Document:

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                                                                    EXHIBIT 10.4

This LOAN AND SECURITY AGREEMENT, dated as of March 31, 1999 (this "Agreement"),
is between SILICON VALLEY BANK ("Bank") and NETRIGHT TECHNOLOGIES, INC., a
Delaware corporation ("Borrower").

The parties agree as follows:

1.      DEFINITIONS AND CONSTRUCTION

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

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

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

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

                "Borrower's Books" means all of Borrower's books and records
including, without limitation: 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
if such equipment is necessary for the review of such information.

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

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

                "Closing Date" means the date of this Agreement.

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

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

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

                "Current Assets" means, as of any applicable date, all amounts
that should, in accordance with GAAP, be included as current assets on the
consolidated balance sheet of Borrower and its Subsidiaries as at such date.

                "Current Liabilities" means, as of any applicable date, all
amounts that should, in accordance with GAAP, be included as current liabilities
on the consolidated balance sheet of Borrower and its Subsidiaries, as at such
date, plus, to the extent not already included therein, all outstanding Loans
due within twelve months from any applicable date made under this Agreement,
including all Indebtedness that is payable upon demand or within one year from
the date of determination thereof unless such Indebtedness is renewable or
extendable at the option of Borrower or any Subsidiary to a date more than one
year from the date of determination, but excluding Subordinated Debt and
deferred revenue.

                "Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.

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                "Eligible Accounts" means those Accounts that arise in the
ordinary course of Borrower's business that comply with all of Borrower's
representations and warranties to Bank set forth in Section 5.4; provided that
standards of eligibility may be revised from time to time by Bank in Bank's
reasonable judgment effective upon 10 days prior notice to Borrower (no such
revision shall be retroactive, but shall apply only to requests for advances
made after such revision). Eligible Accounts shall not include the following:

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

                (b)     Accounts with respect to an account debtor, 50% of whose
Accounts the account debtor has failed to pay within 90 days of invoice date
(or, if approved by Bank, in the exercise of its absolute discretion, within 120
days of invoice date);

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

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

                (e)     Accounts with respect to which the account debtor is a
federal, state, or local governmental entity or any department, agency, or
instrumentality thereof;

                (f)     Accounts with respect to which Borrower is liable to the
account debtor, but only to the extent of any amounts owing to the account
debtor (sometimes referred to as "contra" accounts, e.g. accounts payable,
customer deposits, credit accounts etc.);

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

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

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

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

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

                "Equipment Availability Date" has the meaning set forth in
Section 2.1.2.

                "Equipment Commitment" means a credit extension of up to
$1,000,000.00.

                "Equipment Loan" has the meaning set forth in Section 2.1.2.

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

                "Event of Default" has the meaning set forth in Section 8.

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

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

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

                "Intellectual Property Collateral" means all right, title, and
interest of Borrower in any of the following, whether now existing or hereafter
acquired or created:

                (a)     Copyrights, Trademarks, Patents, and Mask Works;

                (b)     Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products;

                (c)     Any and all design rights;

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

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

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

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

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

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

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

                "Lien" means any mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance (or any agreement to grant any of the
foregoing, whether or not contingent on the happening of any future event).

                "Loan" means a Revolving Loan or an Equipment Loan.

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

                "Mask Works" means all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired;

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

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Documents, (iii) the enforceability or binding effect of the Loan Documents, or
(iv) the attachment, perfection, or priority of Bank's security interests in the
Collateral or the value of the Collateral.

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

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

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

                "Payment Date" means the last calendar day of each month.

                "Permitted Indebtedness" means:

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

                (b)     Subordinated Debt;

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

                (d)     Indebtedness to trade creditors incurred in the ordinary
course of business;

                (e)     Indebtedness secured by Permitted Liens;

                (f)     Indebtedness conforming with the requirements set forth
in the attached Schedule of Permitted Indebtedness; and

                (g)     Extensions, refinancings, modifications, amendments and
restatements of any items of Permitted Indebtedness (c) through (f) above,
provided that the principal amount thereof is not increased or the terms thereof
are not modified to impose more burdensome terms upon Borrower or its
Subsidiary, as the case may be.

                "Permitted Investment" means:

                (a)     Direct obligations of the United States Treasury,
including bills, notes, and bonds;

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                (b)     Obligations issued or guaranteed by agencies or
instrumentalities of the United States government;

                (c)     Bank obligations, including certificates of deposit,
bank notes, and bankers acceptances. Investments in these securities are limited
to banks whose long term debt is rated "A" or higher by Moody's and Standard &
Poor's and whose short-term obligations are rated "P1" by Moody's and "A1" or
higher by Standard & Poor's;

                (d)     Corporate obligations, including intermediate-term notes
rated "A" or higher by Moody's and Standard & Poor's and commercial paper rated
"P1" or higher by Moody's and "A1" or higher by Standard & Poor's;

                (e)     Money market funds over $1,000,000,000 in assets, with
an historically constant dollar net asset value, consisting of acceptable
securities as described in clauses (a) through (d), above, as long as the fund's
manager has been in business over five years, has name recognition, and has
performance that is easily tracked; and

                (f)     United States and dollar-denominated international
corporate debt of all types, as long as the issuer meets credit rating and
marketability guidelines.

Derivative instruments are not Permitted Investments. This would cover all
investments where the value is based on an underlying variable causing the
coupon and/or the maturity value to be unknown for the life of the security. The
maximum maturity of individual securities in Borrower's portfolio may not exceed
twenty-four months. The average maturity of Borrower's portfolio may not exceed
twelve months. For securities that have put dates or reset dates, the put date
or reset date will be used, instead of the final maturity date, for maturity
guideline purposes. There is no limit to the percentage of Borrower's portfolio
which may be maintained in securities issued by the United States Treasury or by
its agencies and instrumentalities. No one issuer or group of issuers from the
same holding company is to exceed 15% of Borrower's portfolio at the time of
purchase, with the exception of Government securities. No investment will be
permitted in common stocks, preferred stocks, options (put or calls),
commodities, foreign securities, futures or mutual funds whose underlying
securities are not Permitted Investments.

                "Permitted Liens" means the following:

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

                (b)     Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and as to which adequate reserves are maintained on
Borrower's Books in accordance with GAAP, provided the same have no priority
over any of Bank's security interests;

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

                (d)     Leases or subleases and [non-exclusive] licenses or
sublicenses granted to others in the ordinary course of Borrower's business not
interfering in any material respect with the business of Borrower and its
Subsidiaries taken as a whole, and any interest or title of a lessor, licensor
or under any lease or license provided that such leases, subleases, licenses and
sublicenses do not prohibit the grant of the security interest granted
hereunder; and

                (e)     Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.8;

                (f)     Easements, reservations, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances affecting real property not constituting a Material Adverse Effect;

                (g)     Liens that are not prior to the Lien of Bank which
constitute rights of set-off of a customary nature or bankers' Liens with
respect to amounts on deposit, whether arising by operation of law or by
contract, in connection with arrangements entered into with banks in the
ordinary course of business; and

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

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

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

                "Quick Assets" means, as of any applicable date, the
consolidated unrestricted cash, cash equivalents, accounts receivable and
short-term investments with maturities of fewer than 90 days of Borrower
determined in accordance with GAAP.

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

                "Revolving Commitment" means a credit extension of up to
$5,000,000.00.

                "Revolving Loan" means a loan advance under the Revolving
Commitment.

                "Revolving Maturity Date" means the date that is the one year
anniversary of the Closing Date.

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

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

                "Subsidiary" means with respect to any Person, corporation,
partnership, company association, joint venture, or any other business entity of
which more than 50% of the voting stock or other equity interests is owned or
controlled, directly or indirectly, by such Person.

                "Tangible Net Worth" means as of any applicable date, the
consolidated total assets of Borrower and its Subsidiaries minus, without
duplication, (i) the sum of any amounts attributable to (a) goodwill, (b)
intangible items such as unamortized debt discount and expense, patents, trade
and service marks and names, copyrights and research and development expenses
except prepaid expenses, and (c) all reserves not already deducted from assets,
and (ii) Total Liabilities.

                "Total Liabilities" means as of any applicable date, any date as
of which the amount thereof shall be determined, all obligations that should, in
accordance with GAAP be classified as liabilities on the consolidated balance
sheet of Borrower, including in any event all Indebtedness, but specifically
excluding Subordinated Debt.

