as Lessor specifically elects to cancel and
this Lease shall continue in full force and effect as to the remaining items of
Equipment, if any. If this Lease and/or any Schedule is deemed at any time to be
one intended as security, Lessee agrees that the Equipment shall secure, in
addition to the indebtedness set forth herein, any other indebtedness at any
time owing by Lessee to Lessor. No remedy referred to in this Section is
intended to be exclusive, but shall be cumulative and in addition to any other
remedy referred to above or otherwise available to Lessor at law or in equity.
No express or implied waiver by Lessor of any default shall constitute a waiver
of any other default by Lessee or a waiver of any of Lessor's rights.

14. Assignment by Lessor. LESSOR MAY (WITH OR WITHOUT NOTICE TO LESSEE) SELL,
TRANSFER, ASSIGN OR GRANT A SECURITY INTEREST IN ALL OR ANY PART OF ITS INTEREST
IN THIS LEASE, ANY SCHEDULE, ANY ITEMS OF EQUIPMENT OR ANY AMOUNT PAYABLE
HEREUNDER. In such an event, Lessee shall, upon receipt of written notice,
acknowledge any such sale, transfer, assignment or grant of a security, interest
and shall pay its obligations hereunder or amounts equal thereto to the
respective transferee, assignee or secured party in the manner specified in any
instructions received from Lessor. Notwithstanding any such sale, transfer,
assignment or grant of a security interest by Lessor and so long as no Event of
Default shall have occurred hereunder, neither Lessor nor any transferee,
assignee or secured party shall interfere with Lessee's right of use or quiet
enjoyment of the Equipment. In the event of such sale, transfer, assignment or
grant of a security interest in all or any part of this Lease and any Schedule
hereto, or in the Equipment or in sums payable hereunder, as aforesaid, Lessee
agrees to execute such documents as may be reasonably necessary to evidence,
secure and complete such sale, transfer, assignment or grant of a security
interest and to perfect the transferee's, assignee's or secured party's interest
therein (with any filing fees at Lessor's expense) and Lessee further agrees
that the rights of any transferee, assignee or secured party shall not be
subject to any defense, set-off or counterclaim that Lessee may have against
Lessor or any other party, including the Seller, which defenses, set-offs and
counterclaims shall be asserted only against such party, and that any such
transferee, assignee or secured party shall have all of Lessor's rights
hereunder, but shall assume none of Lessor's obligations hereunder. Lessee
acknowledges that any assignment or transfer by Lessor shall not materially
change Lessee's duties or obligations under this Lease and shall not materially
increase the burdens and risks imposed on Lessee.

15. Miscellaneous. All notices and demands relating hereto shall be in writing
and sent by either any nationally recognized overnight air courier or by
certified mail, return receipt requested, to Lessor or Lessee at their
respective addresses above or shown in the Schedule, or at any other address
designated by notice served in accordance herewith. Notice by overnight air
courier shall be effective one (1) business day after delivery. Notice by
certified mail shall be effective five (5) business days after deposit in the
United States mail, with proper postage prepaid, addressed to the party intended
to be served at the address designated herein. All obligations of Lessee shall
survive the termination or expiration of this Lease and any Schedule hereto. If
more than one Lessee is named in this Lease, the liability of each hereunder to
Lessor shall be joint and several. Any general partner executing this Lease on
behalf of the Lessee agrees that its liability to Lessor hereunder shall be
absolute, primary and direct, and that Lessor shall not be required to pursue
any right or remedy it may have against the Lessee under the Lease (and shall
not be required to first commence any action or obtain any judgment against
Lessee) before enforcing this liability against such general partner, and that
such general partner will, upon demand, pay Lessor the amount of all sums then
due under the Lease, the payment of which, by Lessee, is in default under the
Lease, and will, upon demand, perform all other obligations of Lessee, the
performance of which, by Lessee, is in default under the Lease. Lessee shall,
upon request of Lessor from time to time, perform all acts and execute and
deliver to Lessor all documents which Lessor deems reasonably necessary to
implement this Lease and any Schedule hereto, including, without limitation,
certificates addressed to such persons as Lessor may direct stating that this
Lease and the Schedule hereto is in full force and effect, that there are no
amendments or modifications thereto, that Lessor is not in default hereof or
breach hereunder, setting forth the date to which rentals due hereunder have
been paid, and stating such other matters as Lessor may reasonably request. This
Lease and any Schedule hereto shall be binding upon the parties and their
successors, legal representatives and assigns. Lessee's successors and assigns
shall include, without limitation, a receiver, debtor-in-possession, or trustee
of or for Lessee. If any person, firm, corporation or other entity shall
guarantee this Lease and the performance by Lessee of its obligations hereunder,
all of the terms and provisions hereof shall be duly applicable to such Obligor.

16. Conditions Precedent to Leasing. (i) Lessor shall have no obligation to
purchase any Equipment for lease to Lessee under any Schedule hereunder unless
or until acceptable documentation, the form of which will be provided by Lessor
has been executed by Lessee and delivered to Lessor: (ii) Lessor has confirmed
with Lessee that no material adverse change in Lessee's financial condition and
business prospects has occurred prior to each purchase of Equipment.

17. Invalidity. In the event that any provision of this Lease and any Schedule
hereto shall be unenforceable in whole or in part, such provision shall be
limited to the extent necessary to render the same valid, or shall be excised
from this Lease or any Schedule hereto, as circumstances may require, and this
Lease and the applicable Schedule shall be construed as if said provision had
been incorporated herein as so limited, or as if said provision had not been
included herein, as the case may be without invalidating any of the remaining
provisions hereof.

