Document:

exv10w11

 

Exhibit 10.11

August 30, 2006

David Butler

17370 Skyline Blvd

Woodside, CA 94062

Re: Separation Agreement and General Release of All Claims

Dear Dave:

     This Separation Agreement and General Release of All Claims (“Separation
Agreement”), upon your signature, will constitute the agreement between you and
Aruba Wireless Networks, Inc. (“Aruba”) on the terms of your separation from
employment with Aruba.

     1. Your employment will terminate effective Friday, September 8, 2006 (the “Termination
Date”). The Termination Date and the remaining provisions of this Separation Agreement are
contingent on your continued fulfillment of your current job duties and compliance with Company
policies through September 8, 2006.

     2. As of the Termination Date, you will have been paid your earned salary, accrued vacation
pay, all other wages, and all other amounts Aruba owed to you through the Termination Date,
including but not limited to any bonuses, commissions or other contingent compensation. Any
outstanding expense reports must be submitted by the Termination Date and will be reviewed and
reimbursed, if approved, consistent with Company policy.

     3. You have received or will receive by separate cover information regarding your rights to
health insurance continuation and your retirement benefits. To the extent that you have such
rights, nothing in this agreement will impair those rights.

     4. On May 19, 2003, the Company granted you an option (grant no. SO-00064) to purchase
526,815 shares of its Common Stock (the “First Option”). You exercised the First Option for all
526,815 shares. As of the Termination Date, you will be vested in 428,038 of the shares that
you purchased by exercising the First Option. Although you are not otherwise legally entitled to
it, in consideration of your acceptance of this Separation Agreement, you will become vested in
the remaining 98,777 shares on the Effective Date (as defined in Section 15). You acknowledge
that, by the original terms of the First Option, no additional shares would have vested. In all
other respects, the Stock Option Agreement, dated May 19, 2003, between you and the Company will
remain in full force and effect and you agree to remain bound by that Agreement.

     5. On October 6, 2005, the Company granted you an additional option (grant no. SO-00396) to
purchase 60,000 shares of the Company’s Common Stock

 

 

David Butler

August 30, 2006

Page 2

(the “Second Option”). As of the Termination Date, you will be vested in none of
the shares subject to the Second Option. Although you are not otherwise legally
entitled to it, in consideration of your acceptance of this Separation Agreement,
you will become vested in 15,000 of the shares subject to the Second Option,
effective as of the date immediately prior to the Termination Date. In addition, if
you sign this Agreement, on the Effective Date the Company will extend the
post-termination exercise period applicable to the Second Option so that it will
expire with respect to the vested shares on January 31, 2007. For purposes of
clarity, none of the shares subject to the Second Option shall be exercisable
unless and until the Effective Date, at which time the Second Option will be
exercisable with respect to the 15,000 vested shares at any time that occurs (a)
after the Effective Date and (b) on or prior to January 31, 2007. The Second Option
will expire with respect to the remaining unvested shares on the Termination Date.
You acknowledge that, by the original terms of the Second Option, no shares would
have vested. In addition, you acknowledge and agree that the extension of the post-termination exercise period constitutes a modification of the Second Option and
that, accordingly, the Second Option will no longer be eligible for incentive stock
option treatment as of the date of this Agreement. In all other respects, the Stock
Option Agreement, dated October 6, 2005, between you and the Company will remain in
full force and effect, and you agree to remain bound by that Agreement.

     6. Other than the First and Second Options and the option (grant no. SO-00104) to purchase
154,167 shares of the Company’s Common Stock granted to you on October 21, 2003 (the “Third
Option”), you acknowledge and agree that you have no stock or stock option rights in the Company.
As of the Termination Date, you will be vested in 109,202 of the shares subject to the Third
Option. Although you are not otherwise legally entitled to it, in consideration of your
acceptance of this Separation Agreement on the Effective Date the Company will extend the
post-termination exercise period applicable to the Third Option so that it will expire with respect
to the vested shares on January 31, 2007. The Third Option will expire with respect to the
remaining unvested shares on the Termination Date. You acknowledge and agree that the extension
of the post-termination exercise period constitutes a modification of the Third Option and that,
accordingly, the Third Option will no longer be eligible for incentive stock option treatment as of
the date of this Agreement. In all other respects, the Stock Option Agreement, dated October 21,
2003, between you and the Company will remain in full force and effect, and you agree to remain
bound by that Agreement.

     7. You have returned or will immediately return to Aruba all Aruba documents and other company
property, including but not limited to any information you have about Aruba’s practices,
procedures, trade secrets, customer lists, product marketing, or other confidential information.
You acknowledge that you have been the recipient of confidential and proprietary Aruba information,
and that you shall not use or disclose such information except as may be permitted by Aruba in
writing or by law. You hereby reaffirm your agreements and undertakings as set forth in the
Proprietary Information and

 

 

David Butler

August 30, 2006

Page 3

Invention Agreement you signed on May 19, 2003, which shall survive this Agreement.
Nothing in this Agreement supersedes or renders the terms and conditions of the
Proprietary Information and Invention Agreement void or unenforceable.

     8. You waive and release and promise never to assert any and all claims that you have or might
have against Aruba and its predecessors, successors, subsidiaries, affiliates, related entities,
and assigns, and all of its and their respective past, present and future partners, principals,
officers, directors, shareholders, employees, attorneys, insurers, representatives and agents,
whether acting as agents or in individual capacities (collectively “Releasees”), arising from or
related to your employment with Aruba and/or the termination of your employment with Aruba.

     These claims include, but are not limited to, claims arising under federal,
state and local statutory or common law, such as the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the California Fair Employment and Housing Act, the California
Labor Code, the Employee Retirement and Income Security Act, the law of contract
and tort, including any contract or offer letter between you and Aruba, any
compensation plan or policy, and any claims for attorney’s fees and costs.

     You also waive and release and promise never to assert any such claims, even
if you do not believe that you have such claims. You therefore waive your rights
under § 1542 of the Civil Code of California which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

You understand and agree that claims or facts in addition to or different from those which are now
known or believed by you to exist may hereafter be discovered, but it is your intention to release
all claims you have or may have against the Releasees, whether known or unknown, suspected or
unsuspected. Notwithstanding any of the foregoing, you do not waive any rights you may have to
vested benefits under Aruba’s 401k Plan.

     9. You will not, unless required or otherwise permitted by law, disclose to others any
information regarding the terms of this Separation Agreement, the benefit being paid under it or
the fact of its payment, except that you may disclose this information to your spouse, attorney,
accountant or other professional advisor to whom you must make the disclosure in order for them to
render professional services to you. You will instruct them, however, to maintain the
confidentiality of this information just

 

 

David Butler

August 30, 2006

Page 4

as you must. You further agree not to aid, assist or encourage any person(s) asserting claims
against Releasees, other than by providing truthful testimony as a result of a lawfully issued
subpoena.

     10. You agree that during for a period of twelve (12) months immediately following the
Termination Date you shall not, either directly or indirectly solicit, induce, recruit or encourage
any of the Company’s employees or consultants to terminate their relationship with the Company, or
attempt to solicit, induce, recruit, encourage or take away employees or consultants of the
Company, either for yourself or for any other person or entity.

     11. You agree to cooperate with Aruba in litigation or administrative proceedings involving
Aruba that relate to matters about which you may have knowledge arising from your employment,
including but not limited to speaking with Aruba’s representatives about such litigation or
administrative proceedings and the facts and circumstances upon which the litigation or
administrative proceeding is based, without requiring Aruba to subpoena you. Nothing in this
paragraph is intended to require or suggest that, if called to testify in relation to such
litigation or administrative proceeding, you would testify other than truthfully.

     12. If you sue any Releasee for any reason relating to any subject matter released herein, you
shall pay any sued Releasee all of Releasee’s reasonable attorney’s fees and costs incurred in each
such action, suit or other proceeding, including any and all appeals or petitions therefrom,
regardless of the outcome. This paragraph is not intended to limit you from participating in an
investigation conducted by the Equal Employment Opportunity Commission; provided, however, that you
expressly waive and relinquish any rights you might have to recover damages or other relief,
whether equitable or legal, in any such proceeding concerning events or actions that arose on or
before the date that you signed this Separation Agreement.

     13. You agree that you will not disparage or encourage or induce others to disparage Aruba and
the Releasees. Aruba agrees that its Officers and Directors will not disparage or encourage or
induce others to disparage you. For the purpose of this Agreement, “disparage” includes, without
limitation, making comments or statements to any person or entity including, but not limited to,
the press and/or media, employees, partners or principals of Aruba or any entity with whom Aruba
has a business relationship that would adversely affect in any manner (a) the conduct of the
business of Aruba or any of the Releasees (including, but not limited to, any business plans or
prospects) or (b) the reputation of you, Aruba or any of the
Releasees.

