Document:

skrats_iane.pdf -- Converted by SECPublisher 4.0, created by BCL Technologies Inc., for SEC Filing

 

 

 

 

THIRD AMENDED AND RESTATED
LOAN
AND SECURITY AGREEMENT

LOGICVISION, INC.

 

 

 

 

THIRD AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT

This THIRD AMENDED AND RESATED LOAN AND
SECURITY AGREEMENT is entered into as of April 24, 2009, by and between Comerica
Bank (“Bank”) and LogicVision, Inc. (“Borrower”).

RECITALS

Borrower and Bank are parties to that
certain Second Amended and Restated Loan Agreement dated as of February 9, 2004,
as it may be amended from time to time, including without limitation, by that
certain First Amendment to Second Amended and Restated Loan Agreement dated as
of December 29, 2004, that certain Second Amendment to Second Amended and
Restated Loan Agreement dated as of January 31, 2005, that certain Third
Amendment to Second Amended and Restated Loan Agreement dated as of February 9,
2006, that certain Fourth Amendment to Second Amended and Restated Loan
Agreement dated as of February 28, 2007, that certain Fifth Amendment to Second
Amended and Restated Loan Agreement dated as of February 14, 2008, that certain
Sixth Amendment to Second Amended and Restated Loan Agreement dated as of March
27, 2009 and that certain Seventh Amendment to Second Amended and Restated Loan
Agreement dated as of March 30, 2009 (collectively, the “Original
Agreement”).

Borrower and Bank wish to amend and
restate the terms of the Original Agreement. 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, all capitalized terms shall have the definitions set
      forth on Exhibit A. Any term used in the Code and not defined herein shall
      have the meaning given to the term in the Code.
		         
    	
	 	1.2	Accounting Terms. Any
      accounting term not specifically defined on Exhibit A shall be construed
      in accordance with GAAP and all calculations shall be made in accordance
      with GAAP. The term “financial statements” shall include the accompanying
      notes and schedules.
	 
	2.	LOAN AND
      TERMS OF PAYMENT.
	 
	 	2.1	Credit
      Extensions. 
	 
	 	 	(a)	Promise to Pay.
      Borrower promises to pay to Bank, in lawful money of the United States of
      America, the aggregate unpaid principal amount of all Credit Extensions
      made by Bank to Borrower, together with interest on the unpaid principal
      amount of such Credit Extensions at rates in accordance with the terms
      hereof. 
			          	
	 	 	(b)	Advances Under
      Revolving Line. 
	 
	 	 	 	
      (i) Amount. Subject to and upon the terms and conditions of
      this Agreement, Borrower may request Advances (A) during the Borrowing
      Base Period, in an aggregate outstanding amount not to exceed the lesser
      of (i) the Revolving Line or (ii) the Borrowing Base, less any amounts
      outstanding under the Letter of Credit Sublimit and the Credit Card
      Services Sublimit and (B) during a Non-Borrowing Base Period, in an
      aggregate outstanding amount not to exceed the Revolving Line, less any
      amounts outstanding under the Letter of Credit Sublimit and the Credit
      Card Services Sublimit. Subject to and upon
      the terms and conditions of this Agreement, amounts borrowed pursuant to
      this Section 2.1(b) may be repaid and reborrowed at any time prior to the
      Revolving Maturity Date, at which time all Advances under this Section
      2.1(b) shall be immediately due and payable. Borrower may prepay any
      Advances without penalty or
premium.

 

	          	          	          	
           As
      used in this Agreement, “Borrowing Base Period” means any time the
      aggregate outstanding amount of Advances exceeds $1,000,000 and
      “Non.-Borrowing Base Period” means any time that the aggregate outstanding
      amount of Advances is $1,000,000 or less. Borrower agrees that before
      requesting any Advance that would cause the aggregate amount of
      outstanding Advances to exceed $1,000,000, Borrower will give Bank 5
      Business Days notice accompanied by a Borrowing Base Certificate dated as
      of the end of the most recently ended month as provided in Section
      6.2(a).

      (ii) Form of Request.
      Whenever Borrower desires an Advance, Borrower will notify Bank by
      facsimile transmission or telephone no later than 3:00 p.m. Pacific time
      (1:00 p.m. Pacific time for wire transfers), 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 C. 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 or loss suffered by Bank as a result of such reliance. Bank will
      credit the amount of Advances made under this Section 2.1(b) to Borrower’s
      deposit account.

      (iii) Letter of Credit Sublimit. Subject to the availability under the Revolving Line,
      and in reliance on the representations and warranties of Borrower set
      forth herein, at any time and from time to time from the date hereof
      through the Business Day immediately prior to the Revolving Maturity Date,
      Bank shall issue for the account of Borrower such Letters of Credit as
      Borrower may request by delivering to Bank a duly executed letter of
      credit application on Bank’s standard form; provided, however, that the
      outstanding and undrawn amounts under all such Letters of Credit (i) shall
      not at any time exceed the Letter of Credit Sublimit, and (ii) shall be
      deemed to constitute Advances for the purpose of calculating availability
      under the Revolving Line. Any drawn but unreimbursed amounts under any
      Letters of Credit shall be charged as Advances against the Revolving Line.
      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 application and letter of credit agreement. Borrower will pay
      any standard issuance and other fees that Bank notifies Borrower it will
      charge for issuing and processing Letters of Credit.

      (iv) Foreign Exchange Sublimit. Subject to and upon the terms and conditions of this
      Agreement and any other agreement that Borrower may enter into with the
      Bank in connection with foreign exchange transactions (“FX Contracts”),
      Borrower may request Bank to enter into FX Contracts with Borrower due not
      later than the Revolving Maturity Date. Borrower shall pay any standard
      issuance and other fees that Bank notifies Borrower will be charged for
      issuing and processing FX Contracts for Borrower. The FX Amount shall at
      all times be equal to or less than Two Hundred Thousand Dollars
      ($200,000). The “FX Amount” shall equal the amount determined by
      multiplying (i) the aggregate amount, in United States Dollars, of FX
      Contracts between Borrower and Bank remaining outstanding as of any date
      of determination by (ii) the applicable Foreign Exchange Reserve
      Percentage as of such date. The “Foreign Exchange Reserve Percentage”
      shall be a percentage as determined by Bank, in its sole discretion from
      time to time.

2

		          	          	          	 
		 	 	(v)
      Collateralization of Obligations Extending Beyond Maturity. If
      Borrower has not secured to Bank’s satisfaction its obligations with
      respect to any Letters of Credit or Foreign Exchange Contracts by the
      Revolving Maturity Date, then, effective as of such date, the balance in
      any deposit accounts held by Bank and the certificates of deposit or time
      deposit accounts issued by Bank in Borrower’s name (and any interest paid
      thereon or proceeds thereof, including any amounts payable upon the
      maturity or liquidation of such certificates or accounts), shall
      automatically secure such obligations to the extent of the then continuing
      or outstanding and undrawn Letters of Credit or Foreign Exchange
      Contracts. Borrower authorizes Bank to hold such balances in pledge and to
      decline to honor any drafts thereon or any requests by Borrower or any
      other Person to pay or otherwise transfer any part of such balances for so
      long as the Letters of Credit or Foreign Exchange Contracts are
      outstanding or continue. 
		 
		2.2	Overadvances. If the aggregate amount of the outstanding
      Advances, plus aggregate amount of outstanding and undrawn Letters of
      Credit, plus the aggregate amount outstanding under the Foreign Exchange
      Sublimit exceeds the lesser of the Revolving Line or the Borrowing Base at
      any time, 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, as
      set forth in the LIBOR Addendum to Loan and Security Agreement attached as
      Exhibit F (“LIBOR Addendum”).
	          	          	          	          	 
		 	(b)	Late Fee;
      Default Rate. If any payment is not made within 10 days after the date
      such payment is due, Borrower shall pay Bank a late fee equal to the
      lesser of (i) 5% of the amount of such unpaid amount or (ii) the maximum
      amount permitted to be charged under applicable law. All Obligations shall
      bear interest, from and after the occurrence and during the continuance of
      an Event of Default, at a rate equal to 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
      third Business Day of each month during the term hereof. 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
      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. 
		 
		 	(d)	Computation. In the event the Daily Adjusting LIBOR Rate or,
      to the extent applicable, the Prime-based Rate, is changed from time to
      time hereafter, the applicable rate of interest hereunder shall be
      increased or decreased, effective as of the day the Daily Adjusting LIBOR
      Rate or, to the extent applicable, the Prime-based Rate is changed, by an
      amount equal to such change in the Daily Adjusting LIBOR Rate or, to the
      extent applicable, the Prime-based Rate. All interest chargeable under the
      Loan Documents shall be computed on the basis of a 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 or
      Obligation as Borrower specifies, except that to the extent Borrower uses
      the Advances to purchase Collateral, Borrower’s repayment of the Advances
      shall apply on a “first-in-first-out” basis so that the portion of the
      Advances used to purchase a particular item of Collateral shall be paid in
      the chronological order the Borrower purchased the Collateral. After the
      occurrence of an Event of Default, Bank shall have the
      right, in its sole discretion, to immediately apply any wire transfer of
      funds, check, or other item of payment Bank may receive to conditionally
      reduce Obligations, but such applications of funds 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 Pacific 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.

3

	 	2.5	Fees.
      Borrower shall pay to Bank the following: 
	 
	 	 	(a)	Facility Fee.
      On the Closing Date, a fee equal to $7,000, which shall be nonrefundable;
      
	 
	 	 	(b)	Unused Fee. A
      fee equal to 0.10% per annum of the difference between (i) the amount then
      available under the Revolving Line pursuant to section 2.1(b)(i), and (ii)
      the average daily balance outstanding during the term hereof, paid
      quarterly in arrears, which shall be nonrefundable. The unused fee shall
      be calculated based on a year of 360 days for the actual number of days
      elapsed; and 
	 
	 	 	(c)	Bank Expenses.
      On the Closing Date, all Bank Expenses incurred through the Closing Date,
      and, after the Closing Date, all Bank Expenses, as and when they become
      due. 
	 
	 	2.6	Term.
      This Agreement shall become effective on the Closing Date and, subject to
      Section 13.7, shall continue in full force and effect for so long as any
      Obligations remain outstanding or Bank has any obligation to make Credit
      Extensions under this Agreement. 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. 
	 
	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)	an officer’s
      certificate of Borrower with respect to incumbency and resolutions
      authorizing the execution and delivery of this Agreement; 
	 
	 	 	(c)	a financing statement
      (Form UCC-1) naming Borrower as debtor; 
	 
	 	 	(d)	an intellectual
      property security agreement; 
	 
	 	 	(e)	agreement to furnish
      insurance; 
	 
	 	 	(f)	payment of the fees
      and Bank Expenses then due specified in Section 2.5; 
	 
	 	 	(g)	current SOS Reports
      indicating that except for Permitted Liens, there are no other security
      interests or Liens of record in the Collateral;

4

			(h)	current financial statements, including company prepared
      consolidated and consolidating balance sheets and income statements for
      the most recently ended month in accordance with Section 6.2, and such
      other updated financial information as Bank may reasonably request;
				 
	 	 	(i)	current Compliance Certificate in
      accordance with Section 6.2; and 
	 
	 	 	(j)	such other documents or
      certificates, and completion of such other matters, as Bank may reasonably
      deem necessary or appropriate. 
	 
	 	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; and 
	 
	 	 	(b)	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 exist after giving effect to 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 referred to
      in this Section 3.2. 
	             
    	             
    	             
    	
	4.	CREATION OF SECURITY
      INTEREST.
		 	
	 	4.1	Grant of Security
      Interest. Borrower grants and
      pledges to Bank a continuing security interest in the Collateral to secure
      prompt repayment of any and all Obligations and 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 later-acquired Collateral. Notwithstanding any termination,
      Bank’s Lien on the Collateral shall remain in effect for so long as any
      Obligations are outstanding. 
	 