18. End of Term Options. Provided that the Lease has not been terminated and
that no Event of Default or event which, with notice or lapse of time or both,
would become an Event of Default shall have occurred and shall be continuing,
Lessee shall at the end of the Initial Lease Term of the first Schedule be
entitled to elect and to exercise one of the options, if any, indicated in the
applicable Schedule which election shall be binding on Lessee with respect to
all Schedules entered into between Lessor and Lessee under this Lease. The
foregoing options granted hereunder shall be exercised by written notice
delivered to Lessor by Lessee not more than 180 days and not less than ninety
(90) days prior to the expiration of the Initial Lease Term of the Equipment,
subject to Schedule No. 001.

19. Progress Payments. If requested by Lessee, progress payments will be made
for any amount over the Minimum Invoice Amount specified on each Progress
Payment Authorization per invoice to vendors in accordance with Lessor's
standard procedures. Unless, otherwise agreed by Lessor the minimum progress
payment amount shall not be less than the Minimum Progress Payment Amount
specified on the Progress Payment Authorization. Interim rent, on progress
payments, shall be payable from the date progress payments are made by Lessor to
the Commencement Date of the corresponding Schedule. Interim rent shall be
calculated at the daily

                                       5
<PAGE>

equivalent of the Monthly Lease Rate XXX Lessee shall deliver to Lessor a
Progress Payment Authorization, not less than 30 days prior to the due date
thereof and in a form acceptable to Lessor, to make a progress payment and,
provided on such due date no Events of Default have occurred and be continuing
hereunder or under the Lease, Lessor shall make the progress payment set forth
to the manufacturer(s) or supplier(s) as set forth in such authorization.

20. Law. This Lease and any Schedule hereto shall be binding only when accepted
by Lessor at its corporate headquarters in Illinois and shall in all respects be
governed and construed, and the rights and the liabilities of the parties hereto
determined, except for local filing requirements, in accordance with the laws of
the State of Illinois. LESSEE WAIVES TRIAL BY JURY AND SUBMITS TO THE
JURISDICTION OF THE FEDERAL DISTRICT COURT OR ANY STATE COURT LOCATED WITHIN
COOK COUNTY IN THE STATE OF ILLINOIS AND WAIVES ANY RIGHT TO ASSERT THAT ANY
ACTION INSTITUTED BY LESSOR IN ANY SUCH COURT IS IN THE IMPROPER VENUE OR SHOULD
BE TRANSFERRED TO A MORE CONVENIENT FORUM.

                                           Lessee's Initials   /s/ DE
                                                               -----------------

21. Amendments. This Lease and any Schedule hereto contain the entire agreement
between the parties with respect to the Equipment, this Lease and any Schedule
hereto and there is no agreement or understanding oral or written, which is not
set forth herein. This Lease and any Schedule hereto may not be altered,
modified, terminated or discharged except by a writing signed by the party
against whom such alteration, modification, termination or discharge is sought.

                                           Lessee's Initials   /s/ DE
                                                               -----------------

22. Lessee's Waivers. To the extent permitted by applicable law, Lessee hereby
waives any and all rights and remedies conferred upon a Lessee by Article 2A of
the Uniform Commercial Code as adopted in any jurisdiction, including but not
limited to Lessee's rights to: (i) cancel this Lease; (ii) repudiate this XXX
(iii), eject the Equipment; (iv) revoke acceptance of the Equipment; (v) recover
damages from Lessor for any breaches of warranty or for any other reason related
to the Equipment; (vi) claim a security interest in the Equipment in Lessee's
possession or control for any reason (vii) deduct all or any part of any claimed
damages resulting from Lessor's default, if any, under this Lease; (viii) accept
partial delivery of the Equipment (ix) "cover" by making any purchase or lease
of or contract to purchase or lease Equipment in substitution for those due from
Lessor; (x) recover any general, special, incidental, or consequential damages
for any reason whatsoever; and (xi) specific performance, replevin, detinue,
sequestration, claim, and delivery of the like for any Equipment identified to
this Lease. To the extent permitted by applicable law (unless expressly
otherwise agreed hereunder), Lessee also hereby waives any rights now or
hereafter conferred by statute or otherwise which may require Lessor to sell,
lease or otherwise use any Equipment in mitigation of Lessor's damages as set
forth in Paragraph 13 or which may otherwise limit or modify any of Lessor's
rights or remedies under Paragraph 13. Any action by Lessee against Lessor for
any default by Lessor under this Lease, including breach of warranty or
indemnity, shall be commenced within one (1) year after any such cause of action
accrues.

                                           Lessee's Initials   /s/ DE
                                                               -----------------

23. Counterparts. This Lease may be executed in any number of counterparts, each
of which shall be deemed an original. Each Schedule shall be executed in three
(3) serially numbered counterparts each of which shall be deemed an original but
only counterpart number 1 shall constitute "chattel paper" or "collateral"
within the meaning of the Uniform Commercial Code in any jurisdiction.

24. Addendum. ("X" if applicable) [_] See Addendum (s) attached hereto and made
a part hereof.

The person executing this Lease for and on behalf of Lessee warrants and
represents, which warranty and representation shall survive the expiration or
termination of this Lease, that this Lease and the execution hereof has been
duly and validly authorized by Lessee, constitutes a valid and binding
obligation of Lessee and that he has authority to make such execution for and on
behalf of Lessee.

IN WITNESS WHEREOF, this Lease has been executed by Lessee this _________day of
____________ 19__.