     14. You agree that no promise, inducement or other agreement not expressly contained in this
Separation Agreement or referred to in this Separation

 

 

David Butler

August 30, 2006

Page 5

Agreement, has been made conferring any benefit upon you, and that this Separation Agreement
contains the entire agreement between you and Aruba with respect to its subject matter. Other than
your Proprietary Information and Invention Agreement, all prior agreements, understandings,
representations, oral agreements and writings are expressly superseded hereby and are of no further
force and effect, and you expressly agree that you are not relying on any representations that are
not contained in this Agreement. You acknowledge and agree that the severance benefits described in
this Agreement are in lieu of the severance benefits described in the offer letter, dated May 13,
2003, between you and the Company (the “Offer Letter”), and that by signing this Agreement, you are
waiving your rights to the benefits described in the Offer Letter. This Separation Agreement is
entered into and governed by the laws of the State of California.

     15. The following is required by the Older Workers Benefit Protection Act:

     You have up to twenty-one (21) days from the date of this Separation Agreement, or September
20, 2006, to accept the terms of this Separation Agreement, although you may accept it at any time
within those twenty-one (21) days. You are advised to consult an attorney (at your own expense)
about the Separation Agreement.

     To accept the Separation Agreement, please sign and date this Separation Agreement and return
it to me. (An extra copy for your files is enclosed.) Once you sign and date this Separation
Agreement, you will have seven (7) days from the date you sign this Separation Agreement in which
to revoke your acceptance. To revoke, you must deliver a written statement of revocation, which
should be delivered to me. If you do not revoke, the eighth day after the date you signed and
dated this Separation Agreement will be the “Effective Date” of the Separation Agreement.

     Dave, I am pleased that we were able to part ways on these amicable terms. Aruba and I wish
you every success in your future endeavors.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ Aaron Bean
 	 
	 	Aaron Bean 	 
	 	VP, Human Resources 	 
	 

Enclosure

 

 

David Butler

August 30, 2006

Page 6

     By signing this Separation Agreement, I acknowledge that I have had the
opportunity to review this Separation Agreement carefully with an attorney of my
choice; that I understand the terms of the Separation Agreement; and that I
voluntarily agree to them.

Date: Aug 30, 2006

	 	 	 	 	 
	 	 	 
	 	                                        /s/ David Butler
 	 
	 	David Butlerexv10w12

 

	 	 	 	 	 

Exhibit 10.12

LOAN AND SECURITY AGREEMENT

     This Loan and Security Agreement No. 352040201 (this
“Agreement”) is entered into as of March 3,
2003, by and between Lighthouse Capital
Partners IV, L.P. (“Lender”) and Aruba Wireless Networks,
Inc., a Delaware corporation (“Borrower”).

Recitals

     Borrower wishes to borrow money from time to time from Lender and
Lender desires to lend money to Borrower. This Agreement sets forth the terms
on which Lender will lend to Borrower and Borrower will repay the loan to
Lender.

Agreement

     The parties agree as follows:

     1. Definitions and Construction

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

               “Affiliate” means any Person that owns or controls directly or indirectly five percent (5%) or
 more of the stock of another entity, any Person that controls or is controlled
by or is under common control with such Persons or any Affiliate of such
Persons or each of such Person’s officers, directors, joint venturers or
partners.

               “Basic Rate” means a per annum rate of interest (based on a year of 360 days and actual
 days elapsed) equal to 7.5%. If the Prime Rate as quoted in the western edition
of The Wall Street Journal (the “Prime Rate”) on the date ten (10) days prior
to each Loan Commencement Date is greater than 4.25%, the Loan Factor will be
adjusted upward to maintain an interest rate equal to the Prime Rate plus
3.25%. Once the Repayment Period begins for any Loan, there will be no further
adjustments to the Loan Factor for such Loan.

               “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.

               “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.

               “Code” means the Uniform Commercial Code as adopted and in effect in the State of
California, as amended from time to time.

               “Collateral”
means the Property described on Exhibit A attached hereto.

               “Commitment” means $1,750,000.00

               “Commitment Fee” means $5,000.00.

               “Commitment Termination Date” means December 31, 2003.

               “Contingent Obligation” means, as applied to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness,
lease, dividend, letter of credit or other obligation of another, including any
such obligation directly or indirectly guaranteed, endorsed (otherwise than for

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collection or deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise directly or indirectly
liable. The amount of any Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported.

               “Default” means any event which with the passing of time or the giving of notice or both
would become an Event of Default hereunder.

               “Default Rate” means the per annum rate of interest equal to fifteen percent (15%), but such
rate shall in no event be more than the highest rate permitted by applicable law to be charged on
commercial loans.

               “Event of Default” has the meaning given to such term in Section 8.

               “Event of Loss” has the meaning given to that term in Section 6.10.

               “Final Payment” means, with respect to each Loan, a payment (in addition to and not in
 substitution for the regular monthly payments of principal and accrued interest) due on the
Maturity Date, equal to the Loan Amount for such Loan at such time multiplied by the Final Payment
Percentage.

               “Final Payment Percentage” means 12.5%.

               “Funding Date” means any date on which a Loan is made to or on account of Borrower under this
Agreement.

               “Governmental Authority” means (a) any federal, state, county, municipal or foreign
government, or political subdivision thereof, (b) any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality or public body, (c) any court or
administrative tribunal or (d) with respect to any Person, any arbitration tribunal or other
non-governmental authority to whose jurisdiction that Person has consented.

               “Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase
price of Property or services, including reimbursement and other obligations with respect to
surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations.

               “Landlord Consent” means a consent in the form of Exhibit C or such other form as Lender may
agree to accept.

               “Lender’s Expenses” means all reasonable costs or expenses (including reasonable attorneys’
fees and expenses) incurred in connection with the preparation and negotiation, administration,
and enforcement of the Loan Documents; and Lender’s reasonable attorneys’ fees and expenses
incurred in amending, modifying, enforcing or defending the Loan Documents, including in the
exercise of any rights or remedies afforded hereunder or under applicable law, whether or not suit
is brought; provided, however, that Lender’s Expenses shall not exceed $5,000 for the preparation
and negotiation of the initial set of Loan Documents..

               “Lien” means any pledge, bailment, lease, mortgage, hypothecation, conditional sales and title
retention agreement, charge, claim, encumbrance or other lien in favor of any Person,

               “Loan” means each advance of credit by Lender to Borrower under this
Agreement.

               “Loan Agreement Supplement” means a supplement to this Agreement in substantially the form of
Exhibit D.

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               “Loan Amount” means, with respect to each Loan, as of any date, the original principal
amount of such Loan less the aggregate of all Prepayment Amounts relating to prepayments of such
Loan paid prior to such date.

               “Loan
Commencement Date” means, with respect to each Loan, the first Business Day of the
calendar month following the Funding Date of such Loan.

               “Loan Documents” means, collectively, this Agreement, the Warrant, the Landlord
Consent(s) and all other documents, instruments and agreements entered into between Borrower and
Lender in connection with this Agreement, all as amended or extended from time to time.

               “Loan Factor” means, collectively, with respect to each Loan the amount set forth as a
percentage in the Summary of Loan Agreement Supplement with respect to such Loan, calculated using
the Basic Rate applicable to such Loan. Initially for months 1 through 3 of the Repayment Period,
the Loan Factor shall be 0.6250% (the “Initial Loan
Factor”) (subject to adjustment to the Basic
Rate as set forth above); for months 4 through 39, the Loan Factor
shall be 3.0913% (the “Term
Loan Factor”) (subject to adjustment to the Basic Rate as set forth above).

               “Maturity Date” means, with respect to each Loan, the last day of the Repayment Period for
such Loan, or the date of prepayment under Section 2.5.

               “Minimum Funding Amount” means $10,000.00

               “Obligations” means all debt, principal, interest, fees, charges, expenses and attorneys’ fees
and costs and other amounts, obligations, covenants, and duties owing by Borrower to Lender of any
kind and description (whether pursuant to or evidenced by the Loan Documents, or by any other
agreement between Lender and Borrower, and whether or not for the payment of money), whether
direct or indirect, absolute or contingent, due or to become due, now existing or hereafter
arising, including the principal, interest and Final Payment due with respect to the Loans, and
including any debt, liability, or obligation owing from Borrower to others that Lender may have
obtained by assignment or otherwise, and further including all interest not paid when due and all
Lender’s Expenses that Borrower is required to pay or reimburse by the Loan Documents, by law, or
otherwise.

               “Payment Date” has the meaning given to that term in Section 2.4(a).

               “Permitted Liens” means the following:

                    (a) The Lien created by this Agreement;

                    (b) Liens for taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith by appropriate proceedings, provided the
same have no superior priority over Lender’s Lien in the Collateral; and

                    (c) Liens to secure payment of worker’s compensation,
employment
insurance, old age pensions or other social security obligations of Borrower in the ordinary
course of business of Borrower.

                    (d) Liens arising from final judgments, decrees or attachments for
which the
permissible time frame for filing appeals has expired; provided such Liens do not exceed $50,000
in the aggregate at any time outstanding; and

                    (e) Liens to secure the claims or demands of
landlords, carriers,
warehousemen, mechanics, laborers, materialmen and other like Persons arising by operation of
law in the ordinary course of business for sums which are not yet due and payable or liens which
are being contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves are maintained to the extent required by generally accepted
accounting principles.