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

                "UCC" means the California Uniform Commercial Code.

                "Year 2000 Problem" means the inability of computers, as well as
embedded microchips in non-computing devices, to properly perform date-sensitive
functions with respect to certain dates prior to and after December 31, 1999.

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

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the notes and schedules thereto. In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding." Periods
of days referred to in this Agreement shall be counted in calendar days unless
otherwise stated. References to the plural include the singular and to the
singular include the plural, references to any gender include any other gender,
the part includes the whole, the term "including" is not limiting, and the term
"or" has, except where otherwise indicated, the inclusive meaning represented by
the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Article, section, subsection,
clause, exhibit and schedule references are to this Agreement, unless otherwise
specified. All of the exhibits and schedules attached hereto shall be deemed
incorporated herein by reference. All terms contained in this Agreement which
are not otherwise specifically defined herein (including the term "good faith")
shall have the meanings provided by the UCC to the extent the same are used or
defined therein.

        1.3.    No Presumption Against Any Party. Neither this Agreement nor any
other Loan Document nor any uncertainty or ambiguity herein or therein shall be
construed or resolved using any presumption against any party hereto or thereto,
whether under any rule of construction or otherwise. On the contrary, this
Agreement and the other Loan Documents have been reviewed by each of the parties
and their counsel and, in the case of any ambiguity or uncertainty, shall be
construed and interpreted according to the ordinary meaning of the words used so
as to fairly accomplish the purposes and intentions of all parties hereto.

2.      LOAN AND TERMS OF PAYMENT

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

                2.1.1.  (a) Subject to and upon the terms and conditions of this
Agreement, Bank agrees to make Revolving Loans to Borrower in an aggregate
outstanding amount not to exceed the Revolving Commitment or the Borrowing Base,
whichever is less. Subject to the terms and conditions of this Agreement,
amounts borrowed pursuant to this Section 2.1 may be repaid and reborrowed at
any time during the term of this Agreement.

                        (b)     Whenever Borrower desires an Revolving Loan,
Borrower will notify Bank by facsimile transmission or telephone no later than
3:00 p.m. Pacific time, on the Business Day that such Revolving Loan is to be
made. Each such notification shall be promptly confirmed by a Payment/Loan Form
in substantially the form of Exhibit B hereto. Bank is authorized to make Loans
under this Agreement, based upon instructions received from a Responsible
Officer or a designee of a Responsible Officer, or without instructions if in
Bank's discretion such Loans are necessary to meet Obligations which have become
due and remain unpaid. Bank shall be entitled to rely on any telephonic notice
given by a person who Bank reasonably believes to be a Responsible Officer or a
designee thereof, and Borrower shall indemnify and hold Bank harmless for any
damages or loss suffered by Bank as a result of such reliance. Bank will credit
the amount of Loans made under this Section 2.1 to Borrower's deposit account.

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                        (c)     Interest Rate. Except as set forth in Section
2.3(b), the outstanding principal amount of the Revolving Loans shall bear
interest, on the average daily balance thereof, at a per annum rate equal to
0.25 percentage point above the Prime Rate.

                        (d)     The Revolving Commitment shall terminate on the
Revolving Maturity Date, at which time all Revolving Loans and accrued interest
thereon shall be immediately due and payable.

                        2.1.2.  Equipment Loans.

                        (a)     Subject to and upon the terms and conditions of
this Agreement, at any time from the date hereof through February 28, 2000, (the
"Equipment Availability End Date"), but no more frequently than once during each
calendar month, Bank agrees to make advances (each an "Equipment Loan") to
Borrower in an aggregate amount not to exceed the Equipment Commitment. Borrower
shall deliver to Bank, at the time of each Equipment Loan request, an invoice
for the equipment to be financed by such Equipment Loan. The Equipment Loans
shall be used only to purchase or refinance Equipment purchased on or after 90
days prior to the date hereof (provided, that the initial advance to Borrower
under this Section 2.1.2 may be utilized to refinance Equipment purchased by
Borrower at any time on or after January 1, 1998) and shall not exceed 100% of
the invoice amount of such equipment approved from time to time by Bank,
including sales taxes, freight, and installation expenses.

                        (b)     Interest Rate. Except as set forth in Section
2.3(b), the outstanding principal amount of the Equipment Loans shall bear
interest, on the average daily balance thereof, at a per annum rate equal to
0.50 percentage points above the Prime Rate. Accrued interest on each Equipment
Loan shall be payable monthly on each Payment Date and on the date the final
instalment of principal on the Equipment Loans is due.

                        (c)     Any Equipment Loans that are outstanding on the
Equipment Availability End Date will be payable in 36 equal monthly installments
of principal, on each Payment Date, beginning on the Payment Date of following
the Equipment Availability End Date and continuing until February [___], 2003,
when all Equipment Loans shall be immediately due and payable. Equipment Loans,
once repaid, may not be reborrowed.

                        (d)     When Borrower desires to obtain an Equipment
Loan, Borrower shall notify Bank (which notice shall be irrevocable) by
facsimile transmission to be received no later than 3:00 p.m. Pacific time one
Business Day before the day on which the Equipment Loan is to be made. Such
notice shall be substantially in the form of Exhibit B. The notice shall be
signed by a Responsible Officer or its designee and include a copy of the
invoice for the Equipment to be financed.

        2.2.    Overadvances. If, at any time or for any reason, the amount of
Obligations owed by Borrower to Bank pursuant to Section 2.1.1 and 2.1.2 of this
Agreement is greater than the lesser of (i) the Revolving Commitment or (ii) the
Borrowing Base, Borrower shall immediately pay to Bank, in cash, the amount of
such excess.

        2.3.    Default Rates, Payments, and Calculations.

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

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                (b)     Payments. Interest hereunder shall be due and payable on
each Payment Date. Borrower hereby authorizes Bank to debit any accounts with
Bank, including, without limitation, Account Number _____________________ for
payments of principal and interest due on the Obligations and any other amounts
owing by Borrower to Bank. Bank will notify Borrower of all debits which Bank
has made against Borrower's accounts. Any such debits against Borrower's
accounts in no way shall be deemed a set-off. Any interest not paid when due
shall be compounded by becoming a part of the Obligations, and such interest
shall thereafter accrue interest at the rate then applicable hereunder.

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

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

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

                (a)     Facility Fee. A Facility Fee equal to $15,000.00, which
fee shall be due on the Closing Date and shall be fully earned and
non-refundable;

                (b)     Financial Examination and Appraisal Fees. Bank's
customary fees and reasonable out-of-pocket expenses for Bank's audits of
Borrower's Accounts, and for each appraisal of Collateral and financial analysis
and examination of Borrower performed from time to time by Bank or its agents;

                (c)     Bank Expenses. Upon demand from Bank, including, without
limitation, upon the date hereof, all Bank Expenses incurred through the date
hereof, including reasonable attorneys' fees and expenses, and, after the date
hereof, all Bank Expenses, including reasonable attorneys' fees and expenses, as
and when they become due.

        2.6.    Additional Costs. In case of any change in any law, regulation,
treaty or official directive or the interpretation or application thereof by any
court or any governmental authority charged with the administration thereof or
the compliance with any guideline or request of any central bank or other

                                       12
<PAGE>   13

governmental authority (whether or not having the force of law) in each case
after the date of this Agreement:

                (a)     subjects Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by Borrower or
otherwise with respect to the transactions contemplated hereby (except for taxes
on the overall net income of Bank imposed by the United States of America or any
political subdivision thereof);

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

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

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

        2.7.    Term. Except as otherwise set forth herein, this Agreement shall
become effective on the Closing Date and, subject to Section 12.7, shall
continue in full force and effect until the Loans and all interest thereon have
been fully and finally paid. Notwithstanding the foregoing, Bank shall have the
right to terminate its obligation to make Loans under this Agreement immediately
and without notice upon the occurrence and during the continuance of an Event of
Default.

3.      CONDITIONS OF LOANS

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

                (a)     this Agreement;

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

                (c)     an intellectual property security agreement;

                (d)     financing statements (Forms UCC-1) for filing in the
States of California and Illinois;

                (e)     insurance certificate;

                (f)     payment of the fees and Bank Expenses then due specified
in Section 2.5 hereof; and

                                       13
<PAGE>   14

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

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

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

                (b)     the representations and warranties contained in Section
5 shall be true and correct in all material respects on and as of the date of
such Payment/Loan Form and on the effective date of each Loan as though made at
and as of each such date (except to the extent they relate specifically to an
earlier date, in which case such representations and warranties shall continue
to have been true and accurate as of such date), and no Default shall have
occurred and be continuing, or would result from such Loan, The making of each
Loan shall be deemed to be a representation and warranty by Borrower on the date
of such Loan as to the accuracy of the facts referred to in this Section 3.2(b).