                                        ACCEPTED AT CHICAGO. ILLINOIS
PLACEWARE, INC.                         LINC CAPITAL, INC.
Lessee                                  Lessor

By: /s/ Deborah Eudaley                 By:  /s/ XXX
   ----------------------------            ------------------------------

Title: CFO                              Title:       Senior V.P.
      -------------------------               ---------------------------

Date: 5/4/99                            Date: ___________________________
      -------------------------

                                      6
<PAGE>

LINC CAPITAL, INC.                                      LINC Capital, Inc.
EQUIPMENT SCHEDULE                                      303 East Wacker Drive
SCHEDULE NO. 001                                        Chicago, Illinois 60601
DATED: May 3, 1999                                      (312) 946-I000

--------------------------------------------------------------------------------
Equipment Location:                            Master Lease Agreement No.: 7336
                                               ---------------------------------
Mountain View, CA 94043                        Estimated Acceptance Date:
--------------------------------------------------------------------------------

LINC Capital, Inc. (Lessor) hereby agrees to lease to the Lessee named below,
and Lessee hereby agrees to lease and rent from Lessor the Equipment identified
below, for the term and at the rental payments specified herein, all subject to
the terms and conditions set forth herein and on the reverse side hereof and in
the referenced Master Lease Agreement except as the same may be varied by the
terms of this Schedule.
================================================================================

--------------------------------------------------------------------------------
Equipment Description: The Equipment will consist of       Cost of Equipment:
servers, office equipment & furniture, computers and       $58,403.87
peripherals, and workstations as more fully described
on Schedule "A" attached hereto and made a part hereof.
--------------------------------------------------------------------------------

================================================================================
TERM AND RENTAL:
--------------------------------------------------------------------------------
 Commencement Date:   Initial Payment: $3691.12    Initial Lease Term: 36 months
 September 1, 1999    (covering first and last
                      lease payments.)
--------------------------------------------------------------------------------

Rental Payments* (plus, if applicable all sales, use or other taxes imposed upon
rental payments) shall be made monthly in advance as follows: $1,845.56 per
rental payment beginning on the Commencement Date until 36 rental payments have
been paid in full followed by either (i) a 37th rental payment of $8,760.58 or
(ii) provided that no Event of Default has occurred and is continuing under the
Lease in lieu of making the foregoing 37th rental payment, Lessee may elect,
by written notice issued to Lessor to pay a sum equal to $934.46 on the due date
of the 37th rental payment and a like rental payment sum on the next eleven
consecutive rental payment dates respectively and upon such election the Initial
Lease Term shall be deemed to have been extended by 12 months.

*Rental Payments are based on the Lease Rate Factor and are subject to
adjustment as described in Paragraph A on the REVERSE SIDE HEREOF. If
applicable, all freight, sales and use taxes, insurance and maintenance expense
paid by Lessor shall be paid by Lessee in accordance with the terms of the Lease
and this Schedule.
================================================================================

PROPERTY TAXES: Lessee shall report all Equipment for personal property or
advalorem tax return purposes as may be required under applicable law, which
returns shall be timely filed by Lessee and all resulting taxes shall be paid by
Lessee. Lessee agrees upon request to provide Lessor with evidence that all such
Equipment has been reported, all returns for all such taxes have been filed and
all taxes paid in a timely manner.
================================================================================

END OF TERM OPTIONS: At the end of the initial lease term the following options
are granted to Lessee in accordance with the terms described on the reverse side
hereof:

Option to Purchase not less than all of the Equipment at the end of the Initial
Lease Term (as described above including any extension thereof) at a Purchase
Option Price of $1.00.
Restocking Charge:  15 % of Total Equipment Cost
================================================================================
          ADDITIONAL TERMS AND CONDITIONS TO THIS EQUIPMENT SCHEDULE
                        ARE ON THE REVERSE SIDE HEREOF.

The person executing this Lease for and on behalf of Lessee warrants and
represents, which warranty and representation shall survive the expiration or
termination of this Lease, that this Lease and the execution hereof has been
duly and validly authorized by Lessee, constitutes a valid and binding
obligation of Lessee and that he has authority to make such execution for and on
behalf of Lessee.

                                        Accepted at Chicago, Illinois
LESSEE:  PLACEWARE, INC.                LESSOR:   LINC Capital, Inc.

      By:  /s/ Deborah Eudaley                  By: /s/ XXX
         -------------------------                 -------------------------
   Title:    CFO                             Title:   Senior V.P.
         -------------------------                 -------------------------
    Date: 8/31/99                             Date:_________________________
         -------------------------

This lease (and Equipment Schedule and Master Lease the terms of which it
incorporate) has been assigned, is subject to the security interests of, and is
held in trust for the benefit of Fleet Bank NA, as Agent, pursuant to the terms
and conditions of a security agreement dated September 28, 1994 and related
documents (as the same may be amended).

<PAGE>

               ADDITIONAL TERMS AND CONDITIONS TO EQUIPMENT SCHEDULE
               -----------------------------------------------------

A. Adjustments to Rental Payments. Rental Payments are based on a Lease Rate
Factor of 3.16% subject to adjustment as described below. The Monthly Lease Rate
Factor will be indexed to the yield for U.S. Treasury Notes maturing closest to
the date 36 months from the Commencement Date of this Equipment Schedule (the
"Index Instrument"). The yield of the Index Instrument currently 5.20% for the 6
1/2% Treasury Notes maturing as reported in the Wall Street Journal dated May 3,
1999. The Monthly Lease Rate Factor shall be adjusted by Lessor to provide for
any increase in the yield of the Index Instrument on the Commencement Date of
this Equipment Schedule. At the Commencement Date of this Equipment Schedule,
the Monthly Lease Rate Factor (as adjusted) shall be fixed for the Initial Lease
Term of this Equipment Schedule.