3

 

               “Person” means and includes any individual, any partnership, any corporation, any business
trust, any joint stock company, any limited liability company, any unincorporated association or
any other entity and any domestic or foreign national, state or local government, any political
subdivision thereof, and any department, agency, authority or bureau of any of the foregoing.

               “Prepayment Amount” means in the case of a mandatory prepayment pursuant to
Sections 2.5(a) and 6.10, the original Stated Cost of the item of Collateral with respect to
which such prepayment relates.

               “Property” means any interest in any kind of property or asset, whether real, personal or
mixed, whether tangible or intangible.

               “Repayment Period” means the period beginning on the first Payment Date and continuing for 39
calendar months.

               “Responsible Officer” means each of the President and the Chief Financial Officer of Borrower.

               “Scheduled
Payments” has the meaning given to such term in Section 2.4(a).

               “Stated Cost” means with respect to an item of Collateral, the original cost to Borrower of
the item of Collateral net of any and all freight, installation, tax and other soft costs.

               “Stipulated
Loan Value” means, with respect to each Loan, the percentages set forth in Annex B
to the Loan Agreement Supplement for such Loan.

               “Subsidiary” means any corporation of which a majority of the outstanding capital stock
entitled to vote for the election of directors (otherwise than as the result of a default) is
owned by Borrower directly or indirectly through Subsidiaries.

               “Summary of Loan Agreement Supplement” means, with respect to each Loan, the
“Summary of Loan Agreement Supplement” attached as Annex C to the Loan Agreement Supplement
prepared by Lender in connection with such Loan.

               “Term” means the period from and after the date hereof until termination of the Commitment
and the payment in full of all Obligations, including amounts and liabilities payable under this
Agreement and the other Loan Documents, including principal and interest on the Loans and the
Final Payment with respect to each Loan.

               “Warrant” means the warrant in favor of Lender to purchase securities of Borrower
substantially in the form of Exhibit B.

     1.2 Other Interpretive Provisions. References in this Agreement to “Articles,” “Sections,”
“Exhibits,” “Schedules” and “Annexes” are to recitals, articles, sections, exhibits, schedules
and annexes herein and hereto unless otherwise indicated. References in this Agreement and each
of the other Loan Documents to any document, instrument or agreement shall include (a) all
exhibits, schedules, annexes and other attachments thereto, (b) all documents, instruments or
agreements issued or executed in replacement thereof, and (c) such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time
to time and in effect at any given time. The words “hereof,” “herein” and “hereunder” and words
of similar import when used in this Agreement or any other Loan Document shall refer to this
Agreement or such other Loan Document, as the case may be, as a whole and not to any particular
provision of this Agreement or such other Loan Document, as the case may be. The words “include”
and “including” and words or similar import when used in this Agreement or any other Loan
Document shall not be construed to be limiting or exclusive. Unless otherwise indicated in this
Agreement or any other Loan Document, all accounting terms used in this Agreement or any other
Loan Document shall be construed, and all

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accounting and financial computations hereunder or thereunder shall be computed, in accordance
with generally accepted accounting principles as in effect in the United States of America from
time to time.

     2. Loan and Terms of Payment

          2.1 Commitment. Subject to the terms and conditions of this Agreement and relying upon
the representations and warranties herein set forth as and when made or deemed to be made, Lender
agrees to lend to Borrower the Loans; provided that the aggregate principal amount of the Loans
shall not exceed the Commitment at such time; provided further, that the aggregate principal amount
of any Loan shall not exceed the Stated Cost of the equipment or soft costs, including
prototypes, financed with such Loan; provided further that such financed equipment is delivered to
Borrower within ninety (90) days of the Funding Date for such equipment. The foregoing
notwithstanding, with respect to the first Loan only, Lender agrees to finance equipment delivered
to Borrower on or after April 1, 2002 at an amount equal to the Stated Cost of such equipment,
provided such funding occurs within thirty (30) days of the date of this Agreement. If prepaid,
the principal of the Loans may not be re-borrowed. The aggregate principal amount of any Loans
relating to the financing of Soft Costs shall not exceed in the aggregate fifty percent (50%) of
the Commitment.

          2.2 Use of Proceeds; The Loan.

               (a) Use of Proceeds. The proceeds of the Loan shall be used solely for the
acquisition
of new and used computers, peripherals, analytical and test equipment, laboratory equipment and
furniture, office furniture and equipment, Soft Costs (as defined below) in an amount not to exceed
fifty percent (50%) of the aggregate Commitment, and other equipment as approved by Lender. Each
invoice for such equipment shall a have a minimum value of Five Hundred Dollars ($500). “Soft
Costs” shall mean software, leasehold improvements, Prototypes, taxes, warranty charges,
installation expense and other similar expenses and other soft costs acceptable to Lender.
“Prototype” shall mean working units that could be shipped to a customer or used internally by
Borrower. For a Prototype to be eligible for financing, Borrower must provide Lender with the
serial number of the Prototype, the name of the company at which the Prototype will be located and
its address, as well as a bill of materials or other documents reasonably acceptable to Lender
indicating the cost of the Prototype. Borrower shall provide Lender with proof of vendor payment on
assets representing at least 50% of the dollar value of all financed Prototypes. All Prototypes
must be kept at 100% of their Stated Costs until Final Payment.

               (b) The Loans. The Loans shall be repayable in consecutive monthly
installments in
accordance with the terms of Section 2.4. Lender may, and is hereby authorized by Borrower to,
endorse in its books and records appropriate notations regarding Lender’s interest in the Loans;
provided, however, that the failure to make, or an error in making, any such notation shall not
limit or otherwise affect the Obligations of Borrower hereunder.

          2.3 Procedure for Making Loan.

               (a) Notice. With the exception of the first Loan hereunder which may be
funded
within a shorter time period with Lender’s approval, whenever Borrower desires that Lender make a
Loan, Borrower shall so notify Lender in writing (or by telephone with prompt confirmation in
writing) at least ten (10) Business Days in advance of the desired Funding Date, which notice shall
be irrevocable. Lender’s obligation to make Loans shall be expressly subject to the satisfaction
of the conditions set forth in Sections 3.1 and 3.2. Lender shall have the right, exercisable at
any time, to request that Borrower furnish Lender with such additional information with respect to
the Loans as Lender shall reasonably request.

               (b) Loan Interest Rate. Borrower shall pay interest on the unpaid principal
amount
of each Loan from the Loan Commencement Date until such Loan has been paid in full, at a per annum
rate of interest equal to the Basic Rate, determined as of the date that is ten (10) business days
prior to the Loan Commencement Date. The Basic Rate applicable to each Loan shall be fixed for the
Repayment Period and shall not be subject to change in the absence of a manifest error. All
computations of interest on each Loan shall be based on a year of 360 days for actual days elapsed.
Notwithstanding any other provision hereof, the amount of interest payable hereunder shall not in
any event exceed the maximum amount permitted by the law applicable to interest charged on
commercial loans.

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               (c) Loan Factor and Stipulated Loan Value Calculation. On each Loan
Commencement Date, Lender shall establish the Initial Loan Factor and Term Loan Factor and a
schedule of Stipulated Loan Values with respect to the applicable Loan. The Loan Factor shall be
calculated in a manner to fully amortize the Loan over the Repayment Period applicable to such Loan
in equal periodic installments of principal and interest. The Loan Factor and schedule of
Stipulated Loan Values applicable to such Loan shall be set forth in the Loan Agreement Supplement
prepared by Lender with respect to such Loan and shall be conclusive in the absence of a manifest
error.

               (d) Disbursement.
Subject to the satisfaction of the conditions set
forth in
Sections 3.1 and 3.2 with respect to the initial Loan and the satisfaction of the conditions set
forth in Section 3.2 with respect to each subsequent Loan, Lender shall disburse the Loans.

               (e) Termination of Commitment to Lend. Notwithstanding anything in the
Loan
Documents, Lender’s obligation to lend the undisbursed portion of the Commitment to Borrower
hereunder shall terminate on the earlier of (i) at the Lender’s sole election, the occurrence and
continuance of any Default or Event of Default hereunder, and (ii) the Commitment Termination Date.
Notwithstanding the foregoing, Lender’s obligation to lend the undisbursed portion of the
Commitment to Borrower shall terminate if, in Lender’s sole but good faith judgment, there has been
a material adverse change in the general affairs, management, results of operations, or financial
condition of Borrower, whether or not arising from transactions in the ordinary course of business,
or there has been any material adverse deviation by Borrower from the business plan of Borrower
presented to and not disapproved by Lender, since the date of this Agreement.

          2.4 Amortization of Principal and Interest; Interim Payment; Final Payment.

               (a) Principal and Interest Payments On Payment Dates. Borrower shall make
payments of principal and accrued interest in advance for each Loan (collectively, “Scheduled
Payments”), commencing on the Loan Commencement Date (or commencing on the Funding Date if the
Funding Date is the first Business Day of the calendar month) with respect to such Loan and
continuing thereafter during the Repayment Period on the first Business Day of each calendar month
(each a “Payment Date”), in an amount equal to the Loan Factor multiplied by the Loan Amount for
such Loan as of such Payment Date. In any event, all unpaid principal and accrued interest shall
be due and payable in full on the last Payment Date with respect to such Loan.