4.      CREATION OF SECURITY INTEREST

        4.1.    Grant of Security Interest. Borrower grants and pledges to Bank
a continuing security interest in all presently existing and hereafter acquired
or arising Collateral in order to secure prompt payment of any and all
Obligations and in order to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. Except as set forth in the
Schedule, such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will, subject to Permitted
Liens, constitute a valid, first priority security interest in Collateral
acquired after the date hereof. Borrower acknowledges that Bank may, following
the occurrence and during the continuance of an Event of Default, place a "hold"
on any Deposit Account pledged as Collateral to secure the Obligations.
Notwithstanding termination of this Agreement, Bank's Lien on the Collateral
shall remain in effect for so long as any Obligations are outstanding.

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

        4.3.    Right to Inspect. Bank (through any of its officers, employees,
or agents) shall have the right, upon reasonable prior notice, from time to time
during Borrower's usual business hours, to inspect Borrower's Books and to make
copies thereof and to check, test, and appraise the Collateral in order to
verify Borrower's financial condition or the amount, condition of, or any other
matter relating to, the Collateral.

5.      REPRESENTATIONS AND WARRANTIES

        Borrower represents and warrants as follows:

        5.1.    Due Organization and Qualification. Borrower and each Subsidiary
is a corporation duly existing and in good standing under the laws of its state
of incorporation and qualified and licensed to

                                       14
<PAGE>   15

do business in, and is in good standing in, any state in which the conduct of
its business or its ownership of property requires that it be so qualified.

        5.2.    Due Authorization; No Conflict. The execution, delivery, and
performance of the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Articles/Certificate of Incorporation or
Bylaws, nor will they constitute an event of default under any material
agreement to which Borrower is a party or by which Borrower is bound except to
the extent that certain intellectual property agreements prohibit the assignment
of the rights thereunder to a third party without Borrower's or other party's
consent and the Loan Documents constitute an assignment Borrower is not in
default under any agreement to which it is a party or by which it is bound,
which default would reasonably be expected to have a Material Adverse Effect.

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

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

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

        5.6.    Intellectual Property. Borrower is the sole owner of the
Intellectual Property Collateral, except for non-exclusive licenses granted by
Borrower to its customers in the ordinary course of business. Each of the
Patents is valid and enforceable, and no part of the Intellectual Property
Collateral has been judged invalid or unenforceable, in whole or in part, and no
claim has been made that any part of the Intellectual Property Collateral
violates the rights of any third party. Except for and upon the filing with the
United States Patent and Trademark Office with respect to the Patents and
Trademarks and the Register of Copyrights with respect to the Copyrights and
Mask Works necessary to perfect the security interests created hereunder, and
except as has been already made or obtained, no authorization, approval or other
action by, and no notice to or filing with, any United States governmental
authority or United States regulatory body is required either (i) for the grant
by Borrower of the security interest granted hereby or for the execution,
delivery or performance of Loan Documents by Borrower in the United States or
(ii) for the perfection in the United States or the exercise by Bank of its
rights and remedies hereunder.

        5.7.    Name; Location of Chief Executive Office. Except as disclosed in
the Schedule, Borrower has not done business and will not without at least 30
days prior written notice to Bank do business under any name other than that
specified on the signature page hereof. The chief executive office of Borrower
is located at the address indicated in Section 10 hereof.

        5.8.    Litigation. Except as set forth in the Schedule, there are no
actions or proceedings pending, or, to Borrower's knowledge, threatened by or
against Borrower or any Subsidiary before any court or administrative agency in
which an adverse decision would reasonably be expected to have a Material
Adverse Effect.

                                       15
<PAGE>   16

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

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

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

        5.12.   Environmental Condition. None of Borrower's or any Subsidiary's
properties or assets has ever been used by Borrower or any Subsidiary or, to the
best of Borrower's knowledge, by previous owners or operators, in the disposal
of, or to produce, store, handle, treat, release, or transport, any hazardous
waste or hazardous substance other than in accordance with applicable law; to
the best of Borrower's knowledge, none of Borrower's properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a hazardous waste or hazardous substance disposal site, or
a candidate for closure pursuant to any environmental protection statute; no
lien arising under any environmental protection statute has attached to any
revenues or to any real or personal property owned by Borrower or any
Subsidiary; and neither Borrower nor any Subsidiary has received a summons,
citation, notice, or directive from the Environmental Protection Agency or any
other federal, state or other governmental agency concerning any action or
omission by Borrower or any Subsidiary resulting in the release, or other
disposition of hazardous waste or hazardous substances into the environment.

        5.13.   Taxes. Borrower and each Subsidiary has filed or caused to be
filed all tax returns required to be filed on a timely basis, and has paid, or
has made adequate provision for the payment of, all taxes reflected therein,
except those being contested in good faith by proper proceedings with adequate
reserves under GAAP.

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

        5.15.   Government Consents. Borrower and each Subsidiary has obtained
all consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower's business as

                                       16
<PAGE>   17

currently conducted except where the failure to obtain such consent, approval or
authorization, to make any such declaration or filing or to give any such notice
would not reasonably be expected to have a Material Adverse Effect.

        5.16.   Year 2000 Compliance. Borrower has conducted a comprehensive
review and assessment of Borrower's systems and equipment applications and made
inquiry of Borrower's key suppliers, vendors and customers with respect to the
Year 2000 Problem. Based on that review and inquiry, Borrower does not believe
the Year 2000 Problem, including costs of remediation, will have a Material
Adverse Effect. Borrower has developed adequate contingency plans to ensure
uninterrupted and unimpaired business operation in the event of a failure of its
own or a third party's systems or equipment due to the Year 2000 Problem,
including those of vendors, customers, and suppliers, as well as a general
failure of or interruption in its communications and delivery infrastructure.

        5.17.   Full Disclosure. No representation, warranty or other statement
made by Borrower in any certificate or written statement furnished to Bank by
Borrower in connection with the transaction contemplated by this Agreement,
taken as a whole, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained in
such certificates or statements not misleading it being recognized by the Bank
that the projections and forecasts provided by Borrower are based on Borrower's
reasonable and good faith assessment of the probabilities of future events and
that actual results during the period or periods covered by any such projections
and forecasts may differ from the projected or forecasted results).

6.      AFFIRMATIVE COVENANTS

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

        6.1.    Good Standing. Borrower shall maintain, or cause to be
maintained, its and each of its Subsidiaries' corporate existence and good
standing in its jurisdiction of incorporation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to
have a Material Adverse Effect. Borrower shall maintain, and shall cause each of
its Subsidiaries to maintain, to the extent consistent with prudent management
of Borrower's business, in force all licenses, approvals and agreements, the
loss of which would reasonably be expected to have a Material Adverse Effect.

        6.2.    Government Compliance. Borrower shall meet, and shall cause each
Subsidiary to meet, the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA. Borrower shall comply, and shall
cause each Subsidiary to comply, with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance with
which could have a Material Adverse Effect.

        6.3.    Financial Statements, Reports, Certificates. Borrower shall
deliver to Bank: (a) as soon as available, but in any event within 30 days after
the end of each month, a company prepared consolidated balance sheet and income
statement covering Borrower's consolidated operations during such period, in a
form and certified by an officer of Borrower reasonably acceptable to Bank; (b)
as soon as available, but in any event within 120 days after the end of
Borrower's fiscal year, audited consolidated financial statements of Borrower
prepared in accordance with GAAP, consistently applied, together with an
unqualified opinion on such financial statements of an independent certified
public accounting

                                       17
<PAGE>   18

firm reasonably acceptable to Bank; (c) within five days of filing, copies of
all statements, reports and notices sent or made available generally by Borrower
to its security holders or to any holders of Subordinated Debt and all reports
on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission;
(d) promptly upon receipt of notice thereof, a report of any legal actions
pending or threatened against Borrower or any Subsidiary that could result in
damages or costs to Borrower or any Subsidiary of $100,000.00 or more; (e)
prompt notice of any material change in the composition of the Intellectual
Property Collateral, including, but not limited to, any subsequent ownership
right of Borrower in or to any Copyright, Patent or Trademark not specified in
any intellectual property security agreement between Borrower and Bank or
knowledge of an event that materially adversely affects the value of the
Intellectual Property Collateral; and (f) such budgets, sales projections,
operating plans or other financial information as Bank may reasonably request
from time to time.