B. Estimated Cost of Equipment, Estimated Acceptance Date, Estimated
Commencement Date and Adjustments in Rental. As used herein, "actual cost" means
the total cost to Lessor of purchasing and delivering the Equipment to Lessee
including, subject to Lessor's consent, taxes, transportation charges and other
charges, which may be applicable. The amount of each payment set forth in the
Schedule are based on an estimate of actual cost, which estimate may, but need
not, be set forth in the Schedule, and such amounts shall be adjusted
proportionately (increased or decreased) if the actual cost of the Equipment
differs from said estimate. Lessee hereby authorizes Lessor to adjust, if
necessary, the amounts set forth in the Schedule to reflect actual cost when the
actual cost is known and to add to the amount of each rental payment any sales,
use or leasing tax that may be imposed on or measured by the rental payments.
Lessor will inform Lessee of the adjustments in rent necessary to reflect actual
cost. If the Commencement Date and Acceptance Date are "estimated" Lessee agrees
to execute a replacement Equipment Schedule setting forth the actual
Commencement Date and Acceptance Date as soon as those dates become final.

C. Initial Payment and/or Security Deposit. Lessee shall make a security deposit
and/or initial payment as indicated in this Schedule upon execution of this
Schedule and lessor shall be authorized to apply funds held by Lessor and
otherwise payable to Lessee for such purposes. Any security deposit and/or
initial payment paid by Lessee shall not be refundable to Lessee in the event
that the term of this Lease does not commence unless on account of Lessee's
rightful refusal to accept delivery of the Equipment. At Lessor's option any
security deposit and/or initial payment made hereunder may be applied by Lessor
to cure any default of Lessee under the lease, in which event Lessee shall
promptly restore the security deposit and/or initial payment to their full
amounts as set forth in this Schedule. If all the terms and conditions herein to
be performed by Lessee are fully performed and all of Lessee's obligations
hereunder are fully complied with, that portion of any security deposit not so
applied shall be refunded to Lessee at the termination or expiration of this
Lease.

  Purchase Option and/or Option for Renewal of Lease Term. [This section applies
only if this schedule indicates that an option to purchase the Equipment or an
option to renew the Lease Term is applicable.] Provided that the Lease, this
Schedule, or any option granted hereunder has not been terminated by Lessor and
that no Event of Default shall have occurred and shall be continuing, Lessor
agrees to grant Lessee an option to purchase the Equipment and/or renew the
Lease Term. See Section 18 of the Master Lease Agreement for additional terms
and conditions applicable to End of Term Options.

If an Event of Default has not occurred under the Lease, Lessee, by giving
Lessor not less than ninety (90) days written notice by registered or certified
mail prior to the expiration date of this Schedule, may, elect to (1) if
applicable, purchase not less than all of the Equipment then leased hereunder,
at the times and in the manner hereinafter specified, for an amount equal to the
Purchase Option Price stated on the face of this Schedule plus any accrued and
unpaid rental or other amounts due under the Lease and plus any applicable sales
tax with respect thereto or (2) if applicable, renew the lease term of not less
than all of the Equipment then leased hereunder for the period(s) and for the
renewal rental(s) (payable in advance) stated on the face of this Schedule. If
Lessee elects to exercise said purchase option, same shall be exercised on the
day immediately following the date of expiration of the minimum lease term, and
by the delivery at such time by Lessee to Lessor of payment, in cash or by
certified check, of the amount of the Purchase Price for the Equipment as set
forth above.

Upon payment of said purchase price for the Equipment, Lessor shall, upon
request of Lessee, execute and deliver to Lessee a Bill of Sale for the
Equipment, on an "AS IS," "WHERE IS," "WITH ALL FAULTS" basis, without
representations or warranties of any kind whatsoever. If Lessee exercises its
purchase option and fails to make such payment, Lessee shall pay as additional
rent for each month or fraction thereof after the end of the Initial Lease Term,
an amount equal to the highest monthly payment set forth herein. If Lessee does
not elect to exercise either of said options; Lessee shall return each item of
equipment to Lessor, pursuant to and under the terms and conditions of Section 3
of the Lease. If Lessee fails to notify Lessor as provided herein or if Lessor
and Lessee cannot agree on the purchase or renewal terms, then the term of this
Lease shall be automatically extended at the highest rental provided in this
Schedule, for successive three month periods unless and until terminated by
either party giving to the other not less than three months prior written notice
by registered or certified mail of its intention to terminate at the end of the
XXX succeeding extension period, and upon termination of this Schedule, Lessee
shall return all of the Equipment as provided in the Lease.

This lease (and Equipment Schedule and Master Lease the terms of which it
incorporates) has been assigned, is subject to the security interests of, and is
held in trust for the benefit of Fleet Bank NA, as Agent, pursuant to the terms
and conditions of a security agreement dated September 28, 1994 and related
documents (as the same may be amended).

                                      -2-

<PAGE>

                                  SCHEDULE A
                                      TO
                           MASTER LEASE NO. 7336-001
                                PLACEWARE, INC.
                      COMMENCEMENT DATE SEPTEMBER 1, 1999

<TABLE>
<CAPTION>
QUANTITY         EQUIPMENT DESCRIPTION                LOCATION                VENDOR               INVOICE NO.  PO NO.  SERIAL NO.
<S>          <C>                                  <C>                    <C>                       <C>          <C>     <C>
  1          Storedge Fix-Pk 72-144GB 4MMD        Mountain View, CA      Avcom Technologies, Inc.      96132
             Freight
             Taxes

  8          9.1GB7200 RPM Ultra SCSI H/D         Mountain View, CA      Avcom Technologies, Inc.      97623
             Freight
             Taxes

  1          3Com Impact IQ Ext 230.4K ISDN       Mountain View, CA      CDW Computer Cntrs, Inc.      AO43691
             Seagate 9.1 GB Ult2/SCSI HD100
             Freight

  8          550MHz PIII/MDT W/S 210 Base & Rel   Mountain View, CA      Dell                          254037914
             Freight
             Taxes