	 	4.2	Perfection of
      Security Interest. Borrower
      authorizes Bank to file at any time financing statements, continuation
      statements, and amendments thereto that (i) either specifically describe
      the Collateral or describe the Collateral as all assets of Borrower of the
      kind pledged hereunder, and (ii) contain any other information required by
      the Code for the sufficiency of filing office acceptance of any financing
      statement, continuation statement, or amendment, including whether
      Borrower is an organization, the type of organization and any
      organizational identification number issued to Borrower, if applicable.
      Any such financing statements may be signed by Bank on behalf of Borrower,
      as provided in the Code, and may be filed at any time in any jurisdiction
      whether or not Revised Article 9 of the Code is then in effect in that
      jurisdiction. Borrower shall from time to time endorse and deliver to
      Bank, at the request of Bank, all Negotiable Collateral and other
      documents that Bank may reasonably request, in form 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. Borrower shall have possession of
      the Collateral, except where expressly otherwise provided in this
      Agreement or where Bank chooses to perfect its security interest by
      possession in addition to the filing of a financing statement.
      Where Collateral is in possession of a third party bailee, Borrower shall
      take such steps as Bank reasonably requests for Bank to (i) obtain an
      acknowledgment, in form and substance satisfactory to Bank, of the bailee
      that the bailee holds such Collateral for the benefit of Bank, (ii) obtain
      “control” of any Collateral consisting of investment property, deposit
      accounts, letter-of-credit rights or electronic chattel paper (as such
      items and the term “control” are defined in Revised Article 9 of the Code)
      by causing the securities intermediary or depositary institution or
      issuing bank to execute a control agreement in form and substance
      satisfactory to Bank. Borrower will not create any chattel paper without
      placing a legend on the chattel paper acceptable to Bank indicating that
      Bank has a security interest in the chattel paper. Borrower from time to
      time may deposit with Bank specific cash collateral to secure specific
      Obligations; Borrower authorizes Bank to hold such specific balances in
      pledge and to decline to honor any drafts thereon or any request by
      Borrower or any other Person to pay or otherwise transfer any part of such
      balances for so long as the specific Obligations are
  outstanding.

5

	 	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
      twice 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 under the laws of the state in
      which it is incorporated and qualified and licensed to do business in any
      state in which the conduct of its business or its ownership of property
      requires that it be so qualified, except where the failure to do so would
      not reasonably be expected to cause a Material Adverse Effect.
  
	             
    	             
    	
	 	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 Certificate
      of Incorporation or Bylaws, nor will they constitute an event of default
      under any material agreement by which Borrower is bound. Borrower is not
      in default under any agreement by which it is bound, except to the extent
      such default would not reasonably be expected to cause a Material Adverse
      Effect. 
	 
	 	5.3	Collateral. Borrower has rights in or the power to
      transfer the Collateral, and its title to the Collateral is free and clear
      of Liens, adverse claims, and restrictions on transfer or pledge except
      for Permitted Liens. All Collateral is located solely in the Collateral
      States. The Eligible Accounts are bona fide existing obligations. The
      property or services giving rise to such Eligible Accounts has been
      delivered or rendered to the account debtor or its 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 whose accounts are included in any Borrowing Base
      Certificate as an Eligible Account. All Inventory is in all material
      respects of good and merchantable quality, free from all material defects,
      except for Inventory for which adequate reserves have been made. Except as
      set forth in the Schedule, none of the Collateral is maintained or
      invested with a Person other than Bank or Bank’s Affiliates. 
	 
	 	5.4	Intellectual Property
      Collateral. Borrower is the sole
      owner of the Intellectual Property Collateral, except for licenses granted
      by Borrower to its customers in the ordinary course of business. To the
      best of Borrower’s knowledge, each of the Copyrights, Trademarks and
      Patents is valid and enforceable, and no part of the Intellectual Property
      Collateral has been judged invalid or unenforceable, in whole or in part,
      and no claim has been made to Borrower that any part of the Intellectual
      Property Collateral violates the rights of any third party except to the
      extent such claim would not reasonably be expected to cause a Material
      Adverse Effect. Except as set forth in the Schedule, Borrower’s rights as
      a licensee of intellectual property do not give rise to more than 5% of
      its gross revenue in any given month, including without limitation revenue
      derived from the sale, licensing, rendering or disposition of any product
      or service. 

6

		5.5	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, and its exact
      legal name is as set forth in the first paragraph of this Agreement. The
      chief executive office of Borrower is located in the Chief Executive
      Office State at the address indicated in Section 10 hereof. 
		 
		5.6	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 a likely
      adverse decision would reasonably be expected to have a Material Adverse
      Effect. 
		 
		5.7	No Material Adverse Change in
      Financial Statements. All
      consolidated and consolidating financial statements related to Borrower
      and any Subsidiary that are delivered by Borrower to Bank fairly present
      in all material respects Borrower’s consolidated and consolidating
      financial condition as of the date thereof and Borrower’s consolidated and
      consolidating results of operations for the period then ended. There has
      not been a material adverse change in the consolidated or in the
      consolidating financial condition of Borrower since the date of the most
      recent of such financial statements submitted to Bank. 
		 
		5.8	Solvency, Payment of
      Debts. Borrower is able to pay
      its debts (including trade debts) as they mature; the fair saleable value
      of Borrower’s assets (including goodwill minus disposition costs) exceeds
      the fair value of its liabilities; and Borrower is not left with
      unreasonably small capital after the transactions contemplated by this
      Agreement. 
	             
    	             
    	
		5.9	Compliance with Laws and
      Regulations. Borrower and each
      Subsidiary have met the minimum funding requirements 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 T and U of the Board of Governors of the Federal Reserve
      System). Borrower has complied in all material respects with all the
      provisions of the Federal Fair Labor Standards Act. Borrower is in
      compliance with all environmental laws, regulations and ordinances except
      where the failure to comply is not reasonably likely to have a Material
      Adverse Effect. Borrower has not violated any statutes, laws, ordinances
      or rules applicable to it, the violation of which would reasonably be
      expected to have a Material Adverse Effect. Borrower and each Subsidiary
      have filed or caused to be filed all tax returns required to be filed, and
      have paid, or have made adequate provision for the payment of, all taxes
      reflected therein except those being contested in good faith with adequate
      reserves under GAAP or where the failure to file such returns or pay such
      taxes would not reasonably be expected to have a Material Adverse
      Effect.
		 	
		5.10	Subsidiaries. Borrower does not own any stock,
      partnership interest or other equity securities of any Person, except for
      Permitted Investments. 
		 
		5.11	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 business as currently conducted, except where the failure to do
      so would not reasonably be expected to cause a Material Adverse
      Effect. 
		 
		5.12	Inbound Licenses. Except as disclosed on the Schedule,
      Borrower is not a party to, nor is bound by, any license or other
      agreement that prohibits or otherwise restricts Borrower from granting a
      security interest in Borrower’s interest in such license or agreement or
      any other property.

7

	 	5.13	Full Disclosure. No representation, warranty or other
      statement made by Borrower in any certificate or written statement
      furnished to Bank taken together with all such certificates and written
      statements 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, it
      being recognized by Bank that the projections and forecasts provided by
      Borrower in good faith and based upon reasonable assumptions are not to be
      viewed as facts and that actual results during the period or periods
      covered by any such projections and forecasts may differ from the
      projected or forecasted results. 
	             
    	             
    	
	6.	AFFIRMATIVE
      COVENANTS.

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

		6.1	Good Standing and Government
      Compliance. Borrower shall
      maintain its and each of its Subsidiaries’ corporate existence and good
      standing in the Borrower State, shall maintain qualification and good
      standing in each other jurisdiction in which the failure to so qualify
      would reasonably be expected to have a Material Adverse Effect, and shall
      furnish to Bank the organizational identification number issued to
      Borrower by the authorities of the state in which Borrower is organized,
      if applicable. 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 in all
      material respects with all applicable Environmental Laws, and maintain all
      material permits, licenses and approvals required thereunder where the
      failure to do so would reasonably be expected to have a Material Adverse
      Effect. 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, and shall maintain, and shall cause each of its
      Subsidiaries to maintain, in force all licenses, approvals and agreements,
      the loss of which or failure to comply with which would reasonably be
      expected to have a Material Adverse Effect.
	             
    	             
    	
		6.2	Financial Statements, Reports,
      Certificates. Borrower shall
      deliver to Bank: (i) as soon as available, but in any event within 30 days
      after the end of each calendar month, a company prepared consolidated and
      consolidating cash balance statement, in a form reasonably acceptable to
      Bank and certified by a Responsible Officer, (ii) as soon as available,
      but in any event within 45 days after the end of each fiscal quarter of
      Borrower, a company prepared consolidated and consolidating balance sheet,
      income statement and cash flow statement covering Borrower’s operations
      during such period, in a form reasonably acceptable to Bank and certified
      by a Responsible Officer; (iii) as soon as available, but in any event
      within 90 days after the end of Borrower’s fiscal year, audited
      consolidated and consolidating financial statements of Borrower prepared
      in accordance with GAAP, consistently applied, together with an opinion
      which is unqualified or otherwise consented to in writing by Bank on such
      financial statements of an independent certified public accounting firm
      reasonably acceptable to Bank; (iv) copies of all statements, reports and
      notices sent or made available generally by Borrower to its security
      holders or to any holders of Subordinated Debt and all reports on Forms
      10-K and 10-Q filed with the Securities and Exchange Commission; (v)
      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 $250,000 or more;
      (vi) promptly upon receipt, each management letter prepared by Borrower’s
      independent certified public accounting firm regarding Borrower’s
      management control systems; (vii) such budgets, sales projections,
      operating plans or other financial information generally prepared by
      Borrower in the ordinary course of business as Bank may reasonably request
      from time to time; and (viii) within 30 days of the last day of each
      fiscal quarter, a report signed by Borrower, in form reasonably acceptable
      to Bank, listing any applications or registrations that Borrower has made
      or filed in respect of any Patents, Copyrights or Trademarks and the
      status of any outstanding applications or registrations, as well as any
      material change in Borrower’s Intellectual Property Collateral, including
      but not limited to any subsequent ownership right of Borrower in or to any
      Trademark, Patent or Copyright not specified in Exhibits A, B, and C of
      any Intellectual Property Security Agreement delivered to Bank by Borrower
      in connection with this Agreement.

8

			(a)	Within 30 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 D
      hereto, together with aged listings by invoice date of accounts receivable
      and accounts payable. 
	             
    	             
    	             
    	
			(b)	Within 30 days after the last day
      of each month, Borrower shall deliver to Bank with the monthly financial
      statements a Compliance Certificate certified as of the last day of the
      applicable month and signed by a Responsible Officer in substantially the
      form of Exhibit E hereto.
			 
			(c)	As soon as possible and in any
      event within 3 calendar days after becoming aware of the occurrence or
      existence of an Event of Default hereunder, a written statement of a
      Responsible Officer setting forth details of the Event of Default, and the
      action which Borrower has taken or proposes to take with respect
      thereto.
			 
			(d)	Bank shall have a 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
      often than every 6 months unless an Event of Default has occurred and is
      continuing. Bank shall audit Borrower’s Accounts within 45 days after
      aggregate Advances outstanding exceed
$1,000,000.

     Borrower
may deliver to Bank on an electronic basis any certificates, reports or
information required pursuant to this Section 6.2, and Bank shall be entitled to
rely on the information contained in the electronic files, provided that Bank in
good faith believes that the files were delivered by a Responsible Officer. If
Borrower delivers this information electronically, it shall also deliver to Bank
by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or
..pdf file within 5 Business Days of submission of the unsigned electronic copy
the certification of monthly financial statements, the intellectual property
report, the Borrowing Base Certificate and the Compliance Certificate, each
bearing the physical signature of the Responsible Officer.

		6.3	Inventory;
      Returns. Borrower shall keep all
      Inventory in good and merchantable condition, free from all material
      defects except for Inventory for which adequate reserves have been made.
      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 on the Closing Date.
      Borrower shall promptly notify Bank of all returns and recoveries and of
      all disputes and claims involving more than $100,000.
	             