               (b) Interim Payment. In addition to the Scheduled Payments, on the Loan
Commencement Date for the Loan (unless the Funding Date is the first Business Day of the calendar
month) Borrower shall pay to Lender an amount (the “Interim Payment”) equal to the initial Loan
Amount multiplied by the product of (i) the quotient derived from dividing the Basic Rate by three
hundred sixty (360), and (ii) the number of days from the Funding Date of the Loan until the first
Payment Date with respect to the Loan.

               (c) Final Payment. On the Maturity Date, Borrower shall pay, in addition
to the
unpaid principal and accrued interest and all other amounts due on such date with respect to such
Loan, an amount equal to the Final Payment with respect to such Loan.

               (d) Commitment Fee. The Commitment Fee shall be applied to the expenses, advance payment,
interim payments, the first month’s payment and every subsequent payment until fully applied.

               (e) Late Fee. A late charge on any Scheduled Payments or other sums due hereunder which are
past due more than ten (10) days, in an amount equal to 2% of the past due amount, payable on
demand.

          2.5 Prepayments.

               (a) Prepayment Upon an Event of Loss. If any Collateral is subject to an Event of
Loss and Borrower is required to or elects to prepay the Loans with respect to such Collateral
pursuant to Section 6.10, then the Loans shall be prepaid to the extent and in the manner
provided in such section.

6

 

               (b) Mandatory Prepayment Upon an Acceleration. If the Loans are
accelerated
following the occurrence of an Event of Default or otherwise (other than following an Event of
Loss), then Borrower shall immediately pay to Lender (i) all unpaid Scheduled Payments with respect
to the Loans due prior to the date of prepayment, (ii) the Stipulated Loan Value with respect to
each Loan multiplied by the Loan Amount of such Loan, (iii) the Final Payment discounted from the
Maturity Date thereof to the prepayment date at the Prime Rate and (iv) all other sums, if any,
that shall have become due and payable hereunder with respect to such Loan.

               (c) Voluntary Prepayment. Borrower may voluntarily prepay the Loans,
provided
that each of the following conditions is satisfied: Borrower pays to Lender (i) all unpaid
Scheduled Payments with respect to the Loans due prior to the date of prepayment, (ii) the
outstanding principal amount of such Loans and any unpaid accrued interest of such Loans, (iii) the
Final Payment discounted from the Maturity Date thereof to the prepayment date at the Prime Rate
and (iv) all other sums, if any, that shall have become due and payable hereunder with respect to
the Loans.

               (d) No Other Prepayment. Borrower may not prepay any Loan except upon the
occurrence of an event described in Section 2.5(a),
(b) and (c) above in which event the prepayment
shall be made as described in such sections.

          2.6 Other Payment Terms.

               (a) Place and Manner. Borrower shall make all payments due to Lender at the address
specified in Section 11, in lawful money of the United States and in same day or immediately
available funds.

               (b) Date. Whenever any payment due hereunder shall fall due on a day other
than a
Business Day, such payment shall be made on the next succeeding Business Day, and such extension of
time shall be included in the computation of interest or fees, as the case may be.

               (c) Default Rate. If either (i) any amounts required to be paid by Borrower
under this
Agreement or the other Loan Documents (including principal, interest, the Final Payment payable
with respect to any Loan, and any fees or other amounts) remain unpaid after such amounts are due,
or (ii) an Event of Default has occurred and is continuing, Borrower shall pay interest on the
aggregate, outstanding balance hereunder from the date due or from the date of the Event of
Default, as applicable, until such past due amounts are paid in full or until all Events of Default
are cured, as applicable, at a per annum rate equal to the Default Rate. All computations of such
interest shall be based on a year of 360 days for actual days elapsed.

          2.7 Minimum Funding Amount. Except with the prior consent of Lender, in Lender’s sole
discretion, the amount of the requested Loan shall not be less than the Minimum Funding Amount.

          2.8 Crediting Payments. The receipt by Lender of any wire transfer of funds, check, or other
item of payment shall be immediately applied conditionally to reduce Obligations, but shall not be
considered a payment on account unless such wire transfer is of immediately available federal funds
and is made to the appropriate deposit account of Lender 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 Lender after 11:00 a.m. California time
shall be deemed to have been received by Lender as of the opening of business on the immediately
following Business Day.

          2.9 Term. This Agreement shall become effective upon acceptance by Lender and shall continue
in full force and effect during the Term. Notwithstanding the foregoing, Lender shall have the
right to terminate this Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default.

          3. Conditions of Loans

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

               (a) This Agreement duly executed by Borrower.

               (b) The Warrant to be issued to Lender duly executed by Borrower.

(c) An officer’s certificate of Borrower with copies of the following documents
attached: (i) the certificate of incorporation and
by-laws of Borrower certified by
Borrower as being in full force and effect on the Funding Date,
(ii) incumbency and
representative signatures, and (iii) resolutions authorizing the execution and delivery
of this Agreement and each of the other Loan Documents.

               (d) A good standing certificate from Borrower’s state of incorporation
and the state in
which Borrower’s principal place of business is located, together with certificates of
the applicable governmental authorities stating that Borrower is in compliance with the
franchise tax laws of each such state, each dated as of a recent date.

               (e) The
insurance coverage required by Section 6.9 of this Agreement.

               (f) All necessary consents of shareholders and other third parties with respect to the
execution, delivery and performance of this Agreement, the Warrant and the other Loan Documents.

               (g) Payment of any unreimbursed Lender’s Expenses.

               (h) Such other documents, and completion of such other matters, as Lender
may deem necessary or appropriate.

          3.2 Conditions Precedent to all Loans. The obligation of Lender to make each Loan,
including the initial Loan, is further subject to the following conditions:

               (a) No Default or Event of Default shall have occurred and be continuing.

               (b) Borrower
shall have provided to Lender with respect to the Collateral, copies
of vendor
invoices, bills of sale, receipts, agreements, proof of payment, and other documents as Lender
shall reasonably
request to evidence the ownership by Borrower of, the payment in full of the purchase
price of, and the fair market value of, such Collateral, each in form and substance
reasonably satisfactory to Lender.

               (c) Borrower and Lender shall have executed a Loan Agreement Supplement with respect to the
proposed Loan.

               (d) Borrower shall use its best efforts to obtain a Landlord Consent from the owner of any
building in which Collateral is to be located.

               (e) Lender shall have received such documents, instruments and agreements,
including
UCC financing statements or amendments to UCC financing statements, as Lender shall reasonably
request to evidence the perfection and priority of the security interests granted to Lender
pursuant to Section 4.

               (f) Borrower shall have delivered to Lender a subordination agreement, release,
or
estoppel letter, as appropriate, from any Person having an existing Lien superior to the Lien of
Lender on any item of Collateral.

               (g) Such other documents, and completion of such other matters, as Lender may deem necessary
or appropriate.

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          3.3 Covenant to Deliver. Borrower agrees (not as a condition but as a covenant) to deliver to
Lender each item required to be delivered to Lender as a condition to the Loan, if such Loan is
advanced. Borrower expressly agrees that the extension of such Loan prior to the receipt by Lender
of any such item shall not constitute a waiver by Lender of Borrower’s obligation to deliver such
item.

     4. Creation of Security Interest

          4.1 Grant of Security Interest. Borrower grants to Lender a valid, first priority,
continuing security interest in all presently existing and hereafter acquired or arising Collateral
in order to secure prompt, full and complete payment of any and all Obligations and in order to
secure prompt, full and complete performance by Borrower of each of its covenants and duties under
each of the Loan Documents.

          4.2 Duration of Security Interest. Lender’s security interest in the Collateral shall
continue until the payment in full and the satisfaction of all Obligations, whereupon such security
interest shall terminate; provided, however, if any item of Collateral is subject to an Event of
Loss, then following the prepayment of the Loan with respect to such
item pursuant to Section 2.5,
Lender shall release its security interest in such item of Collateral. Lender shall, at Borrower’s
sole cost and expense, execute such further documents and take such further actions as may be
necessary to effect the release contemplated by this Section 4.2, including duly executing and
delivering termination statements for filing in all relevant jurisdictions under the Code.

          4.3 Possession of Collateral. So long as no Event of Default has occurred and is continuing,
Borrower shall remain in full possession, enjoyment and control of the Collateral (except only as
may be otherwise required by Lender for perfection of their security interest therein) and shall be
entitled to manage, operate and use the same and each part thereof with the rights and franchises
appertaining thereto; provided, however, that the possession, enjoyment, control and use of the
Collateral shall at all times be subject to the observance and performance of the terms of this
Agreement.

          4.4 Markings on the Collateral. At Lender’s request at any time during the Term of the Loan
(including any extension thereof), Borrower shall place in a conspicuous location on each item of
Collateral a plaque or other marking to be supplied by Lender which reads substantially as follows:

          Lighthouse Capital Partners IV, L.P. has a first priority security interest in this
item of equipment.

Such plaque or other marking shall not be removed (or if removed or damaged such plaque or other
marking shall be replaced) until the security interest in favor of Lender in such item of
Collateral is terminated pursuant to this Agreement.