  9          Unltrastar 36XP 38GB Ultra2SCSI      Mountain View, CA      Spectrum Trading              29153A
  2          M/66-pin wide SCSI3 s.e. terminator
             Freight
             Taxes

  1          9-bay Cabinet                        Mountain View, CA      Spectrum Trading              29153
  2          Cable for 9drives, 68 pin wide conn.
  9          5.25" Wide SCSI frame + carrier
  9          DE1001-SW Hot Swap Board
  1          Load Sharing, 300W power supply
  2          M/68 pin SCSI13 to M/VHDC cable
             Freight
             Taxes

  3          Workgroup JDBC Type XX SOL Driver    Mountain View, CA      WebLogic                      2168
             Annual Support

<CAPTION>
QUANTITY         EQUIPMENT DESCRIPTION             INVOICE AMOUNT  INVOICE BREAKDOWN  DATE PAID
<S>          <C>                                   <C>             <C>                <C>
  1          Storedge Fix-Pk 72-144GB 4MMD                            2,847.00
             Freight                                                      9.91
             Taxes                                                      234.88
                                                     $ 3,091.79

  8          9.1GB7200 RPM Ultra SCSI H/D                             8,850.00
             Freight                                                     19.94
             Taxes                                                      482.63
                                                     $ 6,352.57

  1          3Com Impact IQ Ext 230.4K ISDN                             190.53
             Seagate 9.1 GB Ult2/SCSI HD100                             542.00
             Freight                                                     19.26
                                                     $   751.79

  8          550MHz PIII/MDT W/S 210 Base & Rel                       2,997.00
             Freight                                                     90.00
             Taxes                                                      254.70
                                                     $ 3,341.70

  9          Unltrastar 36XP 38GB Ultra2SCSI                         12,645.00
  2          M/66-pin wide SCSI3 s.e. terminator                         90.00
             Freight                                                     28.00
             Taxes                                                    1,050.64
                                                     $13,813.84

  1          9-bay Cabinet                                              905.00
  2          Cable for 9drives, 68 pin wide conn.                       160.00
  9          5.25" Wide SCSI frame + carrier                          1,630.00
  9          DE1001-SW Hot Swap Board                                   495.00
  1          Load Sharing, 300W power supply                            200.00
  2          M/68 pin SCSI13 to M/VHDC cable                            140.00
             Freight                                                     62.00
             Taxes                                                      282.98
                                                     $ 3,774.98

  3          Workgroup JDBC Type XX SOL Driver                        3,000.00
             Annual Support                                             800.00
</TABLE>

Lessee's Initials /s/ DE             Lessor's Initials ________    Page 1 of 3
                  -----------------
<PAGE>

                                  SCHEDULE A
                                      TO
                           MASTER LEASE NO. 7336-001
                                PLACEWARE, INC.
                      COMMENCEMENT DATE SEPTEMBER 1, 1999

<TABLE>
<CAPTION>
QUANTITY     EQUIPMENT DESCRIPTION                   LOCATION                 VENDOR                      INVOICE NO.  PO NO.
<S>          <C>                                     <C>                      <C>                         <C>          <C>
  1          CPQ Prollant 1600 512K                  Mountain View, CA        CDW Computer Cntrs, Inc.      AL09952
  1          CPQ Processor Option Kit
  2          CPQ 9.1GB 10K ROM Ultra Wide SCSI
  5          CPQ 18.2GB Plug w/u SCSI13 HD1
  2          Simple 256MB CPQ Prollant 1600
             Freight

  1          Mylex Extreme RAID 1100 PCI-UL          Mountain View, CA        CDW Computer Cntrs, Inc.      AL42534
             Freight

  1          Sendmail Pro on Solaris Processor       Mountain View, CA        Sendmail                      IVC10234
  1          Annual Support
             Shipping
             Taxes

  1          Visual Routs                            Mountain View, CA        DataMetrics                   100178
             Taxes

  1          MS Office 2000 Developer VER/C          Mountain View, CA        CDW Computer Cntrs, Inc.      AND8916
             Shipping

  1          ServletEvec 1.0 Reseller 20-IIc bndle   Mountain View, CA        New Atlanta Comm., LLC        1167

  1          Visiontek 32MB CPQ Presario 51          Mountain View, CA        CDW Computer Cntrs, Inc.      AK95554
  1          CPQ Presario 6304 6/368, 3GB
  1          INTEL Pro/100+
             Shipping

<CAPTION>
QUANTITY     EQUIPMENT DESCRIPTION                     SERIAL NO.    INVOICE AMOUNT     INVOICE BREAKDOWN   DATE PAID
<S>          <C>                                       <C>           <C>                <C>                 <C>
                                                                       $    3,600.00

  1          CPQ Prollant 1600 512K                                                            2,569.00
  1          CPQ Processor Option Kit                                                          1,329.00
  2          CPQ 9.1GB 10K ROM Ultra Wide SCSI                                                 1,378.00
  5          CPQ 18.2GB Plug w/u SCSI13 HD1                                                    5,259.00
  2          Simple 256MB CPQ Prollant 1600                                                    1,118.00
             Freight                                                                             224.08
                                                                       $   11,913.06

  1          Mylex Extreme RAID 1100 PCI-UL                                                    1,219.00
             Freight                                                                              23.37
                                                                       $    1,242.37

  1          Sendmail Pro on Solaris Processor                                                 1,298.00
  1          Annual Support                                                                      260.00
             Shipping                                                                              9.95
             Taxes                                                                               107.09
                                                                       $    1,675.04

  1          Visual Routs                                                                      2,495.00
             Taxes                                                                               205.84
                                                                       $    2,700.84

  1          MS Office 2000 Developer VER/C                                                      539.00
             Shipping                                                                             13.90
                                                                       $      552.90