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

                Within 30 days after the last day of each month, Borrower shall
deliver to Bank with the monthly financial reports a Compliance Certificate
signed by a Responsible Officer in substantially the form of Exhibit D hereto.

                Bank shall have a right from time to time hereafter to audit
Borrower's Accounts at Borrower's expense, provided that such audits will be
conducted no more often than every six months unless an Event of Default has
occurred and is continuing.

        6.4.    Inventory; Returns. Borrower shall keep all Inventory in good
and marketable condition, free from all material defects. Returns and
allowances, if any, as between Borrower and its account debtors shall be on the
same basis and in accordance with the usual customary practices of Borrower, as
they exist at the time of the execution and delivery of this Agreement. Borrower
shall promptly notify Bank of all returns and recoveries and of all disputes and
claims, where the return, recovery, dispute or claim involves more than
$100,000.00.

        6.5.    Taxes. Borrower shall make, and shall cause each Subsidiary to
make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Bank, on demand, appropriate certificates attesting to
the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish Bank with proof
satisfactory to Bank indicating that Borrower or a Subsidiary has made such
payments or deposits; provided that Borrower or a Subsidiary need not make any
payment if the amount or validity of such payment is (I) contested in good faith
by appropriate proceedings , (ii) is reserved against (to the extent required by
GAAP) by Borrower and (iii) no lien other than a Permitted Lien results.

        6.6.    Insurance.

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

                                       18
<PAGE>   19

to Borrower's ownership and use of the Collateral in amounts and of a type that
are customary to businesses similar to Borrower's.

                (b)     All such policies of insurance shall be in such form,
with such companies, and in such amounts as are reasonably satisfactory to Bank.
All such policies of property insurance shall contain a lender's loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee thereof and all liability insurance policies shall show the Bank as an
additional insured, and shall specify that the insurer must give at least 30
days notice to Bank before canceling its policy for any reason. At Bank's
request, Borrower shall deliver to Bank certified copies of such policies of
insurance and evidence of the payments of all premiums therefor. All proceeds
payable under any such policy shall, at the option of Bank, be payable to Bank
to be applied on account of the Obligations; provided that so long as no Event
of Default has occurred and is continuing, Borrower shall have the option of
applying the proceeds of any casualty policy to the replacement or repair of
destroyed or damaged property.

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

        6.8.    Quick Ratio. Borrower shall maintain, as of the last day of each
calendar month, a ratio of Quick Assets to Current Liabilities of at least 2.0
to 1.0.

        6.9.    Liquidity Coverage. Borrower shall maintain, as of the last day
of each calendar month, a ratio of consolidated cash, cash equivalents and
short-term investments, plus 80% of Eligible Accounts, minus the outstanding
amount of all Revolving Loans, to the outstanding amount of all Equipment Loans,
of at least 2.0 to 1.0.

        6.10.   Profitability. Borrower shall be profitable (profitability to be
determined in accordance with GAAP and to be net of charges of software
development costs) for each fiscal quarter, except Borrower may suffer a loss
not to exceed $150,000.00 for one fiscal quarter in any fiscal year, commencing
with the fiscal quarter ending March 31, 1999.

        6.11.   Registration of Intellectual Property Rights.

                (a)     Borrower shall register or cause to be registered (to
the extent not already registered) with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, those intellectual
property rights listed on Exhibits A, B and C to the Intellectual Property
Security Agreement delivered to Bank by Borrower in connection with this
Agreement within 10 days of the date of this Agreement. Borrower shall register
or cause to be registered with the United States Patent and Trademark Office or
the United States Copyright Office, as applicable, those additional intellectual
property rights developed or acquired by Borrower from time to time in
connection with any product prior to the sale or licensing of such product to
any third party, including without limitation revisions or additions to the
intellectual property rights listed on such Exhibits A, B and C.

                (b)     Borrower shall execute and deliver such additional
instruments and documents from time to time as Bank shall reasonably request to
perfect Bank's security interest in the Intellectual Property Collateral.

                (c)     Borrower shall (i) protect, defend and maintain the
validity and enforceability of the Trademarks, Patents, Copyrights, and Mask
Works, (ii) use its best efforts to detect

                                       19
<PAGE>   20

infringements of the Trademarks, Patents, Copyrights and Mask Works and promptly
advise Bank in writing of material infringements detected and (iii) not allow
any Trademarks, Patents, Copyrights, or Mask Works to be abandoned, forfeited or
dedicated to the public without the written consent of Bank, which shall not be
unreasonably withheld, unless Bank determines that reasonable business practices
suggest that abandonment is appropriate.

                (d)     Bank shall have the right, but not the obligation, to
take, at Borrower's sole expense, any actions that Borrower is required under
this section to take but which Borrower fails to take, after 15 days' notice to
Borrower. Borrower shall reimburse and indemnify Bank for all reasonable costs
and reasonable expenses incurred in the reasonable exercise of its rights under
this section.

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

7.      NEGATIVE COVENANTS

        Borrower covenants and agrees that, so long as any Credit Extension
hereunder shall be available and until payment in full of the outstanding
Obligations or for so long as Bank may have any commitment to make any Loans,
Borrower will not do any of the following:

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

        7.2.    Changes in Business, Ownership, or Management, Business
Locations. Engage in any business, or permit any of its Subsidiaries to engage
in any business, other than the businesses currently engaged in by Borrower and
any business substantially similar or related thereto (or incidental thereto),
or suffer a material change in Borrower's ownership or management. Borrower will
promptly notify Bank if it relocates its chief executive office or adds any new
offices or business locations.

        7.3.    Mergers or Acquisitions. Without the prior consent of Bank (not
to be unreasonably withheld), merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person.

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

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

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

                                       20
<PAGE>   21

Borrower's employee stock option/purchase plans in an aggregate amount not in
excess of $250,000.00 during any twelve month period.

        7.7.    Investments. Without the prior consent of Bank (not to be
unreasonably withheld), directly or indirectly acquire or own, or make any
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.

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

        7.9.    Intellectual Property Agreements. Borrower shall not permit the
inclusion in any material contract to which it becomes a party of any provisions
that could or might in any way prevent the creation of a security interest in
Borrower's rights and interests in any property included within the definition
of the Intellectual Property Collateral acquired under such contracts, except to
the extent that such provisions are necessary in Borrower's exercise of its
reasonable business judgement.

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

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

        7.12.   Compliance. Become an "investment company" or a company
controlled by an "investment company," within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Loan for such
purpose; fail to meet the minimum funding requirements of ERISA; permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, which violation could have a Material Adverse Effect; or permit any
of its Subsidiaries to do any of the foregoing.

8.      EVENTS OF DEFAULT

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

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

        8.2.    Covenant Default.

                                       21
<PAGE>   22

                (a)     If Borrower fails to perform any obligation under
Sections 6.3, 6.6, 6.7, 6.8, 6.9, 6.10 or 6.11 or violates any of the covenants
contained in Article 7 of this Agreement, or

                (b)     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 Loan Documents, or in any other
present or future agreement between Borrower and Bank and as to any default
under such other term, provision, condition, covenant or agreement that can be
cured, has failed to cure such default within ten days after the occurrence
thereof; provided that if the default cannot by its nature be cured within the
ten day period or cannot after diligent attempts by Borrower be cured within
such 10 day period, and such default is likely to be cured within a reasonable
time, then Borrower shall have an additional reasonable period (which shall not
in any case exceed 30 days) to attempt to cure such default, and within such
reasonable time period the failure to have cured such default shall not be
deemed an Event of Default (provided that no Loans will be required to be made
during such cure period);

        8.3.    Material Adverse Effect. If there occurs any event which has a
Material Adverse Effect;

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

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

        8.6.    Other Agreements. If there is a default in any agreement to
which Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of $100,000.00 or that could
have a Material Adverse Effect;

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

        8.8.    Judgments. If a judgment or judgments for the payment of money
in an amount, individually or in the aggregate, of at least $100,000.00 shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period
of ten days (provided that no Credit Extensions will be made prior to the
satisfaction or stay of such judgment); or

                                       22
<PAGE>   23

        8.9.    Misrepresentations. If any material misrepresentation or
material misstatement exists now or hereafter in any warranty or representation
set forth herein or in any certificate or writing delivered to Bank by Borrower
or any Person acting on Borrower's behalf pursuant to this Agreement or to
induce Bank to enter into this Agreement or any other Loan Document.