          4.5 Delivery of Additional Documentation Required. Borrower shall from time to time execute
and deliver to Lender, all financing statements and other documents such Lender may reasonably
request, in form satisfactory to Lender, to perfect and continue Lender’s perfected security
interests in the Collateral and in order to consummate fully all of the transactions contemplated
under the Loan Documents.

          4.6 Right to Inspect. Lender (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,
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; provided, that such inspections shall be conducted no
more often than once every twelve (12) months unless an Event of Default has occurred and is
continuing.

9

 

     5. Representations and Warranties

          Borrower represents, warrants and covenants as follows:

          5.1 Due Organization and Qualification. Borrower is a corporation duly existing and in good
standing under the laws of its state of incorporation and qualified and licensed to do business in,
and is in good standing in, any state in which the conduct of its business or its ownership of
Property requires that it be so qualified or in which the Collateral is located, except for such
states as to which any failure so to qualify would not have a material adverse effect on Borrower.

          5.2 Authority. Borrower has all necessary power and authority to execute, deliver, and perform
in accordance with the terms thereof, the Loan Documents to which it is a party. Borrower has all
requisite power and authority to own and operate its properties and
to carry on its businesses as
now conducted.

          5.3 Subsidiaries. Borrower has no Subsidiaries, except those listed in Schedule 2
hereto.

          5.4 Conflict with Other Instruments, etc. Neither the execution and delivery of any Loan
Document to which Borrower is a party nor the consummation of the transactions therein contemplated
nor compliance with the terms, conditions and provisions thereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the certificate of incorporation and the
by-laws, or other organizational documents of Borrower or in any material respect with any law or
any regulation, order, writ, injunction or decree of any court or governmental instrumentality or
any material agreement or instrument to which Borrower is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject, or constitute a default
thereunder or result in the creation or imposition of any Lien, other than Permitted Liens.

          5.5 Authorization; Enforceability. The execution and delivery of this Agreement, the granting
of the security interest in the Collateral, the incurring of the Loans, the execution and delivery
of the other Loan Documents to which Borrower is a party and the consummation of the transactions
herein and therein contemplated have each been duly authorized by all necessary action on the part
of Borrower. The Loan Documents have been duly executed and delivered and constitute legal, valid
and binding obligations of Borrower, enforceable in accordance with their respective terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of
general application relating to or affecting the enforcement of creditors’ rights or by general
principles of equity.

          5.6 No Prior Encumbrances. Borrower has good and marketable title to the Collateral, free and
clear of liens, claims, security interests, or encumbrances, except for the first priority lien
held by the Lender and except for other Permitted Liens. Borrower has not acquired any part of
the Collateral from an assignor outside the ordinary course of such assignor’s business.

          5.7
Name; Location of Chief Executive Office, Principal Place of Business and
Collateral.
Borrower has not done business under any name other than that specified on the signature page
hereof. The chief executive office, principal place of business, and the place where Borrower
maintains its records concerning the Collateral are presently located at the address set forth in
Section 11. The Collateral is presently located at the addresses set forth set forth in Section 11
or as listed on each Loan Agreement Supplement and such other locations of which Borrower has
given Lender prior written notice in accordance with Section 7.1.

          5.8 Litigation. There are no actions or proceedings pending by or against Borrower before any
court or administrative agency in which an adverse decision could have a material adverse effect on
Borrower or the aggregate value of the Collateral. Borrower does not have knowledge of any such
pending or threatened actions or proceedings. Borrower will promptly notify Lender in writing if
any action, proceeding or governmental investigation involving Borrower is commenced that may
result in damages or costs to Borrower of Fifty Thousand Dollars ($50,000) or more.

10

 

          5.9 Financial Statements. All financial statements relating to Borrower or any Affiliate
that have been or may hereafter be delivered by Borrower to Lender present fairly in all material
respects Borrower’s financial condition as of the date thereof and Borrower’s results of operations
for the period then ended.

          5.10 Solvency. Borrower is solvent and able to pay its debts (including trade debts) as they
mature.

          5.11 Taxes. Borrower has filed or caused to be filed all tax returns required to be filed, and
has paid, or has made adequate provision for the payment of, all taxes that are due and payable,
except for such taxes that are being contested in good faith by appropriate proceedings and for
which adequate reserves have been created in accordance with generally accepted accounting
principles..

          5.12 Consents and Approvals. No approval, authorization or consent of any trustee or holder of
any indebtedness or obligation of Borrower or of any other Person under any such material
agreement, contract, lease or license or similar document or instrument to which Borrower is a
party or by which Borrower is bound, is required to be obtained by Borrower in order to make or
consummate the transactions contemplated under the Loan Documents. All consents and approvals of,
filings and registrations with, and other actions in respect of, all Governmental Authorities
required to be obtained by Borrower in order to make or consummate the transactions contemplated
under the Loan Documents have been, or prior to the time when required will have been, obtained,
given, filed or taken and are or will be in full force and effect.

          5.13 Trademarks, Patents, Copyrights, Franchises and Licenses. Borrower possesses and owns
all necessary trademarks, trade names, copyrights, patents, patent rights, franchises and licenses
which are material to the conduct of its business as now operated.

          5.14 Material Contracts. There are no material defaults under any material contract or
agreement by Borrower. Upon request, Borrower will deliver to Lender true and correct copies of all
such contracts or agreements (or, with respect to oral contracts or agreements, written
descriptions of the material terms thereof).

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

     6. Affirmative Covenants

          Borrower covenants and agrees that, until the full and complete payment of the
Obligations and the termination of the Commitments, Borrower shall do all of the following:

          6.1 Good Standing. Borrower shall maintain its corporate existence and its good standing in
its jurisdiction of incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a material adverse effect on the financial condition, operations
or business of Borrower. Borrower shall maintain in force all licenses, approvals and agreements,
the loss of which could have a material adverse effect on its financial condition, operations or
business.

          6.2
Government Compliance. Borrower shall comply with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance with which could materially
adversely affect the financial condition, operations or business of Borrower.

          6.3 Financial Statements, Reports, Certificates. Borrower shall deliver to Lender: (a) as
soon as available, but in any event within forty-five (45) days after the end of each month, a
company prepared balance sheet, income statement and cash flow statement covering Borrower’s
operations during such period, certified by a Responsible Officer; (b) commencing with the 2003
fiscal year, as soon as available, but in any event within two hundred ten (210) days after the end
of Borrower’s fiscal year, audited financial statements of Borrower prepared in

11

 

accordance with generally accepted accounting principles, consistently applied, together with an
unqualified opinion on such financial statements of a nationally recognized or other independent
public accounting firm reasonably acceptable to Lender; (c) promptly upon becoming
available, copies of all statements, reports and notices sent or made available generally
by Borrower to its security holders; (d) promptly upon receipt of notice thereof, a report of any
material legal actions pending or threatened against Borrower; and (e) such other financial
information as Lender may reasonably request from time to time.

          6.4 Certificates of Compliance. Each time financial statements are furnished pursuant to
Section 6.3 above, there shall be delivered to Lender a certificate signed by a Responsible Officer
(each an “Officer’s Certificate”) with respect to such financial reports to the effect that: (i) no
Event of Default or Default has occurred and is continuing hereunder since the date of this
Agreement or, if later, since the date of the prior Officer’s Certificate or, if such an event or
condition has occurred and is continuing, the nature and extent thereof and the action Borrower
proposes to take with respect thereto, and (ii) Borrower is in compliance in all material respects
with the provisions of Sections 6 and 7.

          6.5 Notice of Event of Loss. As soon as possible, and in any event within ten (10) days
thereafter, Borrower shall notify Lender in writing in reasonable detail of any Event of Loss.

          6.6 Notice of Defaults. As soon as possible, and in any event within five (5) days after the
discovery of a Default or an Event of Default provide Lender with an Officer’s Certificate of
Borrower setting forth the facts relating to or giving rise to such Default or Event of Default and
the action which Borrower proposes to take with respect thereto.

          6.7 Taxes. Borrower shall make due and timely payment or deposit of all federal, state, and
local taxes, assessments, or contributions required of it by law or imposed upon any properties
belonging to it, and will execute and deliver to Lender, on demand, appropriate certificates
attesting to the payment or deposit thereof; and Borrower will make timely payment or deposit of
all tax payments and withholding taxes required of it by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and
will, upon request, furnish Lender with proof satisfactory to Lender indicating that Borrower has
made such payments or deposits; provided that Borrower need not make any payment if the amount or
validity of such payment is contested in good faith by appropriate proceedings and is adequately
reserved against by Borrower.

          6.8 Use; Maintenance.

               (a) Borrower, at its expense, shall make all necessary site preparations
and cause the
Collateral to be operated in accordance with any applicable manufacturer’s manuals or instructions.
So long as no Default or Event of Default has occurred and is continuing, Borrower shall have the
right to quietly possess and use the Collateral as provided herein without interference by Lender
(except as necessary to protect Lender’s security interest in the Collateral).