  1          ServletEvec 1.0 Reseller 20-IIc bndle                                             3,900.00
                                                                       $    3,900.00

  1          Visiontek 32MB CPQ Presario 51                                                       95.00
  1          CPQ Presario 6304 6/368, 3GB                                                        596.00
  1          INTEL Pro/100+                                83.00
             Shipping                                      32.04
                                $      806.04
</TABLE>

Lessee's Initials /s/ DE              Lessor's Initials ______      Page 2 of 3
                  -----------------
<PAGE>

                                  SCHEDULE A
                                      TO
                           MASTER LEASE NO. 7336-001
                                PLACEWARE, INC.
                      COMMENCEMENT DATE SEPTEMBER 1, 1999

<TABLE>
<CAPTION>
QUANTITY     EQUIPMENT DESCRIPTION               LOCATION            VENDOR                     INVOICE NO.   PO NO.  SERIAL NO.
<S>          <C>                                 <C>                 <C>                        <C>           <C>     <C>
1            Brother PPF3750 Plain Paper Fax     Mountain View, CA   CDW Computer Cntrs, Inc.    AM44530
             Shipping

<CAPTION>
QUANTITY     EQUIPMENT DESCRIPTION             INVOICE AMOUNT  INVOICE BREAKDOWN  DATE PAID
<S>          <C>                               <C>             <C>                <C>
  1          Brother PPF3750 Plain Paper Fax                         830.00
             Shipping                                                 57.15
                                                 $    887.15

                                                 -----------
                                                 $ 58,403.87
</TABLE>

             A more specific equipment description is included on the attached
             invoices

             Location:
             201 Ravendale Drive
             Mountain View, CA 94043-5216

             "Some or all of the Equipment is located at the locations described
             on this Schedule A"

Lessee's Initials /s/ DE              Lessor's Initials ______       Page 3 of 3
                  -----------------
<PAGE>

                                 BILL OF SALE
                              Lease No. 7336-001
                           (See Attached Schedule A)

KNOW ALL PEOPLE BY THESE PRESENTS, that PlaceWare, Inc., a California
corporation; having its principal office and place of business at 201 Ravendale,
Mountain View, CA 94043, (herein, the "Seller"), for and in consideration of the
sum of Ten Dollars ($10.00) and other good and valuable consideration received
from LINC CAPITAL, INC. having its principal office and place of business at 303
East Wacker Drive, Suite 1000, Chicago, Illinois 60601 (herein, the "Buyer"),
the receipt and sufficiency of which is hereby acknowledged, has bargained,
sold, transferred, assigned, set over and conveyed, and by these presents does
bargain, sell, transfer, assign, set over and convey unto the Buyer, its
successors and assigns, the personal property described in Schedule A attached
hereto (the "Equipment"), TO HAVE AND TO HOLD the Equipment unto the Buyer, its
successors and assigns, to its and their own use and behalf forever.

Seller hereby represents and warrants to Buyer that Seller is the absolute owner
of the Equipment, that the Equipment is free and clear of all liens, charges and
encumbrances and that Seller has full right, power and authority to sell the
Equipment and to make this Bill of Sale. Seller hereby represents, warrants and
covenants to and with Buyer on the date hereof that: (1) Seller has full power,
authority and legal right to make and perform its obligations under this Bill of
Sale; and the execution, delivery and performance thereof have been duly
authorized by all necessary actions on the part of Seller, and do not require
any approval or consent of any equity interest holders of Seller or any trustee
or holder or any indebtedness or obligation of Seller or such required approval
and consents have heretofore been duly obtained by Seller; (2) the execution,
delivery and making of this Bill of Sale by Seller does not contravene any law,
governmental rule, regulation, order or ordinance of any governmental entity
having jurisdiction over this matter; (3) the execution and delivery of this
Bill of Sale does not contravene any provision of any internal organizational
instruments of Seller including any applicable Certificate of Incorporation or
Bylaws, Certificate of Limited Partnership, and does not and will not result in
any breach of or constitute a default under any indenture, mortgage, contract,
agreement or instrument to which Seller is a party or by which it or its
property is bound; (4) the obligations set forth in this Bill of Sale are valid
and binding obligations, enforceable in accordance with their terms against
Seller, except as such enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditor's rights or general principles of
equity; (5) ALL SALES, TRANSFER, FRANCHISE OR SIMILAR TAXES IMPOSED UPON SELLER
IN CONNECTION WITH THE ACQUISITION OF THE EQUIPMENT BY SELLER FROM ITS SUPPLIERS
WILL HAVE BEEN PAID ON THE DATE HEREOF AND ALL SUCH TAXES DUE WITH RESPECT TO
THE EXECUTION AND DELIVERY OF THIS BILL OF SALE WILL BE PAID BY SELLER AND
SELLER AGREES TO PROVIDE BUYER WITH EVIDENCE THAT ALL SUCH SALES TAXES HAVE BEEN
PAID; (6) there are no pending or, to the knowledge of Seller, threatened
actions or proceedings before any court or administrative agency which will
materially adversely affect the condition, business or operation of Seller or
the ability of Seller to perform its obligations under this Bill of Sale; and
(7) Seller will make appropriate notations on its books and records indicating
the sale of Equipment to Buyer pursuant to this Bill of Sale.