    	             
    	
		6.4	Taxes. Borrower shall make, and 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, including, but not limited to, those laws concerning income
      taxes, F.I.C.A., F.U.T.A. and state disability, and will execute and
      deliver to Bank, on demand, proof satisfactory to Bank indicating that
      Borrower or a Subsidiary has made such payments or deposits and any
      appropriate certificates attesting to the payment or deposit thereof;
      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. 
		 
		6.5	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
      liability and other insurance in amounts and of a type that are customary
      to businesses similar to Borrower’s.

9

		 	(b)	All such policies of insurance
      shall be in such form, with such companies, and in such amounts as
      reasonably satisfactory to Bank. All 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, and all liability
      insurance policies shall show Bank as an additional insured and specify
      that the insurer must give at least 20 days notice to Bank before
      canceling its policy for any reason. Upon Bank’s request, Borrower shall
      deliver to Bank certified copies of the policies of insurance and evidence
      of all premium payments. If no Event of Default has occurred and is
      continuing, proceeds payable under any casualty policy will, at Borrower’s
      option, be payable to Borrower to replace the property subject to the
      claim, provided that any such replacement property shall be deemed
      Collateral in which Bank has been granted a first priority security
      interest. If an Event of Default has occurred and is continuing, all
      proceeds payable under any such policy shall, at Bank’s option, be payable
      to Bank to be applied on account of the Obligations.
	             
    	             
    	             
    	
		6.6	Primary
      Depository. Borrower shall
      maintain all its primary operating and money market accounts with Bank and
      its primary investment accounts with Bank or Bank’s Affiliates;
      provided, that any account at Bank’s Affiliate is governed by a
      fully executed control agreement in form and substance reasonably
      acceptable to Bank within 90 days after the Closing Date.
		 
		6.7	Financial
      Covenants. Borrower shall at all
      times maintain the following financial ratios and covenants:
		 
		 	(a)	Adjusted Quick
      Ratio. Tested quarterly, a ratio
      of Cash maintained at Bank (which Cash at Bank shall be no less than
      $1,000,000 at any time) or Bank’s Affiliates (provided that any account at
      Bank’s Affiliate is governed by a fully executed control agreement in form
      and substance reasonably acceptable to Bank), plus Eligible Accounts
      to
      Current Liabilities plus (to the extent not already included therein) all
      Indebtedness to Bank less
      Deferred Revenue of at least 2.50 to
      1.00.
		 
		 	(b)	Minimum Net Income/Maximum Net
      Loss. Tested monthly and
      calculated on a trailing 3 month basis, net income shall be no less than
      the amounts set forth below: 

	             
    	             
    	Month Ending	Trailing 3 Month Minimum Net Income/Maximum Loss
	 		April 30,
      2009	($750,000)
			May 31,
    2009	($650,000)
			June 30,
      2009	($400,000)
		 	July 31,
      2009	($400,000)
			August 31,
      2009	($300,000)
			September 30,
      2009	($200,000)
			October 31,
      2009	($200,000)
			November 30,
      2009	($150,000)
			December 31, 2009	($150,000)

10

		6.8	Registration of
      Intellectual Property Rights. 
	             
    	             
    	             
    	
		 	(a)	Borrower shall register or cause
      to be registered on an expedited basis (to the extent not already
      registered) with the United States Patent and Trademark Office or the
      United States Copyright Office, as the case may be, those registrable
      intellectual property rights now owned or hereafter developed or acquired
      by Borrower, to the extent that Borrower, in its reasonable business
      judgment, deems it appropriate to so protect such intellectual property
      rights. 
		 
		 	(b)	Borrower shall promptly give Bank
      written notice of any applications or registrations of intellectual
      property rights filed with the United States Patent and Trademark Office,
      including the date of such filing and the registration or application
      numbers, if any. 
		 
		 	(c)	Borrower shall (i) give Bank not
      less than 30 days prior written notice of the filing of any applications
      or registrations with the United States Copyright Office, including the
      title of such intellectual property rights to be registered, as such title
      will appear on such applications or registrations, and the date such
      applications or registrations will be filed; (ii) prior to the filing of
      any such applications or registrations, execute such documents as Bank may
      reasonably request for Bank to maintain its perfection in such
      intellectual property rights to be registered by Borrower; (iii) upon the
      request of Bank, either deliver to Bank or file such documents
      simultaneously with the filing of any such applications or registrations;
      (iv) upon filing any such applications or registrations, promptly provide
      Bank with a copy of such applications or registrations together with any
      exhibits, evidence of the filing of any documents requested by Bank to be
      filed for Bank to maintain the perfection and priority of its security
      interest in such intellectual property rights, and the date of such
      filing. 
		 
		 	(d)	Borrower shall execute and
      deliver such additional instruments and documents from time to time as
      Bank shall reasonably request to perfect and maintain the perfection and
      priority of Bank’s security interest in the Intellectual Property
      Collateral. 
		 
		 	(e)	Borrower shall (i) protect,
      defend and maintain the validity and enforceability of the trade secrets,
      Trademarks, Patents and Copyrights, (ii) use commercially reasonable
      efforts to detect infringements of the Trademarks, Patents and Copyrights
      and promptly advise Bank in writing of material infringements detected and
      (iii) not allow any material Trademarks, Patents or Copyrights to be
      abandoned, forfeited or dedicated to the public without the written
      consent of Bank, which shall not be unreasonably withheld. 
		 
		 	(f)	Bank may audit Borrower’s
      Intellectual Property Collateral to confirm compliance with this Section
      6.8, provided such audit may not occur more often than twice per year,
      unless an Event of Default has occurred and is continuing. Bank shall have
      the right, but not the obligation, to take, at Borrower’s sole expense,
      any actions that Borrower is required under this Section 6.8 to take but
      which Borrower fails to take, after 15 days’ notice to Borrower. Borrower
      shall reimburse and indemnify Bank for all reasonable costs and reasonable
      expenses incurred in the reasonable exercise of its rights under this
      Section 6.8. 
		 
		6.9	Consent of Inbound
      Licensors. Prior to entering
      into or becoming bound by any license or agreement, Borrower shall: (i)
      provide written notice to Bank of the material terms of such license or
      agreement with a description of its likely impact on Borrower’s business
      or financial condition; and (ii) in good faith use commercially
      reasonable efforts to obtain the consent of, or waiver by, any person
      whose consent or waiver is necessary for Borrower’s interest in such
      licenses or contract rights to be deemed Collateral and for Bank to have a
      security interest in it that might otherwise be restricted by the terms of
      the applicable license or agreement, whether now existing or entered into
      in the future, provided, however, that the failure to obtain any such
      consent or waiver shall not constitute a default under this
  Agreement.

11

	 	6.10	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. 
	             
    	             
    	
	7.	NEGATIVE
      COVENANTS.

     Borrower
covenants and agrees that, so long as any credit hereunder shall be available
and until the outstanding Obligations are paid in full or for so long as Bank
may have any commitment to make any Credit Extensions, Borrower will not do any
of the following without Bank’s prior written consent:

		7.1	Dispositions. Convey, sell, lease, license, transfer or
      otherwise dispose of (collectively, to “Transfer”), or permit any of its
      Subsidiaries to Transfer, all or any part of its business or property, or
      move cash balances on deposit with Bank to accounts opened at another
      financial institution, other than Permitted Transfers. 
	             
    	             
    	
		7.2	Change in Name, Location,
      Executive Office, or Executive Management; Change in Business; Change in Fiscal
      Year; Change in Control. Change
      its name or the Borrower State or relocate its chief executive office
      without 30 days prior written notification to Bank; replace its chief
      executive officer or chief financial officer without 30 days prior written
      notification to Bank; engage in any business, or permit any of its
      Subsidiaries to engage in any business, other than or reasonably related
      or incidental to the businesses currently engaged in by Borrower; change
      its fiscal year end; have a Change in Control. 
		 
		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 (other than mergers or
      consolidations of a Subsidiary into another Subsidiary or into Borrower),
      or acquire, or permit any of its Subsidiaries to acquire, all or
      substantially all of the capital stock or property of another Person
      except where (i) such transactions do not in the aggregate exceed
      $1,000,000 during the term of this Agreement and while any Obligations
      remain outstanding, (ii) no Event of Default has occurred, is continuing
      or would exist after giving effect to such transactions, (iii) the target
      company’s business is substantially similar to that of Borrower’s as of
      the Closing Date, (iv) such transactions do not result in a Change in
      Control, and (v) Borrower is the surviving entity. 
		 
		7.4	Indebtedness. Create, incur, assume, guarantee or be or
      remain liable with respect to any Indebtedness, or permit any Subsidiary
      so to do, other than Permitted Indebtedness, or prepay any Indebtedness or
      take any actions which impose on Borrower an obligation to prepay any
      Indebtedness, except Indebtedness to Bank. 
		 
		7.5	Encumbrances. Create, incur, assume or allow 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, or covenant to
      any other Person that Borrower in the future will refrain from creating,
      incurring, assuming or allowing any Lien with respect to any of Borrower’s
      property. 
		 
		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, except that Borrower may repurchase the
      stock of former employees pursuant to stock repurchase agreements as long
      as an Event of Default does not exist prior to such repurchase or would
      not exist after giving effect to such repurchase.

12

		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, or maintain or invest any of
      its property with a Person other than Bank or Bank’s Affiliates or permit
      any Subsidiary to do so unless such Person has entered into a control
      agreement with Bank, in form and substance satisfactory to Bank, or suffer
      or permit any Subsidiary to be a party to, or be bound by, an agreement
      that restricts such Subsidiary from paying dividends or otherwise
      distributing property to Borrower. 
		 
		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 non-affiliated 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 affecting Bank’s rights contained in any documentation
      relating to the Subordinated Debt without Bank’s prior written
      consent. 
		 
		7.10	Inventory and
      Equipment. Store the Inventory
      or the Equipment with a bailee, warehouseman, or similar third party
      unless the third party has been notified of Bank’s security interest and
      Bank (a) has received an acknowledgment from the third party that it is
      holding or will hold the Inventory or Equipment for Bank’s benefit or (b)
      is in possession of the warehouse receipt, where negotiable, covering such
      Inventory or Equipment. 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 and Equipment only at the
      location set forth in Section 10 and such other locations of which
      Borrower gives Bank prior written notice and as to which Bank files a
      financing statement where needed to perfect its security interest.
    
		 
		7.11	No Investment Company; Margin
      Regulation. Become or be
      controlled by an “investment company,” within the meaning of the
      Investment Company Act of 1940, or become principally engaged in, or
      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. 
		 
		7.12	Capital
      Expenditures. Incur or make
      Capital Expenditures in excess of Seven Hundred Fifty Thousand Dollars
      ($750,000) during any fiscal year of Borrower. 
	             
    	             
    	
	
      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 any of the Obligations when due; 
		 
		8.2	Covenant
      Default.
		 
		 	(a)	If Borrower fails to perform any
      obligation under Article 6 or violates any of the covenants contained in
      Article 7 of this Agreement; or 
	             
    	             
    	             
    	
		 	(b)	
      If Borrower fails or neglects to perform or
      observe any other material term, provision, condition, covenant 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 or covenant that can be cured, has
      failed to cure such default within 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 10 day period or cannot after diligent
      attempts by Borrower be cured within such 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 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 but no Credit Extensions will be
made;

13

		8.3	Material Adverse
      Change. If there occurs a
      material adverse change in Borrower’s prospects, business or financial
      condition, or if there is a material impairment in the prospect of
      repayment of any portion of the Obligations or a material impairment in
      the perfection, value or priority of Bank’s security interests in the
      Collateral;
	             
    	             
    	
		8.4	Defective
      Perfection. If Bank shall
      receive at any time following the Closing Date an SOS Report indicating
      that except for Permitted Liens, Bank’s security interest in the
      Collateral is not prior to all other security interests or Liens of record
      reflected in the report;
		 
		8.5	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 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 judgment 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
      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 made during such
      cure period);
		 
		8.6	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 30 days (provided that no Credit Extensions will be made prior to
      the dismissal of such Insolvency Proceeding);
		 
		8.7	Other Agreements. If there is a default or other failure to
      perform 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 $100,000 or that would reasonably be expected to have a
      Material Adverse Effect;
		 
		8.8	Subordinated Debt. If Borrower makes any payment on account of
      Subordinated Debt, except to the extent the payment is allowed under any
      subordination agreement entered into with Bank;
		 
		8.9	Judgments. If a judgment or judgments for the payment
      of money in an amount, individually or in the aggregate, of at least
      $100,000 shall be rendered against Borrower and shall remain unsatisfied
      and unstayed for a period of 10 days (provided that no Credit Extensions
      will be made prior to the satisfaction or stay of the judgment);
    or
		 
		8.10	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.
			 