9.      BANK'S RIGHTS AND REMEDIES

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

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

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

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

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

                (e)     Without notice to Borrower set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by Bank, or
(ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank;

                (f)     Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral. Bank is hereby granted a non-exclusive, royalty-free
license or other right, solely pursuant to the provisions of this Section 9.1,
to use, without charge, Borrower's labels, patents, copyrights, mask works,
rights of use of any name, trade secrets, trade names, trademarks, service
marks, and advertising matter, or any property of a similar nature, as it
pertains to the Collateral, in completing production of, advertising for sale,
and selling any Collateral and, in connection with Bank's exercise of its rights
under this Section 9.1, Borrower's rights under all licenses and all franchise
agreements shall inure to Bank's benefit;

                (g)     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

                                       23
<PAGE>   24

Borrower's premises) as Bank determines is commercially reasonable, and apply
the proceeds thereof to the Obligations in whatever manner or order it deems
appropriate;

                (h)     Bank may credit bid and purchase at any public sale, or
at any private sale as permitted by law;

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

                (j)     Bank shall have a non-exclusive, royalty-free license to
use the Intellectual Property Collateral to the extent reasonably necessary to
permit Bank to exercise its rights and remedies upon the occurrence of an Event
of Default.

        9.2.    Power of Attorney. Effective only upon the occurrence and during
the continuance of an Event of Default, Borrower hereby irrevocably appoints
Bank (and any of Bank's designated officers, or employees) as Borrower's true
and lawful attorney to: (a) send requests for verification of Accounts or notify
account debtors of Bank's security interest in the Accounts; (b) endorse
Borrower's name on any checks or other forms of payment or security that may
come into Bank's possession; (c) sign Borrower's name on any invoice or bill of
lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account
debtors; (d) make, settle, and adjust all claims under and decisions with
respect to Borrower's policies of insurance; and (e) settle and adjust disputes
and claims respecting the accounts directly with account debtors, for amounts
and upon terms which Bank determines to be reasonable; (f) to modify, in its
sole discretion, any intellectual property security agreement entered into
between Borrower and Bank without first obtaining Borrower's approval of or
signature to such modification by amending Exhibit A, Exhibit B and Exhibit C
thereof, as appropriate, to include reference to any right, title or interest in
any Copyrights, Patents, Trademarks, Mask Works acquired by Borrower after the
execution hereof or to delete any reference to any right, title or interest in
any Copyrights, Patents, Trademarks, or Mask Works in which Borrower no longer
has or claims any right, title or interest; (g) to file, in its sole discretion,
one or more financing or continuation statements and amendments thereto,
relative to any of the Collateral without the signature of Borrower where
permitted by law; and (h) to transfer the Intellectual Property Collateral into
the name of Bank or a third party to the extent permitted under the UCC provided
Bank may exercise such power of attorney to sign the name of Borrower on any of
the documents described in Section 4.2 regardless of whether an Event of Default
has occurred. The appointment of Bank as Borrower's attorney in fact, and each
and every one of Bank's rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully repaid and performed
and Bank's obligation to provide Loans hereunder is terminated.

        9.3.    Accounts Collection. Effective only upon the occurrence and
during the continuance of an Event of Default, Bank may notify any Person owing
funds to Borrower of Bank's security interest in such funds and verify the
amount of such Account. Borrower shall collect all amounts owing to Borrower for
Bank, receive in trust all payments as Bank's trustee, and if requested or
required by Bank, immediately deliver such payments to Bank in their original
form as received from the account debtor, with proper endorsements for deposit.

        9.4.    Bank Expenses. If Borrower fails to pay any amounts or furnish
any required proof of payment due to third persons or entities, as required
under the terms of this Agreement, then Bank may do any or all of the following:
(a) upon reasonable notice to Borrower, make payment of the same or any part
thereof; (b) set up such reserves under the Revolving Commitment as Bank deems
necessary to protect Bank from the exposure created by such failure; or (c)
obtain and maintain insurance policies

                                       24
<PAGE>   25

of the type discussed in Section 6.6 of this Agreement, and take any action with
respect to such policies as Bank deems prudent. Any amounts so paid or deposited
by Bank shall constitute Bank Expenses, shall be immediately due and payable,
and shall bear interest at the then applicable rate hereinabove provided, and
shall be secured by the Collateral. Any payments made by Bank shall not
constitute an agreement by Bank to make similar payments in the future or a
waiver by Bank of any Event of Default under this Agreement.

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

        9.6.    Remedies Cumulative. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not expressly set forth herein as
provided under the UCC, by law, or in equity. No exercise by Bank of one right
or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank
shall constitute a waiver, election, or acquiescence by it. No waiver by Bank
shall be effective unless made in a written document signed on behalf of Bank
and then shall be effective only in the specific instance and for the specific
purpose for which it was given.

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

10.     NOTICES

        Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below for such party on the signature pages hereof. The parties hereto
may change the address at which they are to receive notices hereunder, by notice
in writing in the foregoing manner given to the other.

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

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

                                       25
<PAGE>   26

RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.

12.     GENERAL PROVISIONS

        12.1.   Successors and Assigns. This Agreement shall bind and inure to
the benefit of the respective successors and permitted assigns of each of the
parties; provided that neither this Agreement nor any rights hereunder may be
assigned by Borrower without Bank's prior written consent, which consent may be
granted or withheld in Bank's sole discretion. Bank may, upon the consent of
Borrower (not to be unreasonably withheld), sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, Bank's obligations,
rights and benefits hereunder.

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

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

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

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

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

        12.7.   Survival. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run;
provided that so long as the obligations referred to in the first sentence of
this Section 12.7 have been satisfied, and Bank has no commitment to make any
Credit Extensions or to make any other loans to Borrower, Bank shall release all
security interests granted hereunder and redeliver all Collateral held by it in
accordance with applicable law.

                                       26
<PAGE>   27

        12.8.   Confidentiality. In handling any confidential information Bank
shall exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Agreement
except that disclosure of such information may be made (i) to the subsidiaries
or affiliates of Bank in connection with their present or prospective business
relations with Borrower, (ii) to prospective transferees or purchasers of any
interest in the Loans, provided that they have entered into a comparable
confidentiality agreement in favor of Borrower and have delivered a copy to
Borrower, (iii) as required by law, regulations, rule or order, subpoena,
judicial order or similar order, (iv) as may be required in connection with the
examination, audit or similar investigation of Bank, and (v) as Bank may deem
appropriate in connection with the exercise of any remedies hereunder.
Confidential information hereunder shall not include information that either:
(a) is in the public domain or in the knowledge or possession of Bank when
disclosed to Bank, or becomes part of the public domain after disclosure to Bank
through no fault of Bank; or (b) is disclosed to Bank by a third party, provided
Bank does not have actual knowledge that such third party is prohibited from
disclosing such information.

                                       27
<PAGE>   28

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

NETRIGHT TECHNOLOGIES, INC.

By /s/ Mark Culhane
  -----------------------------------

Title: Chief Financial Officer
      -------------------------------

By /s/ Mahmood Panjwani
  -----------------------------------

Title: President
      -------------------------------

Address for Notices:           2121 South El Camino Real, Suite 400
                               San Mateo, CA 94403
                               Attention: Mark Culhane, CFO

SILICON VALLEY BANK

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

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

Address for Notices:           3003 Tasman Drive
                               Santa Clara, CA  95054-1191
                               Attention:  John China

                                       28
<PAGE>   29

                                    EXHIBIT A

                The Collateral shall consist of all right, title and interest of
Borrower, whether now existing or hereafter acquired or created and wherever
located, in and to the following:

                (a)     All goods, equipment, machinery, fixtures, vehicles
(including motor vehicles and trailers), and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing;

                (b)     All inventory, merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and finished products
including such inventory as is temporarily out of Borrower's custody or
possession or in transit and including any returns upon any accounts or other
proceeds, including insurance proceeds, resulting from the sale or disposition
of any of the foregoing and any documents of title representing any of the
above;

                (c)     All contract rights, general intangibles, goodwill,
trademarks, servicemarks, trade styles, trade names, patents, patent
applications, leases, license agreements, franchise agreements, blueprints,
drawings, purchase orders, customer lists, route lists, infringements, claims,
computer programs, computer discs, computer tapes, literature, reports,
catalogs, design rights, income tax refunds, payments of insurance and rights to
payment of any kind;

                (d)     All accounts, contract rights, royalties, license rights
and all other forms of obligations owing to Borrower, whether or not arising out
of the sale or lease of goods, the licensing of technology or the rendering of
services by Borrower, and whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower;

                (e)     All documents, cash, deposit accounts, securities,
investment property, letters of credit, certificates of deposit, instruments and
chattel paper and Borrower's Books relating to the foregoing;

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

                (g)     All Borrower's Books relating to the foregoing and any
and all claims, rights and interests in any of the above and all substitutions
for, additions and accessions to and proceeds thereof.