Seller hereby further covenants with Buyer that: (1) Seller shall pay or obtain,
as the case may be, when due, all sales, use, property or other taxes (other
than taxes based on the net income
<PAGE>

of Buyer), licenses, tolls, inspection or other fees, bonds, permits or
certificates now or hereafter imposed by or required to be paid or obtained to
or from any jurisdiction in connection with the sale of the Equipment by Seller
to Buyer; (2) Seller hereby assigns to Buyer all warranties and representations
of the manufacturer(s) of the Equipment or suppliers of the Equipment to Seller,
to the extent assignable and to the extent such warranties and representations
are not assignable, Seller agrees to enforce such representations and warranties
for the benefit of Buyer; (3) Seller hereby covenants that with respect to any
item of Equipment at the time of sale to Buyer that is subject to the lien of
any third party claiming through Seller, Seller shall obtain the written
agreement of such third parties to release all such said liens; and (4) Seller
hereby agrees to indemnify Buyer and protect, defend and hold it harmless from
and against any and all loss, cost, damage, injury or expense, including without
limitation, reasonable attorney's fees wheresoever and howsoever arising which
Buyer may incur by reason of any material breach by Seller of any of the
representations by, or obligations of Seller set forth herein.

EXCEPT AS SPECIFICALLY SET FORTH IN A SEPARATE AGREEMENT OR IN THIS BILL OF SALE
THERE ARE NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, CONCERNING THE EQUIPMENT, ITS CONDITION, ITS FITNESS FOR A PARTICULAR
PURPOSE, OR ITS MERCHANTABILITY.

Seller, for itself and its successors and assigns further covenants and agrees
to do, execute and deliver, or to cause to be done, executed and delivered, all
such further acts, transfers and assurances, for the better assuring, conveying
and confirming unto Buyer and its successors and assigns, all and singular, the
Equipment hereby bargained, sold, assigned, transferred, set over and conveyed,
as Buyer and its successors and assigns shall request.

This Bill of Sale and the representations, warranties, and covenants herein
contained shall inure to the benefit of Buyer and its successors and assigns,
shall-be binding upon Seller and its successors, assigns and transferees, and
shall survive the execution and delivery hereof.

IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed as of
______________, 19__ by its duly authorized officers or representatives.

                                        Accepted in Chicago, IL by:

SELLER: PlaceWare, Inc.                 BUYER: LINC Capital, Inc.

    By:  /s/ Deborah Eudaley               By:  /s/ XXX
        ---------------------------            ----------------------------
  Name:      Deborah Euadaley             Name:     XXX
        ---------------------------            ----------------------------
 Title:         CFO                     Title:      Senior V.P.
        ---------------------------            ----------------------------
<PAGE>

                          (FOR REVIEW PURPOSES ONLY)

                          SCHEDULE A to BILL OF SALE
                          --------------------------

                                    Between
                         PlaceWare, Inc. (as "Seller")
                                      and
                        LINC Capital, Inc. (as "Buyer")

Lease No. 7336-001

Attached hereto is the Schedule of personal property constituting the Equipment
which is the subject matter of the Bill of Sale between Seller and Buyer.

                            See Attached Schedule A

SELLER:                         PlaceWare, Inc.

    By:  /s/ Deborah Eudaley
        ----------------------------
  Name:      Deborah Eudaley
        ----------------------------
 Title:          CFO
        ----------------------------
<PAGE>

                                  SCHEDULE A
                                      TO
                           MASTER LEASE NO. 7336-001
                                PLACEWARE, INC.
                      COMMENCEMENT DATE SEPTEMBER 1, 1999

<TABLE>
<CAPTION>
QUANTITY       EQUIPMENT DESCRIPTION                LOCATION                 VENDOR               INVOICE NO.   PO NO.  SERIAL NO.
<S>       <C>                                    <C>                   <C>                        <C>           <C>     <C>
    1     Storedge Fix-Pk 72-144GB 4MMD          Mountain View, CA     Avcom Technologies, Inc.       96132
          Freight
          Taxes

    8     9.1GB7200 RPM Ultra SCSI H/D           Mountain View, CA     Avcom Technologies, Inc.       97623
          Freight
          Taxes

    1     3Com Impact IQ Ext 230.4K ISDN         Mountain View, CA     CDW Computer Cntrs, Inc.     AO43691
          Seagate 9.1 GB Ult2/SCSI HD100
          Freight

    8     550MHz PIII/MDT W/S 210 Base & Rel     Mountain View, CA     Dell                         254037914
          Freight
          Taxes

    9     Unltrastar 36XP 38GB Ultra2SCSI        Mountain View, CA     Spectrum Trading              29153A
    2     M/66-pin wide SCSI3 s.e. terminator
          Freight
          Taxes

    1     9-bay Cabinet                          Mountain View, CA     Spectrum Trading               29153
    2     Cable for 9drives, 68 pin wide conn.
    9     5.25" Wide SCSI frame + carrier
    9     DE1001-SW Hot Swap Board
    1     Load Sharing, 300W power supply
    2     M/68 pin SCSI13 to M/VHDC cable
          Freight
          Taxes

    3     Workgroup JDBC Type XX SOL Driver      Mountain View, CA     WebLogic                        2168
          Annual Support

<CAPTION>
                                                      INVOICE        INVOICE        DATE
QUANTITY       EQUIPMENT DESCRIPTION                  AMOUNT        BREAKDOWN       PAID
<S>       <C>                                       <C>             <C>             <C>
    1     Storedge Fix-Pk 72-144GB 4MMD                              2,847.00
          Freight                                                        9.91
          Taxes                                                        234.88
                                                   $ 3,091.79

    8     9.1GB7200 RPM Ultra SCSI H/D                               8,850.00
          Freight                                                       19.94
          Taxes                                                        482.63
                                                   $ 6,352.57

    1     3Com Impact IQ Ext 230.4K ISDN                               190.53
          Seagate 9.1 GB Ult2/SCSI HD100                               542.00
          Freight                                                       19.26

                                                   $   751.79
    8     550MHz PIII/MDT W/S 210 Base & Rel                         2,997.00
          Freight                                                       90.00
          Taxes                                                        254.70
                                                   $ 3,341.70