		

14

	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 8.6 (insolvency), all
      Obligations shall become immediately due and payable without any action by
      Bank);
			             
    	
		 	(b)	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 (ii) pay in advance all Letter
      of Credit fees scheduled to be paid or payable over the remaining term of
      the Letters of Credit, and Borrower shall promptly deposit and pay such
      amounts;
		 
		 	(c) 	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;
		 
		 	(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)	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)	Set off and apply to the
      Obligations any and all (i) balances and deposits of Borrower held by
      Bank, and (ii) indebtedness at any time owing to or for the credit or the
      account of Borrower held by Bank;
		 
		 	(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 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, 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. Bank may sell the Collateral without
      giving any warranties as to the Collateral. Bank may specifically disclaim
      any warranties of title or the like. This procedure will not be considered
      adversely to affect the commercial reasonableness of any sale of the
      Collateral. If Bank sells any of the Collateral upon credit, Borrower will
      be credited only with payments actually made by the purchaser, received by
      Bank, and applied to the indebtedness of the purchaser. If the purchaser
      fails to pay for the Collateral, Bank may resell the Collateral and
      Borrower shall be credited with the proceeds of the
  sale;

15

	             
    	             
    	(i)	Bank may credit bid and purchase
      at any public sale;
	             
    	             
    	             
    	
			(j)	Apply for the appointment of a
      receiver, trustee, liquidator or conservator of the Collateral, without
      notice and without regard to the adequacy of the security for the
      Obligations and without regard to the solvency of Borrower, any guarantor
      or any other Person liable for any of the Obligations; and
			 
			(k)	Any deficiency that exists after
      disposition of the Collateral as provided above will be paid immediately
      by Borrower.

     Bank may
comply with any applicable state or federal law requirements in connection with
a disposition of the Collateral and compliance will not be considered adversely
to affect the commercial reasonableness of any sale of the
Collateral.

	             
    	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; (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; (g) enter into a short-form intellectual property security
      agreement consistent with the terms of this Agreement for recording
      purposes only or modify, in its sole discretion, any intellectual property
      security agreement entered into between Borrower and Bank without first
      obtaining Borrower’s approval of or signature to such modification by
      amending Exhibits A, B, and C, thereof, as appropriate, to include
      reference to any right, title or interest in any Copyrights, Patents or
      Trademarks acquired by Borrower after the execution hereof or to delete
      any reference to any right, title or interest in any Copyrights, Patents
      or Trademarks in which Borrower no longer has or claims to have any right,
      title or interest; and (h) file, in its sole discretion, one or more
      financing or continuation statements and amendments thereto, relative to
      any of the Collateral without the signature of Borrower where permitted by
      law; provided Bank may exercise such power of attorney to sign the name of
      Borrower on any of the documents described in clauses (g) and (h) above,
      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 time after
      the occurrence and during the continuation of an Event of Default, 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 after reasonable notice to Borrower: (a) make payment of the
      same or any part thereof; (b) set up such reserves under the Revolving
      Line 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 6.5 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.

16

	 	9.5	Bank’s Liability for
      Collateral. Bank has no
      obligation to clean up or otherwise prepare the Collateral for sale. All
      risk of loss, damage or destruction of the Collateral shall be borne by
      Borrower. 
	             
    	             
    	
	 	9.6	No Obligation to Pursue
      Others. Bank has no obligation
      to attempt to satisfy the Obligations by collecting them from any other
      person liable for them and Bank may release, modify or waive any
      collateral provided by any other Person to secure any of the Obligations,
      all without affecting Bank’s rights against Borrower. Borrower waives any
      right it may have to require Bank to pursue any other Person for any of
      the Obligations. 
	 
	 	9.7	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 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. Borrower expressly agrees that this
      Section 9.7 may not be waived or modified by Bank by course of
      performance, conduct, estoppel or otherwise. 
	 
	 	9.8	Demand; Protest. Except as otherwise provided in this
      Agreement, Borrower waives demand, protest, notice of protest, notice of
      default or dishonor, notice of payment and nonpayment and any other
      notices relating to the Obligations. 
	 
	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:  	LogicVision, Inc.  
		  	25
      Metro Drive, 3rd Floor  
		  	San
      Jose, CA 95110  
	 	  	Attn:  	Mei Song   
	          	  	FAX:  	(408) 904-7558 
		  
	 	If to
      Bank:  	Comerica Bank  
		  	M/C
      7512  
		  	39200
      W. Six Mile Road  
		  	Livonia, MI 48152  
		  	Attn:
      Livonia Operations Center  
		  
		with a copy
      to:  	Comerica Bank  
		  	226
      Airport Parkway  
		  	M/C
      4120  
		  	San
      Jose, CA 95110  
			Attn:  	Guy Simpson  
			FAX:  	(408)
  451-8568   

17

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.

     This
Agreement 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. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO
THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, KNOWINGLY AND VOLUNTARILY,
AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN
THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER
DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED PARTIES.

	12.	JUDICIAL REFERENCE
      PROVISION.
	             
    	             
    	             
    	
			(a)	In the event the Jury Trial
      Waiver set forth above is not enforceable, the parties elect to proceed
      under this Judicial Reference Provision.
	             
    	             
    	             
    	
			(b)	With the exception of the items
      specified in clause (c), below, any controversy, dispute or claim (each, a
      “Claim”) between the parties arising out of or relating to this Agreement
      or any other document, instrument or agreement between the undersigned
      parties (collectively in this Section, the “Comerica Documents), will be
      resolved by a reference proceeding in California in accordance with the
      provisions of Sections 638 et seq. of the California Code of Civil
      Procedure (“CCP”), or their successor sections, which shall constitute the
      exclusive remedy for the resolution of any Claim, including whether the
      Claim is subject to the reference proceeding. Except as otherwise provided
      in the Comerica Documents, venue for the reference proceeding will be in
      the state or federal court in the county or district where the real
      property involved in the action, if any, is located or in the state or
      federal court in the county or district where venue is otherwise
      appropriate under applicable law (the “Court”).
			 
			(c)	The matters that shall not be
      subject to a reference are the following: (i) nonjudicial foreclosure of
      any security interests in real or personal property, (ii) exercise of
      self-help remedies (including, without limitation, set-off), (iii)
      appointment of a receiver and (iv) temporary, provisional or ancillary
      remedies (including, without limitation, writs of attachment, writs of
      possession, temporary restraining orders or preliminary injunctions). This
      reference provision does not limit the right of any party to exercise or
      oppose any of the rights and remedies described in clauses (i) and (ii) or
      to seek or oppose from a court of competent jurisdiction any of the items
      described in clauses (iii) and (iv). The exercise of, or opposition to,
      any of those items does not waive the right of any party to a reference
      pursuant to this reference provision as provided herein.
			 
			(d)	The referee shall be a retired
      judge or justice selected by mutual written agreement of the parties. If
      the parties do not agree within ten (10) days of a written request to do
      so by any party, then, upon request of any party, the referee shall be
      selected by the Presiding Judge of the Court (or his or her
      representative). A request for appointment of a referee may be heard on an
      ex parte or expedited basis, and the parties agree that irreparable harm
      would result if ex parte relief is not granted. Pursuant to CCP § 170.6,
      each party shall have one peremptory challenge to the referee selected by
      the Presiding Judge of the Court (or his or her
  representative).
			 

18

			(e)	The parties agree that time is of
      the essence in conducting the reference proceedings. Accordingly, the
      referee shall be requested, subject to change in the time periods
      specified herein for good cause shown, to (i) set the matter for a status
      and trial-setting conference within fifteen (15) days after the date of
      selection of the referee, (ii) if practicable, try all issues of law or
      fact within one hundred twenty (120) days after the date of the conference
      and (iii) report a statement of decision within twenty (20) days after the
      matter has been submitted for decision. 
	             
    	             
    	             
    	
			(f)	The referee will have power to
      expand or limit the amount and duration of discovery. The referee may set
      or extend discovery deadlines or cutoffs for good cause, including a
      party’s failure to provide requested discovery for any reason whatsoever.
      Unless otherwise ordered based upon good cause shown, no party shall be
      entitled to “priority” in conducting discovery, depositions may be taken
      by either party upon seven (7) days written notice, and all other
      discovery shall be responded to within fifteen (15) days after service.
      All disputes relating to discovery which cannot be resolved by the parties
      shall be submitted to the referee whose decision shall be final and
      binding. 
			 
			(g)	Except as expressly set forth
      herein, the referee shall determine the manner in which the reference
      proceeding is conducted including the time and place of hearings, the
      order of presentation of evidence, and all other questions that arise with
      respect to the course of the reference proceeding. All proceedings and
      hearings conducted before the referee, except for trial, shall be
      conducted without a court reporter, except that when any party so
      requests, a court reporter will be used at any hearing conducted before
      the referee, and the referee will be provided a courtesy copy of the
      transcript. The party making such a request shall have the obligation to
      arrange for and pay the court reporter. Subject to the referee’s power to
      award costs to the prevailing party, the parties will equally share the
      cost of the referee and the court reporter at trial. 
			 
			(h)	The referee shall be required to
      determine all issues in accordance with existing case law and the
      statutory laws of the State of California. The rules of evidence
      applicable to proceedings at law in the State of California will be
      applicable to the reference proceeding. The referee shall be empowered to
      enter equitable as well as legal relief, enter equitable orders that will
      be binding on the parties and rule on any motion which would be authorized
      in a court proceeding, including without limitation motions for summary
      judgment or summary adjudication. The referee shall issue a decision at
      the close of the reference proceeding which disposes of all claims of the
      parties that are the subject of the reference. Pursuant to CCP § 644, such
      decision shall be entered by the Court as a judgment or an order in the
      same manner as if the action had been tried by the Court and any such
      decision will be final, binding and conclusive. The parties reserve the
      right to appeal from the final judgment or order or from any appealable
      decision or order entered by the referee. The parties reserve the right to
      findings of fact, conclusions of laws, a written statement of decision,
      and the right to move for a new trial or a different judgment, which new
      trial, if granted, is also to be a reference proceeding under this
      provision. 
			 
			(i)	If the enabling legislation which
      provides for appointment of a referee is repealed (and no successor
      statute is enacted), any dispute between the parties that would otherwise
      be determined by reference procedure will be resolved and determined by
      arbitration. The arbitration will be conducted by a retired judge or
      justice, in accordance with the California Arbitration Act § 1280 through
      § 1294.2 of the CCP as amended from time to time. The limitations with
      respect to discovery set forth above shall apply to any such arbitration
      proceeding. 
			 
			(j)	THE PARTIES RECOGNIZE AND AGREE
      THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE
      PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING
      (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS OWN CHOICE,
      EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL
      PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY
      CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN
      ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER COMERICA
    DOCUMENTS.

19

	13.   
        	GENERAL
      PROVISIONS.
	 
	 	13.1	Successors and
      Assigns. This Agreement shall
      bind and inure to the benefit of the respective successors and permitted
      assigns of each of the parties and shall bind all persons who become bound
      as a debtor to this Agreement; 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.
	             
    	             
    	
	 	13.2	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 this
      Agreement; and (b) all losses or Bank Expenses in any way suffered,
      incurred, or paid by Bank, its officers, employees and agents as a result
      of or in any way arising out of, following, or consequential to
      transactions between Bank and Borrower whether under this Agreement, or
      otherwise (including without limitation reasonable attorneys fees and
      expenses), except for losses caused by Bank’s gross negligence or willful
      misconduct.
	 