               (b) Borrower, at its expense, shall maintain the Collateral in good
condition,
reasonable wear and tear excepted, and will comply in all material respects with all laws, rules
and regulations to which the use and operation of the Collateral may be or become subject. Such
obligation shall extend to repair and replacement of any partial loss or damage to the Collateral,
regardless of the cause. If maintenance is mandated by manufacturer, Borrower shall obtain and
keep in effect, at all times during the Term maintenance service contracts with suppliers approved
by Lender, such approval not to be unreasonably withheld. All parts furnished in connection with
such maintenance or repair shall immediately become part of the Collateral, All such maintenance,
repair and replacement services shall be immediately paid for and discharged by Borrower with the
result that no Lien will attach to the Collateral.

          6.9 Insurance.

               (a) Borrower, at its own expense, shall obtain and maintain in amounts and
coverages satisfactory to Lender (a) insurance against loss or damage to the Collateral, (b)
commercial general

12

 

liability insurance, including contractual liability, products liability and completed operations
coverage according to standard industry practices, and (c) such other insurance against such other
risks of loss and with such terms as shall be reasonably satisfactory to or reasonably required by
Lender as to carriers, amounts and otherwise. The amount of insurance covering loss or damage to
the Collateral shall be the greater than or equal to the Stipulated Loan Value (as defined in
Section 1.1) of all Collateral outstanding under the Loan Documents.

               (b) The amount of commercial general public liability insurance (other than products
liability coverage and completed operations insurance) shall be at least $2,000,000 per
occurrence. The amount of such products liability and completed
operations insurance) shall be at
least $2,000,000 per occurrence. The deductible with respect to insurance against loss or damage
to the Collateral and product liability insurance shall not exceed $25,000; otherwise there shall
be no deductible with respect to any insurance required to be maintained hereunder without the
prior written approval of Lender. Each such insurance policy shall: (i) name Lender loss payee or
additional insured, as appropriate, (ii) provide for insurer’s waiver of its right of subrogation
against Lender and Borrower, (iii) provide that such insurance shall not be invalidated by any
action of, or breach of warranty by, Borrower and waive set-off, counterclaim or offset against
Lender, (iv) provide that Borrower’s insurance shall be primary without a right of contribution of
Lender’s insurance, if any, or any obligation on the part of Lender to pay premiums of Borrower,
and (v) require the insurer to give Lender at least thirty (30) days prior written notice of
cancellation. Borrower shall, on or prior to the first disbursement of funds hereunder and prior
to each policy renewal, furnish to Lender certificates of insurance. Borrower shall give Lender
prompt notice of any damage to, or loss of, any Collateral.

          6.10 Loss; Damage; Destruction and Seizure.

               (a) Borrower shall bear the risk of the Collateral being lost, stolen,
destroyed, damaged
beyond repair, rendered permanently unfit for use, or seized by a governmental authority for any
reason whatsoever at any time until the expiration or termination of the Term.

               (b) If during the Term any item of Collateral becomes obsolete or is lost,
stolen,
destroyed, damaged beyond repair, rendered permanently unfit for use, or seized by a governmental
authority for any reason whatsoever for a period equal to at least the remainder of the Term (an
“Event of Loss”), then in each case Lender shall receive from the proceeds of insurance maintained
pursuant to Section 6.9, from any award paid by the seizing governmental authority or, to the
extent not received from the proceeds of insurance or award or both, from Borrower, on or before
the Payment Date next succeeding such Event of Loss, an amount equal to the sum of: (i) all accrued
and unpaid Scheduled Payments with respect to such Loan due prior to the next such Payment Date,
(ii) a prepayment in an amount equal to the Stipulated Loan Value with respect to such Loan
multiplied by the Prepayment Amount of each affected item of Collateral and (iii) all other sums,
if any, that shall have become due and payable hereunder with respect to such Loan, including
interest at the Default Rate with respect to any past due amounts. On the date of receipt by
Lender of the amount specified above with respect to each such item of Collateral subject to an
Event of Loss, this Agreement shall terminate as to such Collateral. Except as provided in
Section 6.10(c), any proceeds of insurance maintained by Borrower pursuant to Section 6.9 and
received by Borrower shall be paid to Lender promptly upon their receipt by Borrower. If any
proceeds of insurance or awards received from governmental authorities are in excess of the amount
owed under this Section 6.10, Lender shall promptly remit to Borrower the amount in excess of the
amount owed to Lender.

               (c) So long as no Event of Default has occurred and is continuing, any proceeds of
insurance maintained pursuant to Section 6.9 received by Lender or Borrower with respect to an
item of Collateral, the repair of which is practicable, shall, at the election of Borrower, be
applied either to the repair or replacement of such Collateral or, upon Lender’s receipt of
evidence of the repair or replacement of the Collateral reasonably satisfactory to Lender, to the
reimbursement of Borrower for the cost of such repair or replacement. All replacement parts and
equipment acquired by Borrower in replacement of Collateral pursuant to this Section 6.10(c)
shall immediately become part of the Collateral upon acquisition by Borrower. Borrower shall take
such actions and provide such documentation as may be reasonably requested by Lender to protect
and preserve their first priority security interest and otherwise to avoid any impairment of
Lender’s rights under the Loan Documents in connection with such repair or replacement.

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          6.11 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 Lender to
effect the purposes of this Agreement.

          6.12 Equity Participation Right. Borrower hereby grants Lender, to be exercised at Lender’s
sole discretion, an option to purchase up to $175,000 of preferred stock in Borrower’s next round
of equity financing under the same terms and conditions as all other investors in such financing.

     7. Negative Covenants

          Borrower
covenants and agrees that until the full and complete payment of the Obligations
and termination of the Commitments, Borrower will not do any of the following:

          7.1 Chief Executive Office; Location of Collateral. During the continuance of this
Agreement, change the state of incorporation, chief executive office or principal place of business
or remove or cause to be removed, except in the ordinary course of Borrower’s business, the
Collateral or the records concerning the Collateral from the premises listed on the cover page
without thirty (30) days prior written notice to Lender.

          7.2 Extraordinary Transactions and Disposal of Assets. Enter into any transaction not in the
ordinary and usual course of Borrower’s business, including the sale, lease, license or other
disposition of, moving, relocation, or transfer, whether by sale or otherwise, of Borrower’s
assets, other than (i) sales of inventory in the ordinary and usual course of Borrower’s business
as presently conducted and (ii) sales or other dispositions in the ordinary course of business of
assets, other than Collateral, that have become worn out or obsolete or that are promptly being
replaced (iii) transfer of assets, other than Collateral, among Borrower and its Subsidiaries, and
(iv) other dispositions of assets, other than Collateral, not exceeding One Hundred Thousand
Dollars ($250,000) in the aggregate in any fiscal year.

Notwithstanding anything contained in this Section 7.2, the Borrower may do any of the following:
(i) transfer non-exclusive licenses and similar arrangements for use of its intellectual
property, in arm’s length transactions, in the ordinary course of its business for adequate
consideration (ii) declare and make any dividend payment payable in its equity securities, (iii)
convert any of its convertible securities into other securities pursuant to the terms of such
convertible securities or otherwise in exchange therefor, (iv) repurchase stock from former
employees of Borrower in accordance with the terms of repurchase, vesting or similar agreements
between Borrower and such employees in its ordinary course of business, (v) repurchase equity
securities with the proceeds from the issuance of equity securities, (vi) repurchase, redeem,
retire, defease or otherwise acquire for value equity securities in connection with or pursuant to
any employees benefit plan or stock option plan of the Borrower, and (vii) provided no Event of
Default has occurred and is continuing or is not caused thereby, mergers, consolidations or
acquisitions, which after giving effect thereto, Borrower is the surviving entity.

          7.3 Restructure. Change Borrower’s name; make any material change in Borrower’s financial
structure or business operations in any manner which would have a material adverse effect on
Borrower or on the prospect of repayment of the Obligations; or cause, permit, or suffer any
material change in Borrower’s ownership (other than through a public offering or the sale of
preferred stock to equity investors); or suspend operation of Borrower’s business.

          7.4 Liens. Create, incur, assume or suffer to exist any Lien or any other encumbrance of any
kind with respect to any of the Collateral, whether now owned or hereafter acquired, except for
Permitted Liens.

     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 within three (3) days of the date when
due and payable or when declared due and payable in accordance with the Loan Documents, any
portion of the Obligations.

14

 

          8.2 Certain Covenant Defaults. If Borrower fails to perform any obligation under
Sections 6.9, 6.10 or 6.11, or violates any of the covenants contained in Section 7 of this
Agreement.

          8.3 Other Covenant Defaults. If Borrower fails or neglects to perform, keep, or observe any
other material term, provision, condition, covenant, or agreement contained in this Agreement, in
any of the other Loan Documents, or in any other present or future agreement between Borrower and
Lender and as to any default under such other term, provision, condition, covenant or agreement
that can be cured, has failed to cure such default within thirty (30) days after the occurrence of
such default.

          8.4 Material Adverse Change. If there occurs a material adverse change in Borrower’s
business, or if there is a material impairment of the prospect of repayment of any portion of the
Obligations owing to Lender or a material impairment of the value or priority of Lender’s security
interests in the Collateral.