    9     Unltrastar 36XP 38GB Ultra2SCSI                           12,645.00
    2     M/66-pin wide SCSI3 s.e. terminator                           90.00
          Freight                                                       28.00
          Taxes                                                      1,050.64

                                                   $13,813.84

    1     9-bay Cabinet                                                905.00
    2     Cable for 9drives, 68 pin wide conn.                         160.00
    9     5.25" Wide SCSI frame + carrier                            1,630.00
    9     DE1001-SW Hot Swap Board                                     495.00
    1     Load Sharing, 300W power supply                              200.00
    2     M/68 pin SCSI13 to M/VHDC cable                              140.00
          Freight                                                       62.00
          Taxes                                                        282.98
                                                   $ 3,774.98

    3     Workgroup JDBC Type XX SOL Driver                          3,000.00
          Annual Support                                               800.00
</TABLE>

Lessee's Initials__________          Lessor's_________               Page 1 of 3
<PAGE>

                                   SCHEDULE A
                                       TO
                           MASTER LEASE NO. 7336-001
                                PLACEWARE, INC.
                      COMMENCEMENT DATE SEPTEMBER 1, 1999

<TABLE>
<CAPTION>
QUANTITY      EQUIPMENT DESCRIPTION                 LOCATION                  VENDOR             INVOICE NO.    PO NO.   SERIAL NO.
<S>       <C>                                    <C>                   <C>                       <C>            <C>      <C>
   1      CPQ Prollant 1600 512K                 Mountain View, CA     CDW Computer Cntrs, Inc.    AL09952
   1      CPQ Processor Option Kit
   2      CPQ 9.1GB 10K ROM Ultra Wide SCSI
   5      CPQ 18.2GB Plug w/u SCSI13 HD1
   2      Simple 256MB CPQ Prollant 1600
          Freight

   1      Mylex Extreme RAID 1100 PCI-UL         Mountain View, CA     CDW Computer Cntrs, Inc.    AL42534
          Freight

   1      Sendmail Pro on Solaris Processor      Mountain View, CA            Sendmail             IVC10234
   1      Annual Support
          Shipping
          Taxes

   1      Visual Routs                           Mountain View, CA           DataMetrics            100178
          Taxes

   1      MS Office 2000 Developer VER/C         Mountain View, CA     CDW Computer Cntrs, Inc.    AND8916
          Shipping

   1      ServletEvec 1.0 Reseller 20-IIc bndle  Mountain View, CA     New Atlanta Comm., LLC        1167

   1      Visiontek 32MB CPQ Presario 51         Mountain View, CA     CDW Computer Cntrs, Inc.    AK95554
   1      CPQ Presario 6304 6/368, 3GB
   1      INTEL Pro/100+
          Shipping

<CAPTION>
                                                       INVOICE         INVOICE       DATE
QUANTITY      EQUIPMENT DESCRIPTION                     AMOUNT        BREAKDOWN      PAID
<S>       <C>                                       <C>               <C>            <C>
                                                    $ 3,600.00
   1      CPQ Prollant 1600 512K                                       2,569.00
   1      CPQ Processor Option Kit                                     1,329.00
   2      CPQ 9.1GB 10K ROM Ultra Wide SCSI                            1,378.00
   5      CPQ 18.2GB Plug w/u SCSI13 HD1                               5,259.00
   2      Simple 256MB CPQ Prollant 1600                               1,118.00
          Freight                                                        224.08
                                                    $11,913.06

   1      Mylex Extreme RAID 1100 PCI-UL                               1,219.00
          Freight                                                         23.37
                                                    $ 1,242.37

   1      Sendmail Pro on Solaris Processor                            1,298.00
   1      Annual Support                                                 260.00
          Shipping                                                         9.95
          Taxes                                                          107.09
                                                    $ 1,675.04

   1      Visual Routs                                                 2,495.00
          Taxes                                                          205.84
                                                    $ 2,700.84

   1      MS Office 2000 Developer VER/C                                 539.00
          Shipping                                                        13.90

                                                    $   552.90
   1      ServletEvec 1.0 Reseller 20-IIc bndle                        3,900.00

                                                    $ 3,900.00

   1      Visiontek 32MB CPQ Presario 51                                  95.00
   1      CPQ Presario 6304 6/368, 3GB                                   596.00
   1      INTEL Pro/100+                                                  83.00
          Shipping                                                        32.04

                                                    $   806.04
</TABLE>

Lessee's Initials__________          Lessor's_________               Page 2 of 3
<PAGE>

                                   SCHEDULE A
                                       TO
                           MASTER LEASE NO. 7336-001
                                PLACEWARE, INC.
                      COMMENCEMENT DATE SEPTEMBER 1, 1999

<TABLE>
<CAPTION>
QUANTITY          EQUIPMENT DESCRIPTION             LOCATION                  VENDOR               INVOICE NO.  PO NO.  SERIAL NO.
<S>         <C>                                  <C>                   <C>                         <C>          <C>     <C>
   1        Brother PPF3750 Plain Paper Fax      Mountain View, CA     CDQ Computer Cntrs, Inc.      AM44530
            Shipping

<CAPTION>
                                                 INVOICE       INVOICE       DATE
QUANTITY          EQUIPMENT DESCRIPTION           AMOUNT      BREAKDOWN      PAID
<S>         <C>                               <C>             <C>            <C>
   1        Brother PPF3750 Plain Paper Fax                      830.00
            Shipping                                              57.15
                                                 $887.15
                                              ----------
                                              $58,403.87
</TABLE>

            A more specific equipment description is included on the attached
            invoices

            Location:
            201 Ravendale Drive
            Mountain View, CA 94043-5216

            "Some or all of the Equipment is located at the locations described
            on this Schedule A"

Lessee's Initials__________          Lessor's_________               Page 3 of 3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}]]