                                       1
<PAGE>   30

                                    EXHIBIT B

      LOAN PAYMENT/LOAN ADVANCE TELEPHONE REQUEST FORM
      DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.

TO:  CENTRAL CLIENT SERVICE DIVISION                  DATE:
                                                           ---------------------
FAX#:  (408)                                          TIME:
                                                           ---------------------

FROM:
     -----------------------------------
            BORROWER'S NAME

                  AUTHORIZED SIGNER'S NAME

                  AUTHORIZED SIGNATURE

PHONE:
      --------------------------------------------------------------------------

FROM ACCOUNT #                          TO ACCOUNT#
              ----------------------               -----------------------------

<TABLE>
<CAPTION>
REQUESTED TRANSACTION TYPE                             REQUEST DOLLAR AMOUNT
--------------------------                             ---------------------
<S>                                                    <C>
PRINCIPAL INCREASE (Loan)                              $
                                                        ------
PRINCIPAL PAYMENT (ONLY)                                      $
                                                               ------
INTEREST PAYMENT (ONLY)                                $
                                                        ------
PRINCIPAL AND INTEREST (PAYMENT)                              $
                                                               ------
</TABLE>

OTHER INSTRUCTIONS:
                   -------------------------------------------------------------

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

                                       1
<PAGE>   31

BANK USE ONLY:

TELEPHONE REQUEST:

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

Authorized Requester:
                     --------------------------------

      Authorized Signature (Bank)
      Phone #
             ----------------------------------------

                                        2

<PAGE>   32

                                    EXHIBIT C
                           BORROWING BASE CERTIFICATE

TO:         SILICON VALLEY BANK
FROM:       NETRIGHT TECHNOLOGIES, INC. ("Borrower")

Commitment Amount:       $

ACCOUNTS RECEIVABLE

<TABLE>
<S>      <C>                                              <C>
      1. Accounts Receivable Book Value as of             $
                                              --------     ---------------------

      2. Additions (please explain on reverse)            $
                                                           ---------------------

      3. TOTAL ACCOUNTS RECEIVABLE                        $
                                                           ---------------------

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)

      4. Amounts over 90 days due                         $
                                                           ---------------------
      5. Balance of 50% over 90 day accounts              $
                                                           ---------------------
      6. Concentration Limits                             $
                                                           ---------------------
      7. Foreign Accounts                                 $
                                                           ---------------------
      8. Governmental Accounts                            $
                                                           ---------------------
      9. Contra Accounts                                  $
                                                           ---------------------
      10.  Promotion or Demo Accounts                     $
                                                           ---------------------
      11. Intercompany/Employee Accounts                  $
                                                           ---------------------
      12. Other (please explain on reverse)               $
                                                           ---------------------
      13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS            $
                                                           ---------------------

CALCULATION OF LOAN VALUE

      14. Eligible Accounts (#3 minus #13)                $
                                                           ---------------------
      15. LOAN VALUE OF ACCOUNTS (80% of #14)             $
                                                           ---------------------

BALANCES

      16. Maximum Loan Amount                             $
                                                           ---------------------
      17. Total Funds Available  (Lesser of #16 or #15)   $
                                                           ---------------------
      18. Present balance owing on Line of Credit         $
                                                           ---------------------
      19. RESERVE POSITION (#17 minus #18)                $
                                                           ---------------------
</TABLE>

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

BORROWER: NETRIGHT TECHNOLOGIES, INC.

            By:
               --------------------------------
                  Authorized Signer

COMMENTS (FOR BANK USE ONLY):

Received By:
            ----------------------------
Date:
     -----------------------------------
Reviewed By:
            ----------------------------

Compliance Status:  Yes / No
                            ------------

                                        1

<PAGE>   33

                                    EXHIBIT D
                             COMPLIANCE CERTIFICATE

TO:         SILICON VALLEY BANK

FROM:       NETRIGHT TECHNOLOGIES, INC. ("Borrower")

        The undersigned authorized officer of the above Borrower hereby
certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is
in complete compliance for the period ending __________ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
as of the date hereof. Attached herewith are the required documents supporting
the above certification. The Officer further certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The Officer expressly acknowledges that no
borrowings may be requested by Borrower at any time or date of determination
that Borrower is not in compliance with any of the terms of the Agreement, and
that such compliance is determined not just at the date this certificate is
delivered.

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

<TABLE>
<CAPTION>
       REPORTING COVENANT                                                                 COMPLIES
       ------------------                                                                 --------
<S>                                        <C>                                            <C>
       Monthly financial statements        Monthly within 30 days                         Yes   No
       Annual (CPA Audited)                FYE within 120 days                            Yes   No
</TABLE>

<TABLE>
<CAPTION>
       FINANCIAL COVENANT                       REQUIRED              ACTUAL              COMPLIES
       ------------------                       --------              ------              --------
       Maintain on a Monthly Basis
       (unless otherwise stated):
<S>                                        <C>                <C>                         <C>
       Minimum Quick Ratio                 2:00:1.0           _____:1.0                   Yes   No
       Minimum Liquidity Ratio             2.00:1.0           _____:1.0                   Yes   No
       Profitability (Quarterly)           $1.00              $1.00                       Yes   No
</TABLE>

Sincerely,

                                   Date
--------------------------------       --------
SIGNATURE

--------------------------------
TITLE

BANK USE ONLY
Received By:
            -----------------------------------

Date
    -------------------------
Reviewed By:
            -----------------------------------
Compliance Status:  Yes / No
                            -------------------

                                        1
<PAGE>   34

                     DISBURSEMENT REQUEST AND AUTHORIZATION

TO:           SILICON VALLEY BANK

FROM:         NETRIGHT TECHNOLOGIES, INC. ("Borrower")

LOAN TYPE. This is a Variable Rate, Revolving Line of Credit of a principal
amount up to $_____________.

PRIMARY PURPOSE OF LOAN.  The primary purpose of this loan is for business.

SPECIFIC PURPOSE.  The specific purpose of this loan is:  _______________.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Bank's conditions for making the loan have been
satisfied. Please disburse the loan proceeds as follows:

<TABLE>
<CAPTION>
                                             Revolving Line
                                             --------------
<S>                                          <C>
       Amount paid to Borrower directly:        $
                                                 --------
       Undisbursed Funds                        $
                                                 --------
       Principal                                $
                                                 --------
</TABLE>

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:

<TABLE>
<S>                                                    <C>
       Prepaid  Finance Charges Paid in Cash:          $________
              $_______      Loan Fee
              $_______      Accounts Receivables Audit

       Other Charges Paid in Cash:                     $________
              $_______      UCC Search Fees
              $_______      UCC Filing Fees
              $_______      Patent Filing Fees
              $_______      Trademark Filing Fees
              $_______      Copyright Filing Fees
              $________     Outside Counsel Fees and Expenses
                         [ESTIMATE, DO NOT LEAVE BLANK]
       Total Charges Paid in Cash                      $________
</TABLE>

AUTOMATIC PAYMENTS. Borrower hereby authorizes Bank automatically to deduct from
Borrower's account numbered ______ the amount of any loan payment. If the funds
in the account are insufficient to cover any payment, Bank shall not be
obligated to advance funds to cover the payment.

FINANCIAL CONDITION.  BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS

                                        1

<PAGE>   35

DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO BANK.  THIS
AUTHORIZATION IS DATED AS OF _____________, 19___.