          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 thirty (30) 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 thirty (30) 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
contesting by Borrower.

          8.6 Other Agreements. If there is a default in any agreement to which Borrower is a party with
a third party or parties resulting in a right by such third party or parties (which has not been
waived or cured within any applicable grace period), whether or not exercised, to accelerate the
maturity of any Indebtedness of at least One Hundred Thousand Dollars
($100,000).

          8.7 Judgments. If a judgment or judgments for the payment of money in an amount,
individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) shall be
rendered against Borrower and shall remain unsatisfied or unstayed for a period of thirty (30)
days.

          8.8 Redemption or Repurchase. Borrower shall, after the date of this Agreement, redeem or
repurchase (a) any shares of any class or series of its preferred stock or (b) more than Fifty
Thousand Dollars ($50,000) in the aggregate of common stock, in each case whether pursuant to a
mandatory redemption or otherwise, other than redemption or repurchases as may be expressly
permitted under this Agreement.

          8.9 Misrepresentations. If any representation or warranty made by Borrower herein or by
Borrower (or any of its officers or directors) in connection with this Agreement shall prove to
have been incorrect in any material respect when made.

          8.10 Breach of Warrant. If Borrower shall breach the terms of the Warrant in any material
respect.

          8.11 Enforceability. If any Loan Document shall in any material respect cease to be, or
Borrower shall assert that any Loan Document is not, a legal, valid and binding obligation of
Borrower enforceable in accordance with its terms.

          8.12 Involuntary Bankruptcy or Insolvency. If a proceeding shall have been instituted in a
court having jurisdiction in the premises seeking a decree or order for relief in respect of
Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian,
trustee (or similar official) of Borrower or for any substantial part of its

15

 

property, or for the winding-up or liquidation of its affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of sixty (60) consecutive days or such court
shall enter a decree or order granting the relief sought in such proceeding.

          8.13 Voluntary Bankruptcy or Insolvency. If Borrower shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any such law, or shall
consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee,
custodian (or other similar official) of Borrower or for any substantial part of its property, or
shall make a general assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action in furtherance of any of the
foregoing.

     9. Lender’s Rights and Remedies

          9.1 Rights and Remedies. Upon the occurrence and during the continuance of any Default or
Event of Default, Lender shall have no further obligation to advance money or extend credit to or
for the benefit of Borrower. In addition, upon the occurrence and during the continuance of an
Event Of Default, Lender shall have the rights, options, duties and remedies of a secured party as
permitted by law and, in addition to and without limitation of the foregoing, Lender may, at their
election, without notice of 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, including the Stipulated Loan Value of the Loan Amount of each Loan,
immediately due and payable (provided that upon the occurrence of an Event of Default described in
Section 8.12 or 8.13 all Obligations shall become immediately due and payable without any action by
Lender);

               (b) Without notice to or demand upon Borrower, make such payments and do such
acts as Lender consider necessary or reasonable to protect their security interest in the
Collateral. Borrower agrees to assemble the Collateral if Lender so requires, and to make the
Collateral available to Lender as Lender may designate. Borrower authorizes Lender 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
Lender’s determination appears to be prior or superior to their security interest and to pay all
expenses incurred in connection therewith. With respect to any of Borrower’s owned premises,
Borrower hereby grants Lender a license to enter into possession of such premises and to occupy the
same, without charge, for up to one hundred twenty (120) days in order to exercise any of Lender’s
rights or remedies provided herein, at law, in equity, or otherwise;

               (c) Without notice to Borrower, set off and apply to the Obligations any and all indebtedness
at any time owing to or for the credit or the account of Borrower;

               (d) Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for
sale, and sell (in the manner provided for herein) the Collateral. Lender 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 Lender’s exercise of their rights under this Section 9.1,
Borrower’s rights under all licenses and all franchise agreements shall inure to Lender’s benefit;

               (e) 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 Lender determines are commercially reasonable;

               (f) Lender may credit bid and purchase at any public sale; and

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

16

 

          9.3 Effect of Sale. Any sale, whether under any power of sale hereby given
or by virtue of judicial proceedings, shall operate to divest all right, title, interest, claim and
demand whatsoever, either at law or in equity, of Borrower in and to the Property sold, and shall
be a perpetual bar, both at law and in equity, against Borrower, its successors and assigns, and
against any and all Persons claiming the Property sold or any part thereof under, by or through
Borrower, its successors or assigns.

          9.4 Power of Attorney in Respect of the Collateral. Borrower does hereby irrevocably appoint
Lender (which appointment is coupled with an interest) on the occurrence and continuance of a
Default or an Event of Default, the true and lawful attorney in fact of Borrower with full power of
substitution, for it and in its name: (a) to ask, demand, collect, receive, receipt for, sue for,
compound and give acquittance for any and all rents, issues, profits, avails, distributions,
income, payment draws and other sums in which a security interest is granted under Section 4 with
full power to settle, adjust or compromise any claim thereunder as fully as if Lender were
Borrowers themselves, (b) to receive payment of and to endorse the name of Borrower to any items of
Collateral (including checks, drafts and other orders for the payment of money) that come into such
Lender’s possession or under such Lender’s control, (c) to make all demands, consents and waivers,
or take any other action with respect to, the Collateral, (d) in Lender’s discretion to file any
claim or take any other action or proceedings, either in its own name or in the name of Borrower or
otherwise, which Lender may reasonably deem necessary or appropriate to protect and preserve the
right, title and interest of Lender in and to the Collateral, or (e) to otherwise act with respect
thereto as though Lender were the outright owner of the Collateral.

          9.5 Lender’s 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
Lender may do any or all of the following: (a) make payment of the same or any part thereof; (b)
set up such reserves in Borrower’s loan account as Lender deems necessary to protect Lender from
the exposure created by such failure; or (c) obtain and maintain insurance policies of the type
discussed in Section 6.9 of this Agreement, and take any action with respect to such policies as
Lender deem prudent. Any amounts paid or deposited by Lender shall constitute Lender’s 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 Lender shall not
constitute an agreement by Lender to make similar payments in the future or a waiver by Lender of
any Event of Default under this Agreement.

          9.6 Remedies Cumulative. Lender’s rights and remedies under this Agreement, the Loan
Documents, and all other agreements shall be cumulative. Lender shall have all other rights and
remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by
Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Event of
Default on Borrower’s part shall be deemed a continuing waiver. No delay by Lender shall constitute
a waiver, election, or acquiescence by it.

          9.7 Application of Collateral Proceeds. The proceeds and/or avails of the Collateral, or any
part thereof, and the proceeds and the avails of any remedy hereunder (as well as any other amounts
of any kind held by Lender at the time of or received by Lender after, the occurrence of an Event
of Default hereunder) shall be paid to and applied as follows:

               (a) First, to the payment of out-of-pocket costs and expenses, including all
amounts
expended to preserve the value of the Collateral, of foreclosure or suit, if any, and of such sale
and the exercise of any other rights or remedies, and of all proper fees, expenses, liability and
advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by
Lender;

               (b) Second, to the payment to Lender of the amount then owing or unpaid on
the Loans
for Scheduled Payments, the Stipulated Loan Value of the Loan Amount, and all other Obligations
with respect to all Loans, and in case such proceeds shall be insufficient to pay in full the whole
amount so due, owing or unpaid upon the Loans, then to the unpaid interest thereon, then to unpaid
principal thereof, then to the Stipulated Loan Value of the Loan Amount with respect to the Loan,
and then to the payment of other amounts then payable to Lender under any of the Loan Documents;
and

17

 

               (c) Third, to the payment of the surplus, if any, to Borrower, its successors and
assigns, or to whomsoever may be lawfully entitled to receive the same.

          9.8 Reinstatement of Rights. If Lender shall have proceeded to enforce any right under this
Agreement or any other Loan Document by foreclosure, sale, entry or otherwise, and such proceedings
shall have been discontinued or abandoned for any reason or shall have been determined adversely,
then and in every such case (unless otherwise ordered by a court of competent jurisdiction), Lender
shall be restored to their former position and rights hereunder with respect to the Property
subject to the security interest created under this Agreement.

     10. Waivers; Indemnification

          10.1 Demand; Protest. Borrower waives demand, protest, notice of protest, notice of
default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by Lender on which Borrower may in any
way be liable.

          10.2 Lender’s Liability for Collateral. So long as Lender complies with its obligations, if
any, under Section 9207 of the Code, Lender shall not in any way or manner be liable or responsible
for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in
any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other Person whomsoever. All
risk of loss, damage or destruction of the Collateral shall be borne by Borrower.