	 	13.3	Time of Essence. Time is of the essence for the performance
      of all obligations set forth in this Agreement.
	 
	 	13.4	Severability of
      Provisions. Each provision of
      this Agreement shall be severable from every other provision of this
      Agreement for the purpose of determining the legal enforceability of any
      specific provision.
	 
	 	13.5	Amendments in Writing,
      Integration. All amendments to
      or terminations of this Agreement or the other Loan Documents must be in
      writing. All prior agreements, understandings, representations,
      warranties, and negotiations between the parties hereto with respect to
      the subject matter of this Agreement and the other Loan Documents, if any,
      are merged into this Agreement and the Loan Documents.
	 
	 	13.6	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.
	 
	 	13.7	Survival. All covenants, representations and
      warranties made in this Agreement shall continue in full force and effect
      so long as any Obligations remain outstanding or Bank has any obligation
      to make any Credit Extension to Borrower. The obligations of Borrower to
      indemnify Bank with respect to the expenses, damages, losses, costs and
      liabilities described in Section 13.2 shall survive until all applicable
      statute of limitations periods with respect to actions that may be brought
      against Bank have run.
	 
	 	13.8	Confidentiality. In handling any confidential information,
      Bank and all employees and agents of Bank shall exercise the same degree
      of care that Bank 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 Credit Extensions,
      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 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.

20

		13.9	Amendment and
      Restatement. This Agreement
      constitutes an amendment and restatement of the Original Agreement, which
      Original Agreement is fully superseded and amended and restated in its
      entirety hereby; provided, however, that the Obligations governed by the
      Original Agreement shall remain outstanding and in full force and effect
      and provided further that this Agreement does not constitute a novation of
      such Obligations. The Liens created pursuant to the Original Agreement and
      any other Loan Documents shall secure the Obligations without interruption
      and with all priorities intact.
	             
    	             
    	

[Remainder of Page Intentionally Left
Blank]

21

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

		LOGICVISION, INC. 
		 
		 
		By: 	  /s/ James T.
      Healy 
		Name: 	  James T.
      Healy 
		Title: 	  President and Chief
      Executive Officer   
		  
		 
		COMERICA BANK 
		 
		 
		By: 	  /s/
      Guy Simpson   
		Name: 	 
      Guy Simpson 
		Title: 	  Vice
      President  

22 

EXHIBIT A

DEFINITIONS

“Accounts” means all presently existing
and hereafter arising accounts, contract rights, payment intangibles 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 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 or cash advances under the Revolving Line.

“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 reasonable
costs or expenses (including reasonable attorneys’ fees and expenses, whether
generated in-house or by outside counsel) 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 (whether generated in-house or by outside counsel) 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 State” means Delaware, the
state under whose laws Borrower is organized.

“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 80% 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.

“Capital Expenditure” shall mean,
without duplication, any payment made directly or indirectly for the purpose of
acquiring or constructing fixed assets, real property or equipment which in
accordance with GAAP would be added as a debit to the fixed asset account of
Borrower, including, without limitation, amounts paid or payable under any
conditional sale or other title retention agreement or under any lease or other
periodic payment arrangement which is of such a nature that payment obligations
of Borrower thereunder would be required by generally accepted accounting
principles to be capitalized and shown as liabilities on the balance sheet of
Borrower.

“Capitalized Expenditures” means
current period cash expenditures that are amortized over a period of time in
accordance with GAAP.

“Cash” means unrestricted cash and cash
equivalents.

“Change in Control” shall mean a
transaction in which any “person” or “group” (within the meaning of Section
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of a sufficient number of shares of all
classes of stock then outstanding of Borrower ordinarily entitled to vote in the
election of directors, empowering such “person” or “group” to elect a majority
of the Board of Directors of Borrower, who did not have such power before such
transaction.

“Chief Executive Office State” means
California, where Borrower’s chief executive office is located.

Exhibit A – Page 1

“Closing Date” means the date of this
Agreement.

“Code” means the California Uniform
Commercial Code as amended or supplemented from time to time.

“Collateral” means the property
described on Exhibit B attached hereto and all Negotiable Collateral and
Intellectual Property Collateral to the extent not described on Exhibit B,
except to the extent any such property (i) is nonassignable by its terms without
the consent of the licensor thereof or another party (but only to the extent
such prohibition on transfer is enforceable under applicable law, including,
without limitation, Sections 9406 and 9408 of the Code), (ii) the granting of a
security interest therein is contrary to applicable law, provided that upon the
cessation of any such restriction or prohibition, such property shall
automatically become part of the Collateral, or (iii) constitutes the capital
stock of a controlled foreign corporation (as defined in the IRC), in excess of
65% of the voting power of all classes of capital stock of such controlled
foreign corporations entitled to vote.

“Collateral State” means the state or
states where the Collateral is located, which are California and
Delaware.

“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, corporate credit cards or merchant
services 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,
or any other extension of credit by Bank to or for the benefit of Borrower
hereunder.

“Current Liabilities” means, as of any
applicable date, all amounts that should, in accordance with GAAP, be included
as current liabilities on the consolidated balance sheet of Borrower and its
Subsidiaries, as at such date, plus, to the extent not already included therein,
undrawn Letters of Credit and Borrower’s maximum potential obligations under the
Credit Card Services Sublimit and Foreign Exchange Sublimit, but specifically
excluding any cash-secured Obligations.

“Daily Adjusting LIBOR Rate” has the
meaning assigned to such term in the LIBOR Addendum.

“Deferred Revenue” means all amounts
received under contracts in advance of performance and not yet recognized as
revenue, as reported in Borrower’s financial statements filed with the
Securities and Exchange Commission.

Exhibit A – Page 2

“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 5.3; provided, that Bank may change the standards of eligibility by
giving Borrower 30 days prior written notice. Unless otherwise agreed to by
Bank, Eligible Accounts shall not include the following:

	          	(a)	     	Accounts that the account debtor
      has failed to pay in full within 90 days of invoice date;
		 
		(b)		Credit balances over 90
      days;
		 
		(c)		Accounts with respect to an
      account debtor, 25% of whose Accounts the account debtor has failed to pay
      within 90 days of invoice date;
		 
		(d)		Accounts with respect to an
      account debtor, including Subsidiaries and Affiliates, whose total
      obligations to Borrower exceed 20% of all Accounts (“Concentration
      Limit”), to the extent such obligations exceed the aforementioned
      percentage, except as approved in writing by Bank. Notwithstanding the
      foregoing, the Concentration Limit for Accounts where Broadcom, LSI/Agere,
      Qualcomm or Intel are the account debtors shall be 40%;
		 
		(e)		Accounts with respect to which
      the account debtor does not have its principal place of business in the
      United States, except for Eligible Foreign Accounts;
		 
		(f)		Accounts with respect to which
      the account debtor is the United States or any department, agency, or
      instrumentality of the United States, except for Accounts of the United
      States if the payee has assigned its payment rights to Bank and the
      assignment has been acknowledged under the Assignment of Claims Act of
      1940 (31 U.S.C. 3727);
		 
		(g)		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;
		 
		(h)		Accounts with respect to which
      goods are placed on consignment, guaranteed sale, sale or return, sale on
      approval, bill and hold, demo or promotional, or other terms by reason of
      which the payment by the account debtor may be conditional;
		 
		(i)		Accounts with respect to which
      the account debtor is an officer, employee, agent or Affiliate of
      Borrower;
		 
		(j)		Accounts that have not yet been
      billed to the account debtor or that relate to deposits (such as good
      faith deposits) or other property of the account debtor held by Borrower
      for the performance of services or delivery of goods which Borrower has
      not yet performed or delivered;
		 
		(k)		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;
		 
		(l)		Accounts the collection of which
      Bank reasonably determines after inquiry and consultation with Borrower to
      be doubtful; and
		 
		(m)		Retentions and
    hold-backs.

“Eligible Foreign Account” means an
Account which meets all of the requirements to be an Eligible Account except
with respect to which the account debtor does not have its principal place of
business in the United States and that is (i) supported by one or more letters
of credit in an amount and of a tenor, and issued by a financial institution,
acceptable to Bank, (ii) an insurance acceptable to Bank, or (iv) an Account
owing by Sony, Matsushita or Sharp, (iv) approved by Bank on a case-by-case
basis. All Eligible Foreign Accounts must be calculated in U.S.
Dollars.

“Environmental Laws” means all laws,
rules, regulations, orders and the like issued by any federal state, local
foreign or other governmental or quasi-governmental authority or any agency
pertaining to the environment or to any hazardous materials or wastes, toxic
substances, flammable, explosive or radioactive materials, asbestos or other
similar materials.

Exhibit A – Page 3

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

“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 Sublimit” means a
sublimit for foreign exchange contracts under the Revolving Line not to exceed
$200,000.

“GAAP” means generally accepted
accounting principles, consistently applied, 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, (d) all Contingent Obligations, and (e) all obligations arising
under the Foreign Exchange Sublimit.

“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 Collateral”
means all of Borrower’s right, title, and interest in and to the
following:

	          	(a)	      	Copyrights, Trademarks and
      Patents;
		 
		(b)		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;
		 
		(c)		Any and all design rights which
      may be available to Borrower now or hereafter existing, created, acquired
      or held;
		 
		(d)		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;
		 
		(e)		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;
		 
		(f)		All amendments, renewals and
      extensions of any of the Copyrights, Trademarks or Patents;
  and
		 
		(g)		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.

“Investment” means any beneficial
ownership of (including stock, partnership or limited liability company 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.

Exhibit A – Page 4

“Letter of Credit” means a commercial
or standby letter of credit or similar undertaking issued by Bank at Borrower’s
request in accordance with Section 2.1(b)(iii).

“Letter of Credit Sublimit” means a
sublimit for Letters of Credit under the Revolving Line not to exceed
$500,000.

“LIBOR Addendum” has the meaning
assigned in Section 2.3(a)(i).

“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 document,
instrument or agreement entered into 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, condition (financial or
otherwise) or prospects of Borrower and its Subsidiaries taken as a whole, (ii)
the ability of Borrower to repay the Obligations or otherwise perform its
obligations under the Loan Documents, or (iii) Borrower’s interest in, or the
value, perfection or priority of Bank’s security interest in the
Collateral.

“Negotiable Collateral” means all of
Borrower’s present and future letters of credit of which it is a beneficiary,
drafts, instruments (including promissory notes), 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.

“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,” subject to
      Section 7.12 of this Agreement, and provided such Indebtedness does not
      exceed the lesser of the cost or fair market value of the equipment
      financed with such Indebtedness;
		 
		(d)		Subordinated Debt;
		 
		(e)		Indebtedness to trade creditors
      incurred in the ordinary course of business; and
		 
		(f)		Extensions, refinancings and
      renewals of any items of Permitted Indebtedness, provided that the
      principal amount is not increased or the terms modified to impose more
      burdensome terms upon Borrower or its Subsidiary, as the case may
      be.

Exhibit A – Page 5

“Permitted Investment”
means:

	           	(a)	      	Investments existing on the
      Closing Date disclosed in the Schedule;
		 
		(b)		(i) Marketable direct obligations
      issued or unconditionally guaranteed by the United States of America or
      any agency or any State thereof maturing within one year from the date of
      acquisition thereof, (ii) commercial paper maturing no more than one year
      from the date of creation thereof and currently having rating of at least
      A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s
      Investors Service, (iii) Bank’s certificates of deposit maturing no more
      than one year from the date of investment therein, and (iv) Bank’s money
      market accounts;
		 
		(c)		Investments accepted in
      connection with Permitted Transfers; and
		 
		(d)		Investments (including debt
      obligations) received in connection with the bankruptcy or reorganization
      of customers or suppliers and in settlement of delinquent obligations of,
      and other disputes with, customers or suppliers arising in the ordinary
      course of Borrower’s business.