BORROWER:

By:
   -------------------------------------
            Authorized Officer

                                        2

<PAGE>   36

                         AGREEMENT TO PROVIDE INSURANCE

TO:           SILICON VALLEY BANK

FROM:         NETRIGHT TECHNOLOGIES, INC. ("Borrower")

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

<TABLE>
<S>                                <C>
              Collateral:          All Inventory, Equipment and Fixtures.
              Type:                All risks, including fire, theft and liability.

              Amount:              Full insurable value.
              Basis:               Replacement value.

              Endorsements:        Loss payable clause to Bank with stipulation that coverage will not be
                                   cancelled or diminished without a minimum of 20 days prior written notice
                                   to Bank.
</TABLE>

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

        FAILURE TO PROVIDE INSURANCE. Borrower agrees to deliver to Bank, on or
before closing, evidence of the required insurance as provided above, with an
effective date of ______________, 19___, or earlier. Borrower acknowledges and
agrees that if Borrower fails to provide any required insurance or fails to
continue such insurance in force, Bank may do so at Borrower's expense as
provided in the Loan and Security Agreement. The cost of such insurance, at the
option of Bank, shall be payable on demand or shall be added to the indebtedness
as provided in the security document. BORROWER ACKNOWLEDGES THAT IF BANK SO
PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION
AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE BALANCE OF THE LOAN;
HOWEVER, BORROWER'S EQUITY IN THE COLLATERAL MAY NOT BE INSURED. IN ADDITION,
THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE
INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY FINANCIAL
RESPONSIBILITY LAWS.

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

                                        1

<PAGE>   37

        BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT
TO PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 31,
1999.

BORROWER:

By: /s/ Mark Culhane, Chief Financial Officer
   -------------------------------------------
       Authorized Officer

       FOR BANK USE ONLY
       INSURANCE VERIFICATION

DATE:                                                                PHONE:
AGENT'S NAME:

INSURANCE COMPANY:
POLICY NUMBER:
EFFECTIVE DATES:

COMMENTS:

                                        2

<PAGE>   38

        This JUNE 1999 LOAN MODIFICATION AGREEMENT, dated as of June 30, 1999
(this "Agreement"), is between iMANAGE, INC. (formerly known as NETRIGHT
TECHNOLOGIES, INC.), a Delaware corporation ("Borrower"), and SILICON VALLEY
BANK ("Bank").

                                    Recitals

        A.      In addition to any other obligations which may be owing by
Borrower to Bank, Borrower is indebted to Bank pursuant to a Loan and Security
Agreement, dated as of March 31, 1999 (as may have been amended to the date
hereof, the "Loan Agreement"). The term "Obligations" and the other terms
defined in the Loan Agreement are used herein with the same meanings unless
otherwise defined herein.

        B.      Repayment of the Obligations is secured by the Collateral
described in the Loan Agreement and in an Intellectual Property Security
Agreement. The Loan Agreement, such Intellectual Property Security Agreement and
all other documents evidencing or securing the Obligations are called the
"Existing Loan Documents" herein.

        The parties hereto hereby agree as follows:

        1.      Amendments.

                (a)     The following defined terms are hereby added to Section
1.1 of the Loan Agreement:

                "Cash Management Advances" means all amounts advanced by Bank
for merchant services, direct deposit of payroll, business credit card and check
cashing services provided to Borrower as identified in the Cash Management
Services Agreement between Borrower and Bank.

                "Cash Management Sublimit" means $5,000,000.00.

                "Exchange Contract" has the meaning set forth in Section 2.1.4.

                "June 1999 Equipment Availability Date" has the meaning set
forth in Section 2.1.5.

                "June 1999 Equipment Commitment" means a credit extension of up
to $1,000,000.00.

                "June 1999 Equipment Loan" has the meaning set forth in Section
2.1.5.

                "Letter of Credit" means a letter of credit or similar
undertaking issued by Bank pursuant to Section 2.1.3.

                (b)     The definition of "Loan" in Section 1.1 of the Loan
Agreement is amended and restated in its entirety to read as follows:

                                       -1-

<PAGE>   39

                "Loan" means a Revolving Loan, an Equipment Loan or a June 1999
Equipment Loan.

                (c)     Section 2.1.1.(a) of the Loan Agreement is amended and
restated in its entirety to read as follows:

                2.1.1. (a) Subject to and upon the terms and conditions of this
                Agreement, Bank agrees to make Revolving loans to Borrower in an
                aggregate outstanding amount not to exceed: (i) the Revolving
                Commitment or the Borrowing Base, whichever is less, minus (ii)
                the amount of all outstanding Letters of Credit (including drawn
                but unreimbursed Letters of Credit), minus (iii) the Foreign
                Exchange Reserve, and minus (iv) the amount of all outstanding
                Cash Management Advances. Subject to the terms and conditions of
                this Agreement, amounts borrowed pursuant to this Section 2.1
                may be repaid and reborrowed at any time during the term of this
                Agreement.

                (d)     The first sentence of Section 2.1.2.(b) of the Loan
Agreement is amended by deleting the reference to "Section 2.3(b)" contained
therein and by substituting therefor a reference to "Section 2.3(a)."

                (e)     The following Sections 2.1.3., 2.1.4. and 2.1.5. are
hereby added to the Loan Agreement:

                        2.1.3.  Letters of Credit.

                                (a)     Subject to the terms and conditions of
        this Agreement, Bank agrees to issue or cause to be issued Letters of
        Credit for the account of Borrower in an aggregate outstanding face
        amount not to exceed (i) the Revolving Commitment or the Borrowing Base,
        whichever is less, minus (ii) the amount of all outstanding Revolving
        Loans, the amount of all outstanding Cash Management Advances and the
        Foreign Exchange Reserve; provided that the face amount of outstanding
        Letters of Credit (including drawn but unreimbursed Letters of Credit)
        shall not in any case exceed $5,000,000.00. Each Letter of Credit shall
        have an expiry date no later than 180 days after the Revolving Maturity
        Date provided that Borrower's Letter of Credit reimbursement obligation
        shall be secured by cash on terms acceptable to Bank at any time after
        the Revolving Maturity Date if the term of this Agreement is not
        extended by Bank. All Letters of Credit shall be, in form and substance,
        acceptable to Bank in its sole discretion and shall be subject to the
        terms and conditions of Bank's form of standard Application and Letter
        of Credit Agreement.

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

                                       -2-

<PAGE>   40

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

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

                        2.1.4.  Foreign Exchange Contract; Foreign Exchange
Settlements.

                                (a)     Subject to the terms of this Agreement,
        Borrower may enter into foreign exchange contracts (the "Exchange
        Contracts") not to exceed an aggregate amount of $5,000,000.00 (the
        "Contract Limit"), pursuant to which Bank shall sell to or purchase from
        Borrower foreign currency on a spot or future basis. Borrower shall not
        request any Exchange Contracts at any time it is out of compliance with
        any of the provisions of this Agreement. All Exchange Contracts must
        provide for delivery of settlement on or before the Revolving Maturity
        Date. The amount available under the Revolving Commitment at any time
        shall be reduced by the following amounts (the "Foreign Exchange
        Reserve") on any given day (the "Determination Date"): (i) on all
        outstanding Exchange Contracts on which delivery is to be effected or
        settlement allowed more than two business days after the Determination
        Date, 10% of the gross amount of the Exchange Contracts; plus (ii) on
        all outstanding Exchange Contracts on which delivery is to be effected
        or settlement allowed within two business days after the Determination
        Date, 100% of the gross amount of the Exchange Contracts.

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

                                (c)     Borrower shall not permit the total
        gross amount of all Exchange Contracts on which delivery is to be
        effected and settlement allowed in any two business day period to be
        more than $5,000,000.00 (the "Settlement Limit") nor shall Borrower
        permit the total gross amount of all Exchange Contracts to which
        Borrower is a party, outstanding at any

                                      -3-

<PAGE>   41

        one time, to exceed the Contract Limit. Notwithstanding the above,
        however, the amount which may be settled in any two (2) business day
        period may be increased above the Settlement Limit up to, but in no
        event to exceed, the amount of the Contract Limit under either of the
        following circumstances:

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

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

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

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

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

                        2.1.5.  June 1999 Equipment Loans.

                        (a)     Subject to an upon the terms and conditions of
        this Agreement, at any time from the date hereof through the date which
        is twelve months from the date of that certain June 1999 Loan
        Modification Agreement, between Bank and Borrower (the "June 1999
        Equipment Availability Date"), but no more frequently than once during
        each calendar month, Bank agrees to make advances (each and "Equipment
        Loan") to Borrower in an aggregate amount not to exceed the June 1999
        Equipment Commitment. Borrower shall deliver to Bank, at the time of
        each June 1999 Equipment Loan request, an invoice for the equipment to
        be financed

                                      -4-

<PAGE>   42

        by such June 1999 Equipment Loan. The June 1999 Equipment Loan shall be
        used only to purchase or refinance Equipment purchased on or after 120
        days prior to the date hereof and shall not exceed 100% of the invoice
        amount of such equipment approved from time to time by Bank, including
        sales taxes, freight, and installation expenses.