          10.3 Indemnification. Whether or not the transactions contemplated hereby shall be
consummated:

               (a) General Indemnity. Borrower shall pay, indemnify, and hold Lender and
each of
its officers, directors, employees, counsel, partners, agents and attorneys-in-fact (each, an
“Indemnified Person”) harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges, expenses or disbursements (including
Lender’s Expenses and reasonable attorney’s fees and the allocated cost of in-house counsel) of any
kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement and any other Loan Documents, or the transactions contemplated
hereby and thereby, and with respect to any investigation, litigation or proceeding (including any
case, action or proceeding before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, dissolution or relief of debtors or any appellate
proceeding) related to this Agreement or the Loans or the use of the proceeds thereof, whether or
not any Indemnified Person is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”); provided, that Borrower shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnified Person. An Indemnified Person may not enter into any settlement or
other compromise with respect to any Indemnified Liabilities without Borrower’s prior written
consent, which shall not be unreasonably withheld, conditioned or delayed, and if a claim is
settled or compromised without such consent, Borrower shall not be obligated to provide
indemnification under this section. If any Indemnified Person obtains recovery of any of the
amounts that Borrower has paid to it pursuant to the indemnity set forth in this section, then such
Indemnified Person shall promptly pay the Borrower the amount of such recovery.

               (b) Survival; Defense. The obligations in this Section 10.3 shall survive
payment of
all other Obligations. At the election of any Indemnified Person, Borrower shall defend such
Indemnified Person using legal counsel satisfactory to such Indemnified Person in such Person’s
sole discretion, at the sole cost and expense of Borrower. All amounts owing under this Section
10.3 shall be paid within thirty (30) days after written demand.

     11. 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

18

 

delivered or sent by certified mail, postage prepaid, return receipt requested, or by prepaid
facsimile to Borrower or to Lender, as the case may be, at their respective addresses set forth
below:

	 	 	 	 	 
	 

	 	If to Borrower:
	 	Aruba Wireless Networks, Inc.
	 

	 	 	 	180 Great Oaks Blvd., Suite B
	 

	 	 	 	San Jose, California 95119
	 

	 	 	 	Attention: Chief Financial Officer
	 

	 	 	 	FAX: (408) 227-4550
	 
	 	 	 	 
	 

	 	If to Lender:
	 	Lighthouse Capital Partners IV, L.P.
	 

	 	 	 	500 Drake’s Landing Road
	 

	 	 	 	Greenbrae, California 94904-3011
	 

	 	 	 	Attention: Contract Administrator
	 

	 	 	 	FAX: (415) 925-3387

     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.

12. General Provisions

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

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

          12.3 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.

          12.4 Entire Agreement; Construction; Amendments and Waivers.

               (a) This Agreement and each of the other Loan Documents dated as of the date
hereof,
taken together, constitute and contain the entire agreement between Borrower and Lender and
supersede any and all prior agreements, negotiations, correspondence, understandings and
communications between the parties, whether written or oral, respecting the subject matter hereof.

               (b) This Agreement is the result of negotiations between and has been
reviewed by
each of Borrower and Lender executing this Agreement as of the date hereof and their respective
counsel; accordingly, this Agreement shall be deemed to be the product of the parties hereto, and
no ambiguity shall be construed in favor of or against Borrower or Lender, Borrower and Lender
agree that they intend the literal words of this Agreement and the other Loan Documents and that no
parol evidence shall be necessary or appropriate to establish Borrower’s or Lender’s actual
intentions.

               (c) Any and all amendments, modifications, discharges or waivers of, or
consents to
any departures from any provision of this Agreement or of any of the other Loan Documents shall not
be effective without the written consent of Lender. Any waiver or consent with respect to any
provision of the Loan Documents shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on Borrower in any case shall
entitle Borrower to any other or further notice or demand in similar or other circumstances. Any
amendment, modification, waiver or consent effected in accordance with this Section 12.4 shall be
binding upon Lender and on Borrower.

19

 

          12.5 Reliance by Lender. All covenants, agreements, representations and warranties made
herein by Borrower shall, notwithstanding any investigation by Lender, be deemed to be material to
and to have been relied upon by Lender.

          12.6 No Set-Offs by Borrower. All sums payable by Borrower pursuant to this Agreement or any
of the other Loan Documents shall be payable without notice or demand and shall be payable in
United States Dollars without set-off or reduction of any manner whatsoever.

          12.7 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall constitute but one and the
same Agreement.

          12.8
Survival. All covenants, representations and warranties made in this Agreement shall
continue in full force and effect so long as any Obligations remain outstanding. The obligations
of Borrower to indemnify Lender with respect to the expenses, damages, losses, costs and
liabilities described in Section 10.3 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Lender have run.

     13. No Original Issue Discount. Borrower and Lender hereby acknowledge and agree that the
warrant (the “Warrant”) to purchase stock transferred to Lender under the Warrant to purchase stock
is part of an investment unit within the meaning of Section 1273(c)(2) of the Internal Revenue Code
which includes the Loans. Borrower and Lender further agree as between Borrower and Lender, that
the fair market value of the Warrant is equal to US$100.00 and that, pursuant to Treas. Reg. §
1.1273-2(h), US$100.00 of the issue price of the investment unit will be allocable to the Warrant
and the balance shall be allocable to the Loans. Borrower and Lender agree to prepare their federal
income tax returns in a manner consistent with the foregoing agreement and, pursuant to Treas. Reg.
§ 1.1273, the original issue discount on the Loans shall be considered to be zero.

     14. Relationship of Parties. Borrower and Lender acknowledge, understand and agree that the
relationship between the Borrower, on the one hand, and Lender, on the other, is, and at all times
shall remain solely that of a borrower and lender. Lender shall not under any circumstances be
construed to be a partner or joint venturer of Borrower or any of its Affiliates; nor shall the
Lender under any circumstances be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Borrower or any of its Affiliates, or to owe any fiduciary duty to
Borrower or any of its Affiliates. Lender do not undertake or assume any responsibility or duty to
Borrower or any of its Affiliates to select, review, inspect, supervise, pass judgment upon or
otherwise inform the Borrower or any of its Affiliates of any matter in connection with its or
their Property, any Collateral held by Lender or the operations of Borrower or any of its
Affiliates. Borrower and each of its Affiliates shall rely entirely on their own judgment with
respect to such matters, and any review, inspection, supervision, exercise of judgment or supply of
information undertaken or assumed by Lender in connection with such matters is solely for the
protection of Lender and neither Borrower nor any Affiliate is entitled to rely thereon.

     15. 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 LENDER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SANTA CLARA, STATE
OF CALIFORNIA. BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF
THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.

     16. Confidentiality. Lender agrees to hold in confidence any confidential information it
receives from Borrower pursuant hereto, except for disclosure: (a) to legal counsel and
accountants for Lender or any

20

 

assignee; (b) to other professional advisors to Lender or any assignee; (c) to regulatory
officials having jurisdiction over Lender or any assignee; (d) as required by law or legal process
or in connection with any legal proceeding to which Lender (or any assignee) and Borrower are
adverse parties; and (e) in connection with a disposition or proposed disposition in any or all of
Lender’s rights and benefits hereunder. For purposes of this section, “confidential information”
shall mean any information respecting Borrower or provided by Borrower other than: (i) information
which is or becomes generally available to the public other than as a result of a disclosure by
Lender or any assignee in violation of this section; (ii) information which becomes available to
Lender or any assignee from any other source (other than Borrower) which is not known by Lender or
such assignee to be bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligations of confidentiality of Borrower with respect to the information made
available; and (iii) information known by Lender or any assignee on a non-confidential basis prior
to its disclosure to Lender of the assignee by Borrower.

THIS SPACE IS INTENTIONALLY LEFT BLANK

21

 

     In Witness Whereof, the parties hereto have caused this Agreement to be executed as
of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	BORROWER:	 	 	 	LENDER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARUBA WIRELESS NETWORKS, INC.	 	 	 	LIGHTHOUSE CAPITAL
PARTNERS IV, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 By: LIGHTHOUSE MANAGEMENT	 	 
	By:

	 	/s/ Pankaj Manglik	 	 	 	       PARTNERS IV, L.L.C., its general partner	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:
	 	Pankaj Manglik	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	CEO	 	 	 	By:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

Exhibit A
—
Collateral

Exhibit B — Warrant

Exhibit C — Landlord Consent

Exhibit D — Loan Agreement Supplement

Exhibit E — Ancillary Documents

Schedule 1 — Existing Liens

Schedule 2 — Subsidiaries

22

 

Exhibit A

	 	 	 
	DEBTOR/BORROWER:

	 	Aruba Wireless Networks, Inc.
	 
	 	 
	SECURED PARTY/LENDER:

	 	Lighthouse Capital Partners IV, L.P.

COLLATERAL

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

     All right, title, interest, claims and demands of Debtor in and to each and every item of
equipment, fixtures or personal property that is financed pursuant to Loan and Security Agreement
No. 352040201 by and between Debtor and Secured Party, including without limitation, the equipment,
fixtures and personal property described in Annex A attached hereto whether now owned or hereafter
acquired, wherever located, together with all substitutions, renewals or replacements of and
additions, improvements, accessions and accumulations to any and all of such equipment, fixtures or
personal property together with all the rents, issues, income, profits and avails therefrom and all
of the products and proceeds thereof, including without limitation, insurance, proceeds of
insurance, proceeds of proceeds, condemnation, requisition or similar payments, and all proceeds
from sales, renewals, releases or other dispositions thereof.

1

 

Annex
A

to

Exhibit A

The following represent further specific descriptions of the Financed Equipment:

Financed Equipment

2

 

Exhibit B

Warrant

1

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