“Permitted Liens” means the
following:

	           
    	(a)	      	Any Liens existing on the Closing
      Date and disclosed in the Schedule (excluding Liens to be satisfied with
      the proceeds of the Advances) 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 and for which
      Borrower maintains adequate reserves, provided the same have no priority
      over any of Bank’s security interests;
		 
		(c)		Liens (i) upon or in any
      Equipment (other than Equipment financed by an Equipment Advance) 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 or lease of such Equipment, or (ii) existing on
      such Equipment at the time of its acquisition, provided that the Lien is
      confined solely to the property so acquired and improvements thereon, and
      the proceeds of such Equipment;
		 
		(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;
		 
		(e)		Liens arising from judgments,
      decrees or attachments in circumstances not constituting an Event of
      Default under Sections 8.5 (attachment) or 8.9 (judgments);
  and
		 
		(f)		Liens in favor of other financial
      institutions arising in connection with Borrower’s deposit accounts held
      at such institutions to secure standard fees for deposit services charged
      by, but not financing made available by such institutions, provided that
      Bank has a perfected security interest in the amounts held in such deposit
      accounts.

Exhibit A – Page 6

“Permitted Transfer” means the
conveyance, sale, lease, transfer or disposition by Borrower or any Subsidiary
of:

	           
    	(a)	      	Inventory in the ordinary course
      of business;
				 
		(b)		licenses and similar arrangements
      for the use of the property of Borrower or its Subsidiaries in the
      ordinary course of business; or
		 
		(c)		worn-out or obsolete Equipment
      not financed with the proceeds of Equipment
Advances.

“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.

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

“Revolving Line” means a Credit
Extension of up to $2,000,000 (inclusive of any amounts outstanding under the
Letter of Credit Sublimit and amounts outstanding under the Foreign Exchange
Sublimit).

“Revolving Maturity Date” means
February 24, 2010.

“Schedule” means the schedule of
exceptions attached hereto and approved by Bank, if any.

“SOS Reports” means the official
reports from the Secretaries of State of each Collateral State, Chief Executive
Office State and the Borrower State and other applicable federal, state or local
government offices identifying all current security interests filed in the
Collateral and Liens of record as of the date of such report.

“Subordinated Debt” means any debt
incurred by Borrower that is subordinated in writing 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,
partnership or limited liability company or joint venture in which (i) any
general partnership interest or (ii) more than 50% of the stock, limited
liability company interest or joint venture of which by the terms thereof has
the ordinary voting power to elect the Board of Directors, managers or trustees
of the entity, at the time as of which any determination is being made, is owned
by Borrower, either directly or through an Affiliate.

“Trademarks” 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.

Exhibit A – Page 7

	DEBTOR:
      LOGICVISION, INC.  	 
		 
	SECURED
      PARTY: COMERICA BANK  	 

EXHIBIT B

COLLATERAL DESCRIPTION ATTACHMENT TO
LOAN AND SECURITY AGREEMENT

All personal property of Debtor whether
presently existing or hereafter created or acquired, and wherever located,
including, but not limited to:

	          	(a)	     	all accounts (including
      health-care-insurance receivables), chattel paper (including tangible and
      electronic chattel paper), deposit accounts, documents (including
      negotiable documents), equipment (including all accessions and additions
      thereto), general intangibles (including payment intangibles and
      software), goods (including fixtures), instruments (including promissory
      notes), inventory (including all goods held for sale or lease or to be
      furnished under a contract of service, and including returns and
      repossessions), investment property (including securities and securities
      entitlements), letter of credit rights, money, and all of Debtor’s books
      and records with respect to any of the foregoing, and the computers and
      equipment containing said books and records;
		 
		(b)		all common law and statutory
      copyrights and copyright registrations, applications for registration, now
      existing or hereafter arising, in the United States of America or in any
      foreign jurisdiction, obtained or to be obtained on or in connection with
      any of the forgoing, or any parts thereof or any underlying or component
      elements of any of the forgoing, together with the right to copyright and
      all rights to renew or extend such copyrights and the right (but not the
      obligation) of Secured Party to sue in its own name and/or in the name of
      the Debtor for past, present and future infringements of
    copyright;
		 
		(c)		all trademarks, service marks,
      trade names and service names and the goodwill associated therewith,
      together with the right to trademark and all rights to renew or extend
      such trademarks and the right (but not the obligation) of Secured Party to
      sue in its own name and/or in the name of the Debtor for past, present and
      future infringements of trademark;
		 
		(d)		all (i) patents and patent
      applications filed in the United States Patent and Trademark Office or any
      similar office of any foreign jurisdiction, and interests under patent
      license agreements, including, without limitation, the inventions and
      improvements described and claimed therein, (ii) licenses pertaining to
      any patent whether Debtor is licensor or licensee, (iii) income,
      royalties, damages, payments, accounts and accounts receivable now or
      hereafter due and/or payable under and with respect thereto, including,
      without limitation, damages and payments for past, present or future
      infringements thereof, (iv) right (but not the obligation) to sue in the
      name of Debtor and/or in the name of Secured Party for past, present and
      future infringements thereof, (v) rights corresponding thereto throughout
      the world in all jurisdictions in which such patents have been issued or
      applied for, and (vi) reissues, divisions, continuations, renewals,
      extensions and continuations-in-part with respect to any of the foregoing;
      and
		 
		(e)		any and all cash proceeds and/or
      noncash proceeds of any of the foregoing, including, without limitation,
      insurance proceeds, and all supporting obligations and the security
      therefor or for any right to payment. All terms above have the meanings
      given to them in the California Uniform Commercial Code, as amended or
      supplemented from time to time.

Exhibit B – Page 1

EXHIBIT C

Form of Payment/Advance
Form

TECHNOLOGY & LIFE SCIENCES
DIVISION 
LOAN ANALYSIS
LOAN
ADVANCE/PAYDOWN REQUEST FORM

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

DEADLINE FOR WIRE TRANSFERS IS 1:30 P.M., P.S.T.

*At month end and the day before a
holiday, the cut off time is 1:30 P.M., P.S.T. 
**Subject to 3 day advance
notice.

	TO: 	Loan
      Analysis 	DATE:  	 	 	TIME:  	 	 

FAX #: (650) 846-6840

	  	  		TELEPHONE
      REQUEST (For Bank Use Only):  
	FROM:  	LOGICVISION, INC.  		  
	  	Borrower’s
      Name  	 	The following person is authorized to
      request the 
	  	  		loan payment transfer/loan advance on
      the 
	FROM:  	  		designated account and is known to
      me. 
	  	Authorized
      Signer’s Name  		  
	 			 	  	 
	FROM:  	  			Authorized Requester & Phone # 	 
	  	Authorized
      Signature (Borrower)  		  
	 				  	 
	PHONE #:  	  			Received by (Bank) & Phone # 	 
	 			
	FROM ACCOUNT#:  	  		  	  	 
	(please include Note number, if
      applicable)  			Authorized Signature (Bank) 	 
	 			
	TO ACCOUNT #:  	  		  
	(please include Note number, if
      applicable)  		  
	  	 	 

	  	  	  	 For Bank Use Only 
	REQUESTED TRANSACTION TYPE 	  REQUESTED
      DOLLAR 	  	  	  
	AMOUNT 	  	  	Date
      Rec’d: 	  	  
	  	  	  	Time:  	  	  
	PRINCIPAL INCREASE* (ADVANCE) 	$ 	  	 	Comp.
      Status: 	YES 	NO 
	PRINCIPAL PAYMENT (ONLY) 	$ 	  	 	Status
      Date: 	  	  
	  	  	  	Time: 	  	  
	OTHER INSTRUCTIONS:  	  	  	Approval: 	  	  
	 	 	  	 	 	 		 
	 	 	 	 	 			 
	 	 	 	 	 	 		 
	 	 	 	 	 	 

All representations and warranties of
Borrower stated in the Third Amended and Restated 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,
including without limitation the representation that Borrower has paid for and
owns the equipment financed by the Bank; provided, however, that those
representations and warranties the date expressly referring to another date
shall be true, correct and complete in all material respects as of such
date.

Exhibit C – Page 1

*IS THERE A WIRE REQUEST TIED TO THIS
LOAN ADVANCE? (PLEASE CIRCLE ONE)      
YES       NO

If YES, the Outgoing Wire Transfer
Instructions must be completed below.

	  OUTGOING WIRE
      TRANSFER INSTRUCTIONS	  Fed Reference
      Number	  Bank Transfer
      Number
	 		
	 		
	The items
      marked with an asterisk (*) are required to be completed.
	 
	  *Beneficiary
      Name		
	  *Beneficiary Account
      Number		
	  *Beneficiary
      Address		
	  Currency
    Type	US DOLLARS
      ONLY
	  *ABA Routing Number
      (9 Digits)		
	  *Receiving
      Institution Name		
	  *Receiving
      Institution Address		
	  *Wire
    Amount	  $	

Exhibit C – Page 2

EXHIBIT D

Form of Borrowing Base
Certificate

	Borrower:
      LOGICVISION			
				Bank:
      Comerica Bank
	Commitment Amount:
      $2,000,000	Technology
      & Life Sciences Division
				Loan Analysis
      Department
				Five Palo
      Alto Square, Suite 800
				3000 El
      Camino Real
				Palo Alto, CA
      94306
				Phone: (650)
      846-6820
		 		Fax: (650)
      846-6840
	 	 
	ACCOUNTS
      RECEIVABLE			
		1.	Accounts Receivable
      Book Value as of	$	 	 
		2.	Additions (please
      explain on reverse)	$		 
		3.	TOTAL ACCOUNTS
      RECEIVABLE AS OF ____________		 	$
	 	
	ACCOUNTS
      RECEIVABLE DEDUCTIONS (without duplication)			
		4.	Amounts over 90
      days	$		
		5.	Credit Balances over 90
      days	$	 	 
		6.	Balance of 25% over 90
      days	$		
		7.	Concentration limits 20% (40% where account debtor is Broadcom,
      LSI/Agere, Qualcomm or Intel)	$		
		8.	Ineligible Foreign
      Accounts	$		
		9.	Government
      Accounts	$		
		10.	Contra
    Accounts	$		
		11.	Promotion or Demo
      Accounts	$		
		12.	Intercompany/Employee
      Accounts	$		
		13.	Other (please explain
      below)	$		
		14.	TOTAL ACCOUNTS
      RECEIVABLE DEDUCTIONS			$
		15.	Eligible Accounts
      (#1-#14)	$		
		16.	LOAN VALUE OF
      ACCOUNTS RECEIVABLE (80% of #15)	$	 
	 	 
	BALANCES			
		17.	Maximum Loan
      Amount	$2,000,000		
		18.	Total Funds Available
      (the lesser of #16 or #17)			$
		19.	Outstanding under
      Sublimits ()			$
		20.	Present balance
      outstanding on Line of Credit			$
		21.   
      	Reserve Position (#18
      minus #19 and #20)			$

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 Comerica Bank.

	Comments:	 	BANK USE ONLY	  
		 	 	  
		   Rec’d By:   	 
    	 
		   Date:	 	 
	 	 	   Reviewed By:	 	 
	Authorized
      Signer	   Date:	   	 
    
		  	 
    	 

Exhibit D – Page 1

EXHIBIT E

Form of Compliance
Certificate

	Please
      send all Required Reporting to:  	Comerica
      Bank  
	  	  	Technology & Life
      Sciences Division  
	  	  	Loan Analysis
      Department  
	  	  	Five Palo Alto Square,
      Suite 800  
	  	  	3000 El Camino
      Real  
	  	  	Palo Alto, CA
      94306  
	  	  	Phone: (650)
      846-6820  
	  	  	Fax: (650)
      846-6840  
	FROM:  	LOGICVISION,
      INC.  	  

The undersigned authorized Officer of
LogicVision, Inc. (“Borrower”), hereby certifies that in accordance with the
terms and conditions of the Third Amended and Restated Loan and Security
Agreement between Borrower and Bank (as amended from time to time, the
“Agreement”), (i) Borrower is in complete compliance for the period ending
__________________________ with all required covenants, including without
limitation the ongoing registration of intellectual property rights in
accordance with Section 6.8, except as noted below and (ii) all representations
and warranties of Borrower stated in the Agreement are true and correct in all
material respects as of the date hereof. Attached herewith are the required
documents supporting the above certification. The Officer further certifies that
these are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) and are consistently applied from one period to the next except as
explained in an accompanying letter or footnotes.

Please indicate compliance status by
circling Yes/No under “Complies” column.

	 
      REPORTING COVENANTS  	 
      REQUIRED  	 COMPLIES 
    
	  	 	       
	 
      Company Prepared F/S  	 
      Monthly, within 30 days  	YES 	NO 
	 
      Company Prepared F/S  	 
      Quarterly, within 45 days  	YES
      	NO
      
	 
      Compliance Certificate  	 
      Monthly, within 30 days  	YES
      	NO
      
	 
      CPA Audits, Unqualified F/S  	 
      Annually, within 90 days of FYE  	YES
      	NO
      
	 
      Intellectual Property Report  	 
      Quarterly, within 30 days  	YES
      	NO
      
	 
      A/R Aging  	 
      Monthly, within 30 days  	YES
      	NO
      
	 
      A/P Aging  	 
      Monthly, within 30 days  	YES
      	NO
      
	 
      Borrowing Base Certificate  	 
      Monthly, within 30 days  	YES
      	NO
      
	  	 	 	 
	 
      If Public:  	  	  	  
	 
      10-Q  	 
      Quarterly, within 5 days of SEC filing (50 days)  	YES
      	NO
      
	 
      10-K  	 
      Annually, within 5 days of SEC filing (95 days)  	YES
      	NO
      

	  FINANCIAL COVENANTS 	  REQUIRED 	  ACTUAL 	COMPLIES
      
	  	 	 	   
	  TO BE TESTED MONTHLY, UNLESS OTHERWISE
      NOTED:      
	  
	  Minimum Adjusted Quick
      Ratio,  	  2.50:1.00  	  __________:1.00 
    	YES 	NO
      
	 
      tested quarterly  	  	  	  	  
	 
      Min. Net Income/Max. Loss  	 
      See Section 6.7(b)  	 
      $___________________  	YES
      	NO
      

Please Enter Below Comments Regarding
Covenant Violations:

Exhibit E – Page 1

The Officer further acknowledges that
at any time Borrower is not in compliance with all the terms set forth in the
Agreement, including, without limitation, the financial covenants, no credit
extensions will be made.

	Very truly
      yours,	 	BANK USE ONLY	  
		 	 	  
	 	 	   Rec’d By:   	  	 
	Authorized Signer  	 	   Date:	 	 
	 
    	 	   Reviewed By:	 	 
	Name:  	 	   Date:	   	 
    
	 	 	   Financial Compliance
    Status: 	 YES/NO	
	Title:  	 	  	  	 

Exhibit E – Page 2

EXHIBIT F

LIBOR Addendum to Loan and Security
Agreement

 

 

 

 

 

 

LIBOR Addendum To Loan and
Security Agreement

     This
LIBOR Addendum to Loan and Security Agreement (this “Addendum”) is entered into
as of April 24, 2009, by and between Comerica Bank (“Bank”) and LogicVision,
Inc. (“Borrower”). This Addendum supplements the terms of the Third Amended and
Restated Loan and Security Agreement dated April 24, 2009 (as amended from time
to time, the “Agreement”).

1. Definitions. As used in this
Addendum, the following terms shall have the following meanings. Initially
capitalized terms used and not defined in this Addendum shall have the meanings
ascribed thereto in the Agreement.

     a.
“Applicable Margin” means (i) three and three quarter percent (3.75%) per annum
or (ii) if the entire balance of the account(s) maintained by Borrower with
Munder Capital is/are moved to an account of Borrower maintained at Bank, three
percent (3.00%) per annum.

     b.
“Business Day” means any day, other than a Saturday, Sunday or any other day
designated as a holiday under Federal or applicable State statute or regulation,
on which Bank is open for all or substantially all of its domestic and
international business (including dealings in foreign exchange) in Detroit,
Michigan and San Jose, California, and, in respect of notices and determinations
relating the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar
deposits are also carried on in the London interbank market and on which banks
are open for business in London, England.

     c. “Daily
Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is
equal to the Applicable Margin, plus the quotient of the
following:

	           
    	(1)	      	
      for any day, the per annum rate
      of interest determined on the basis of the rate for deposits in United
      States Dollars for a period equal to one (1) month appearing on Page BBAM
      of the Bloomberg Financial Markets Information Service as of 8:00 a.m.
      (California time) (or as soon thereafter as practical) on such day, or if
      such day is not a Business Day, on the immediately preceding Business Day.
      In the event that such rate does not appear on Page BBAM of the Bloomberg
      Financial Markets Information Service (or otherwise on such Service) on
      any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined
      by reference to such other publicly available service for displaying
      eurodollar rates as may be reasonably selected by Bank, or in the absence
      of such other service, the “Daily Adjusting LIBOR Rate” for such day
      shall, instead, be determined based upon the average of the rates at which
      Bank is offered dollar deposits at or about 8:00 a.m. (California time)
      (or as soon thereafter as practical), on such day, or if such day is not a
      Business Day, on the immediately preceding Business Day, in the interbank
      eurodollar market in an amount comparable to the principal amount of the
      Indebtedness and for a period equal to one (1) month;

		 
		 		divided by 
		 
		(2)		
      a percentage (expressed as a
      decimal) equal to 1.00 minus the maximum rate on such day at which Bank is
      required to maintain reserves on "Euro-currency Liabilities" as defined in
      and pursuant to Regulation D of the Board of Governors of the Federal
      Reserve System or, if such regulation or definition is modified, and as
      long as Bank is required to maintain reserves against a category of
      liabilities which includes eurodollar deposits or includes a category of
      assets which includes eurodollar loans, the rate at which such reserves
      are required to be maintained on such
category.

     d. “LIBOR
Lending Office” means Bank’s office located in the Cayman Islands, British West
Indies, or such other branch of Bank, domestic or foreign, as it may hereafter
designate as its LIBOR Lending Office by notice to Borrower.

     e. "Prime
Rate" means the per annum interest rate established by Bank as its prime rate
for its borrowers, as such rate may vary from time to time, which rate is not
necessarily the lowest rate on loans made by Bank at any such time.

     f.
"Prime-based Rate" means a per annum interest rate which is equal to the sum of
the Applicable Margin plus the greater of (i) the Prime Rate; or (ii) the
rate of interest equal to the sum of (a) one percent (1%), and (b) the rate of
interest equal to the average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers (the “Overnight Rates”), as published by the Federal Reserve Bank
of New York, or, if the Overnight Rates are not so published for any day, the
average of the quotations for the Overnight Rates received by Bank from three
(3) Federal funds brokers of recognized standing selected by Bank, as the same
may be changed from time to time.

2. Interest Rate Options.
Subject to the terms and conditions of this Addendum, the Indebtedness under the
Agreement shall bear interest at the Daily Adjusting LIBOR Rate, except during
any period of time during which, in accordance with the terms and conditions of
this Addendum, the Indebtedness under the Agreement shall bear interest at the
Prime-based Rate.

-1-

3. Payment of Interest. Accrued
and unpaid interest on the unpaid balance of the Indebtedness outstanding under
the Agreement shall be payable monthly, in arrears, on the third Business Day of
each month, until maturity (whether as stated herein, by acceleration, or
otherwise). In the event that any payment under this Addendum becomes due and
payable on any day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day, and, to the extent applicable,
interest shall continue to accrue and be payable thereon during such extension
at the rates set forth in this Addendum. Interest accruing hereunder shall be
computed on the basis of a year of 360 days, and shall be assessed for the
actual number of days elapsed, and in such computation, effect shall be given to
any change in the applicable interest rate as a result of any change in the
Daily Adjusting LIBOR Rate or, to the extent applicable, the Prime-based Rate on
the date of each such change.

4. Bank’s Records. The amount
and date of each advance under the Agreement, its applicable interest rate, and
the amount and date of any repayment shall be noted on Bank's records, which
records shall be conclusive evidence thereof, absent manifest error;
provided, however, any failure by Bank to make any such notation, or
any error in any such notation, shall not relieve Borrower of its obligations to
repay Bank all amounts payable by Borrower to Bank under or pursuant to this
Addendum and the Agreement, when due in accordance with the terms hereof. For
any advance under the Agreement bearing interest at the Daily Adjusting LIBOR
Rate, if Bank shall designate a LIBOR Lending Office which maintains books
separate from those of the rest of Bank, Bank shall have the option of
maintaining and carrying such advance on the books of such LIBOR Lending
Office.

5. Default Interest Rate. From
and after the occurrence of any Event of Default, and so long as any such Event
of Default remains unremedied or uncured thereafter, the Indebtedness
outstanding under the Agreement shall bear interest at a per annum rate of five
percent (5%) above the otherwise applicable interest rate hereunder, which
interest shall be payable upon demand. In addition to the foregoing, a late
payment charge equal to five percent (5%) of each late payment hereunder may be
charged on any payment not received by Bank within ten (10) calendar days after
the payment due date therefor, but acceptance of payment of any such charge
shall not constitute a waiver of any Event of Default under the Agreement. In no
event shall the interest payable under this Addendum and the Agreement at any
time exceed the maximum rate permitted by law.

6. Prepayment. Borrower may
prepay all or part of the outstanding balance of any Indebtedness at any time
without premium or penalty. Any prepayment hereunder shall also be accompanied
by the payment of all accrued and unpaid interest on the amount so prepaid.
Borrower hereby acknowledges and agrees that the foregoing shall not, in any way
whatsoever, limit, restrict, or otherwise affect Bank’s right to make demand for
payment of all or any part of the Indebtedness under the Agreement due on a
demand basis in Bank’s sole and absolute discretion.

7. Regulatory Developments or Other Circumstances Relating to the Daily
Adjusting LIBOR Rate.

     a. If, at
any time, Bank determines that, (1) Bank is unable to determine or ascertain the
Daily Adjusting LIBOR Rate, or (2) by reason of circumstances affecting the
foreign exchange and interbank markets generally, deposits in eurodollars in the
applicable amounts or for the relative maturities are not being offered to Bank,
or (3) the Daily Adjusting LIBOR Rate will not accurately or fairly cover or
reflect the cost to Bank of maintaining any of the Indebtedness under this
Addendum at the Daily Adjusting LIBOR Rate, then Bank shall forthwith give
notice thereof to Borrower. Thereafter, until Bank notifies Borrower that such
conditions or circumstances no longer exist, the Prime-based Rate shall be the
applicable interest rate for all Indebtedness during such period of time.

     b. If,
after the date hereof, the introduction of, or any change in, any applicable
law, rule or regulation or in the interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by Bank (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority, shall
make it unlawful or impossible for the Bank (or its LIBOR Lending Office) to
make or maintain any Indebtedness under the Agreement with interest at the Daily
Adjusting LIBOR Rate, Bank shall forthwith give notice thereof to Borrower.
Thereafter, until Bank notifies Borrower that such conditions or circumstances
no longer exist, the Prime-based Rate shall be the applicable interest rate for
all Indebtedness during such period of time.

     c.
Further, at any time upon prior written notice to the undersigned, Bank may, in
its sole discretion based upon its good faith belief that the Prime-based Rate
is an appropriate basis for its floating rate loans, suspend use of the Daily
Adjusting LIBOR Rate as the applicable interest rate hereunder, at which time,
the Prime-based Rate shall thereafter be the applicable interest rate for all
Indebtedness outstanding under the Agreement, unless Bank, in its sole
discretion based upon its good faith belief that the Prime-based Rate is no
longer an appropriate basis for its floating rate loans, rescinds such notice,
in which case, the Daily Adjusting LIBOR Rate shall, upon written notice from
Bank to the undersigned, again be the applicable interest rate for all
Indebtedness outstanding under the Agreement. 

     d. If the
adoption after the date hereof, or any change after the date hereof in, any
applicable law, rule or regulation (whether domestic or foreign) of any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank (or its LIBOR
Lending Office) with any request or directive (whether or not having the force
of law) made by any such authority, central bank or comparable agency after the
date hereof: (a) shall subject Bank (or its LIBOR Lending Office) to any tax,
duty or other charge with respect to this Addendum or any Indebtedness under the
Agreement, or shall change the basis of taxation of payments to Bank (or its
LIBOR Lending Office) of the principal of or interest under this Addendum or any
other amounts due under this Addendum in respect thereof (except for changes in
the rate of tax on the overall net income of Bank or its LIBOR Lending Office
imposed by the jurisdiction in which Bank's principal executive office or LIBOR
Lending Office is located); or (b) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by Bank (or
its LIBOR Lending Office), or shall impose on Bank (or its LIBOR Lending Office)
or the foreign exchange and interbank markets any other condition affecting this
Addendum or the Indebtedness; and the result of any of the foregoing is to
increase the cost to Bank of maintaining any part of the Indebtedness or to
reduce the amount of any sum received or receivable by Bank under this Addendum
by an amount deemed by the Bank to be material, then Borrower shall pay to Bank,
within fifteen (15) days of Borrower’s receipt of written notice from Bank
demanding such compensation, such additional amount or amounts as will
compensate Bank for such increased cost or reduction. A certificate of Bank,
prepared in good faith and in reasonable detail by Bank and submitted by Bank to
Borrower, setting forth the basis for determining such additional amount or
amounts necessary to compensate Bank shall be conclusive and binding for all
purposes, absent manifest error.

-2-

     e. In the
event that any applicable law, treaty, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or not presently applicable to
Bank, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by Bank with any guideline, request or directive of any such
authority (whether or not having the force of law), including any risk-based
capital guidelines, affects or would affect the amount of capital required or
expected to be maintained by Bank (or any corporation controlling Bank), and
Bank determines that the amount of such capital is increased by or based upon
the existence of any obligations of Bank hereunder or the maintaining of any
Indebtedness, and such increase has the effect of reducing the rate of return on
Bank's (or such controlling corporation's) capital as a consequence of such
obligations or the maintaining of such Indebtedness to a level below that which
Bank (or such controlling corporation) could have achieved but for such
circumstances (taking into consideration its policies with respect to capital
adequacy), then Borrower shall pay to Bank, within fifteen (15) days of
Borrower's receipt of written notice from Bank demanding such compensation,
additional amounts as are sufficient to compensate Bank (or such controlling
corporation) for any increase in the amount of capital and reduced rate of
return which Bank reasonably determines to be allocable to the existence of any
obligations of the Bank hereunder or to maintaining any Indebtedness. A
certificate of Bank as to the amount of such compensation, prepared in good
faith and in reasonable detail by the Bank and submitted by Bank to Borrower,
shall be conclusive and binding for all purposes absent manifest
error.

8. Legal Effect. Except as
specifically modified hereby, all of the terms and conditions of the Agreement
remain in full force and effect.

9. Conflicts. As to the matters
specifically the subject of this Addendum, in the event of any conflict between
this Addendum and the Agreement, the terms of this Addendum shall
control.

[Remainder of Page Intentionally Left
Blank]

-3-

     IN WITNESS WHEREOF, the parties have
agreed to the foregoing as of the date first set forth above.

LOGICVISION, INC.

	By:  	 
		 
	Its:	 

COMERICA BANK

	By:  	 
		 
	Its:	 

-4-exhibit101april302009.htm

     

    Exhibit
10.1

     

    MARKET
CENTER SERVICE AGREEMENT

    Contract
Identification MC11987

     

    This
Market Center Service Agreement (MC Service Agreement) is entered into by Great
Lakes Gas Transmission Limited Partnership (Transporter) and TRANSCANADA GAS
STORAGE USA INC. (Shipper).

     

    WHEREAS,
Shipper has requested Transporter to provide Market Center Services and
Transporter represents that it is willing to provide such Market Center Services
under the terms and conditions of this MC Service Agreement.

     

    NOW,
THEREFORE, Transporter and Shipper agree that the terms below constitute the
Market Center Services to be provided and the rights and obligations of Shipper
and Transporter.

     

    
       

      
        
          	
                  1.

                	
                  EFFECTIVE DATE: February 27,
  2009

                

        

        
        

        
           

          
            
              	
                      2.

                    	
                      CONTRACT IDENTIFICATION: MC11987

                    

            

            
            

            
               

              
                
                  	
                          3.

                        	
                          RATE SCHEDULE:
      MC

                        

                

                
                

                
                   

                  
                    
                      	
                              4.

                            	
                              SHIPPER TYPE:
      Other

                            

                    

                    
                    

                    
                      
                         

                        
                          
                            	
                                    5.

                                  	
                                    STATE/PROVINCE OF
      INCORPORATION: Delaware

                                  

                          

                          
                          

                          
                            
                               

                              
                                
                                  	
                                          6.

                                        	
                                          TERM:        

                                          

                                            March
      01, 2009 to October 31, 2009, and then month to month thereafter unless
      terminated by either party, upon a minimum of 30 days written
      notice.

                                          

                                        

                                

                                
                                

                                
                                  
                                     

                                    
                                      
                                        	
                                                7.

                                              	
                                                EFFECT ON PREVIOUS
      CONTRACTS:

                                                

                                                  This
      Agreement supersedes, cancels and terminates, as of the effective date
      stated above, the following contract(s):
  N/A

                                                

                                              

                                      

                                      
                                      

                                      
                                         

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        	
                8.

              	
                MAXIMUM DAILY QUANTITY
      (Dth/Day):

              

      

      

        
          	 
      	
                   Begin
Date

                	
                  End
      Date

                	
                  Point(s) of Primary
      Receipt

                	
                  Point(s) of Primary
      Delivery

                	
                  MDQ

                
	 
      	 03/01/2009	10/31/2009	 All
      Locations	 All
      Locations	 500,000

        

      

       

      
        	
                9.

              	
                MAXIMUM QUANTITY (Dth):
      N/A

              

      

       

      
        
          	
                  10.

                	
                  RATES:

                

        

        
          	
                   
      

                	
                  Unless
      Shipper and Transporter have agreed to a rate other than the maximum rate,
      rates shall be Transporter's maximum rates and charges plus all applicable
      surcharges in effect from time to time under the applicable Rate Schedule
      (as stated above) on file with the Commission unless otherwise agreed to
      by the parties in writing. Provisions governing a rate other than maximum
      shall be set forth in this Paragraph 10 and/or on Appendix A
      hereto.

                

        

         

        
          	
                   
      

                	
                  The
      actual rate(s) to be charged on any particular Gas Day shall be posted on
      Great Lakes’ Web Site in accordance with Section 4.1 of Rate Schedule MC
      of Great Lakes’ FERC Gas Tariff, Second Revised Volume No 1. Shipper’s
      nomination for service under Rate Schedule MC shall evidence Shipper’s
      acceptance of the actual rate(s) to be charged for the service being
      nominated and shall obligate Shipper to pay all charges calculated using
      those rates as applied to quantities
scheduled.

                

        

         

        
          
            
              	
                      11.

                    	
                      POINTS OF RECEIPT AND
      DELIVERY:

                    

            

            
              	
                       
      

                    	
                      Shipper
      may nominate any receipt or delivery point on Transporter’s system as a
      Market Center Point under this rate
schedule.

                    

            

             

          

        

      

      
        	
                12.

              	
                INCORPORATION OF TARIFF INTO
      AGREEMENT:

              

      

      
        	
                 
      

              	
                This
      MC Service Agreement shall incorporate and in all respects be subject to
      the "General Terms and Conditions" and Rate Schedule MC set forth in
      Transporter's FERC Gas Tariff, Second Revised Volume No. 1, as may be
      revised from time to time. Transporter may file and seek Commission
      approval under Section 4 of the Natural Gas Act (NGA) at any time and from
      time to time to change any rates, charges or provisions set forth in Rate
      Schedule MC and the "General Terms and Conditions" in Transporter's FERC
      Gas Tariff, Second Revised Volume No. 1, and Transporter shall have the
      right to place such changes in effect in accordance with the NGA, and this
      MC Service Agreement shall be deemed to include such changes and any such
      changes which become effective by operation of law and Commission Order,
      without prejudice to Shipper's right to protest the
  same.

              

      

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      
         

        
          
            
              	
                      13.

                    	
                      MISCELLANEOUS:

                    

            

            
              	
                       
      

                    	
                      No
      waiver by either party to this MC Service Agreement of any one or more
      defaults by the other in the performance of this MC Service Agreement
      shall operate or be construed as a waiver of any continuing or future
      default(s), whether of a like or a different character.

                       

                      Any controversy between the parties arising
      under this MC Service Agreement and not resolved by the parties shall be
      determined in accordance with the laws of the State of
      Michigan.

                    

            

             

          

        

      

      
        	 	 
	
                14.  

              	
                OTHER
      PROVISIONS:

              

      

      
        	
                 
      

              	
                It
      is agreed that no personal liability whatsoever shall attach to, be
      imposed on or otherwise be incurred by any Partner, agent, management
      official or employee of the Transporter or any director, officer or
      employee of any of the foregoing, for any obligation of the Transporter
      arising under this MC Service Agreement or for any claim based on such
      obligation and that the sole recourse of Shipper under this MC Service
      Agreement is limited to assets of the Transporter.

                 

                Upon termination of this MC Service
      Agreement, Shipper's and Transporter's obligations to each other arising
      under this MC Service Agreement, prior to the date of termination, remain
      in effect and are not being terminated by any provision of this MC Service
      Agreement.

                 

                Pursuant to Subsection 2.1(I) of Rate
      Schedule MC, failure by Shipper to comply with notice from Transporter to
      remove and/or return Gas within the time frame specified may result in the
      termination of Shipper’s MC Service
Agreement.

              

      

       

      
        	
                15.  

              	
                NOTICES AND
      COMMUNICATIONS:

                All notices and communications with respect to
      this MC Service Agreement shall be in writing and sent to the addresses
      stated below or at any other such address(es) as may be designated in
      writing:

              

      

       

      
        
          	 
      	
                  ADMINISTRATIVE
      MATTERS

                  Great
      Lakes Gas Transmission Limited

                  Partnership

                  5250
      Corporate Drive

                  Troy,
      MI  48098

                  Attn:  Transportation
      Services

                	
                   

                  TRANSCANADA
      GAS STORAGE U.S.A. INC.

                  450
      1st
      Street SW

                  Calgary,

                  AB  T2P
      5H1

                  Canada

                  Att:  Mike
      Speed

                
	 
      	 
      	 
      
	 
      	
                  PAYMENT
      BY ELECTRONIC TRANSFER

                  Great
      Lakes Gas Transmission Limited

                  Partnership

                  Citibank,
      NA, New York, NY

                  ABA
      No: 021000089

                  Account
      No: 3076-5207

                	
                   

                  TRANSCANADA
      GAS STORAGE U.S.A. INC.

                  Att:

                

        

        
          
             

          

          
            31

            
              

            

          

          
             

          

        
   

      
        
          	 
      	 
      	 
      
	 
      	
                  AGREED
      TO BY:

                   

                  GREAT
      LAKES GAS TRANSMISSION

                  LIMITED
      PARTNERSHIP

                  By:
      Great Lakes Gas Transmission Company

                	
                   

                   

                   

                  TRANSCANADA
      GAS STORAGE U.S.A. INC.

                
	 
      	 
      	 
      
	 
      	
                  Operator
      and Agent for Great Lakes Gas Transmission Limited
    Partnership

                	 
      
	 
      	 
      	 
      
	 
      	
                  By:    /s/ Joseph E.
      Pollard                                               

                	
                  By:   /s/ Brandon
      Anderson                        

                
	 
      	
                  Joseph E. Pollard

                  Title:
      Director, Transportation Services

                	
                  Brandon Anderson

                  Title:
      Vice President, Gas Storage

                
	 	 	 
	 
      	 
      	 
      
	 
      	 
      	
                  By:   /s/ Karl
      Johannson                              

                  Karl Johannson

                  Title:
      Sr. Vice President, Power Commercial

                
	 
      	 
      	 
      

        

       

       

       

      32

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]