                        (b)     Interest Rate. Except as set forth in Section
        2.3(a), the outstanding principal amount of the June 1999 Equipment
        Loans shall bear interest, on the average daily balance thereof, at a
        per annum rate equal to 0.50 percentage points above the Prime Rate.
        Accrued interest on each June 1999 Equipment Loan shall be payable
        monthly on each Payment Date and on the date the final installment of
        principal on the June 1999 Equipment Loans is due.

                        (c)     Any June 1999 Equipment Loans that are
        outstanding on the June 1999 Equipment Availability End Date will be
        payable in 36 equal monthly installments of principal, on each Payment
        Date, beginning on the Payment Date of following the June 1999 Equipment
        Availability End Date and continuing until June 30, 2003, when all June
        1999 Equipment Loans shall be immediately due and payable. June 1999
        Equipment Loans, once repaid, may not be reborrowed.

                        (d)     When Borrower desires to obtain a June 1999
        Equipment Loan, Borrower shall notify Bank (which notice shall be
        irrevocable) by facsimile transmission to be received no later than 3:00
        p.m. Pacific time one Business Day before the day on which the June 1999
        Equipment Loan is to be made. Such notice shall be substantially in the
        form of Exhibit B. The notice shall be signed by a Responsible Officer
        or its designee and include a copy of the invoice for the Equipment to
        be financed.

                        (e)     Section 2.2 of the Loan Agreement is amended and
        restated in its entirety to read as follows:

                2.2     Overadvances. If, at any time or for any reason, the
amount of Obligations owed by Borrower to Bank pursuant to Section 2.1.1, 2.1.3
and 2.1.4 of this Agreement, plus the amount of all outstanding Cash Management
Advances, is greater than the lesser of (i) the Revolving Commitment or (ii) the
Borrowing Base, Borrower shall immediately pay to Bank, in cash, the amount of
such excess.

        2.      Corresponding Amendments. The Existing Loan Documents are hereby
amended wherever necessary to reflect the changes described above.

        3.      No Defenses. Borrower agrees that it has no defenses against the
obligations to pay any amounts under the Obligations.

        4.      Continuing Validity. Borrower understands and agrees that in
modifying the existing Obligations, Bank is relying upon Borrower's
representations, warranties, and agreements, as set forth in the Existing Loan
Documents. Except as expressly modified pursuant to this Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Bank's agreement to modifications to the existing Obligations pursuant to this
Agreement in no way shall obligate Bank to make any future modifications to the
Obligations.

                                      -5-

<PAGE>   43

Nothing in this Agreement shall constitute a satisfaction of the Obligations. It
is the intention of Bank and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released by
Bank in writing. The terms of this paragraph apply not only to this Agreement,
but also to all subsequent loan modification agreements.

        5.      Condition. The effectiveness of this Agreement is conditioned
upon (a) the execution and delivery hereof by both Bank and Borrower; and (b)
receipt by Bank from Borrower of a Facility Fee in the amount of $2,500.00 on
account of the June 1999 Equipment Commitment.

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

BORROWER:                               BANK:

iMANAGE, INC.                           SILICON VALLEY BANK

By /s/ Mark Culhane                     By /s/ Chris Stedman
  --------------------------------        --------------------------------------

Title: Chief Financial Officer          Title: AVP
      ----------------------------            ----------------------------------

                                       -6-

<PAGE>   44

        This AUGUST 1999 LOAN MODIFICATION AGREEMENT, dated as of August 31,
1999 (this "Agreement"), is between iMANAGE, INC. (formerly known as NETRIGHT
TECHNOLOGIES, INC.), a Delaware corporation ("Borrower"), and SILICON VALLEY
BANK ("Bank").

                                    Recitals

        A. In addition to any other obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a Loan and Security Agreement,
dated as of March 31, 1999 (as may have been amended to the date hereof, the
"Loan Agreement"). The term "Obligations" and the other terms defined in the
Loan Agreement are used herein with the same meanings unless otherwise defined
herein.

        B. Repayment of the Obligations is secured by the Collateral described
in the Loan Agreement and in an Intellectual Property Security Agreement. The
Loan Agreement, such Intellectual Property Security Agreement and all other
documents evidencing or securing the Obligations are called the "Existing Loan
Documents" herein.

        The parties hereto hereby agree as follows:

        1.  Amendments.

               (a) Section 6.10 of the Loan Agreement is amended and restated in
its entirety to read as follows:

                      6.10 Profitability. Borrower shall be profitable
                      (profitability to be determined in accordance with GAAP,
                      to be net of charges of software development costs and to
                      exclude any and all non-cash expenses associated directly
                      with the amortization of stock compensation to employees
                      of Borrower) for each fiscal quarter, except Borrower may
                      suffer a loss not to exceed $150,000.00 for one fiscal
                      quarter in any fiscal year, commencing with the fiscal
                      quarter ending March 31, 1999.

        2. Waiver. Bank waives, on a one-time basis, any and all violations by
Borrower prior to the execution and delivery of this Amendment of the
profitability covenant contained in Section 6.10 of the Loan Agreement.

        3. Corresponding Amendments. The Existing Loan Documents are hereby
amended wherever necessary to reflect the changes described above.

        4. No Defenses. Borrower agrees that it has no defenses against the
obligations to pay any amounts under the Obligations.

        5. Continuing Validity. Borrower understands and agrees that in
modifying the existing Obligations, Bank is relying upon Borrower's
representations, warranties, and agreements, as set forth in the Existing Loan
Documents. Except as expressly modified pursuant to this Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force

                                      -1-
<PAGE>   45

and effect. Bank's agreement to modifications to the existing Obligations
pursuant to this Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Agreement shall constitute a
satisfaction of the Obligations. It is the intention of Bank and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Bank in writing. The terms of this
paragraph apply not only to this Agreement, but also to all subsequent loan
modification agreements.

        6. Condition. The effectiveness of this Agreement is conditioned upon
(a) the execution and delivery hereof by both Bank and Borrower; and (b) receipt
by Bank from Borrower of an Amendment Fee in the amount of $500.00.

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

BORROWER:                                   BANK:

iMANAGE, INC.                               SILICON VALLEY BANK

By    /s/  Mark Culhane                      By      /s/  Chris Stedman
   --------------------------------             --------------------------------

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

                                      -2-
<PAGE>   46

        This MARCH 2000 LOAN MODIFICATION AGREEMENT, dated as of March __, 2000
(this "Agreement"), is between iMANAGE, INC. (formerly known as NETRIGHT
TECHNOLOGIES, INC.), a Delaware corporation ("Borrower"), and SILICON VALLEY
BANK ("Bank").

                                    Recitals

        A. In addition to any other obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a Loan and Security Agreement,
dated as of March 31, 1999 (as may have been amended to the date hereof, the
"Loan Agreement"). The term "Obligations" and the other terms defined in the
Loan Agreement are used herein with the same meanings unless otherwise defined
herein.

        B. Repayment of the Obligations is secured by the Collateral described
in the Loan Agreement and in an Intellectual Property Security Agreement. The
Loan Agreement, such Intellectual Property Security Agreement and all other
documents evidencing or securing the Obligations are called the "Existing Loan
Documents" herein.

        The parties hereto hereby agree as follows:

        1.     Amendments.

               (a)    To amend and restate certain definitions in Section 1.1
thereof, as follows:

                      "Cash Management Sublimit" means $3,000,000.00.

                      "Loan" means a Revolving Loan, an Equipment Loan, a June
                      1999 Equipment Loan, or a March 2000 Equipment Loan.

                      "Revolving Commitment" means a credit extension of up to
                      $3,000,000.00.

                      "Revolving Maturity Date" means March 30, 2001.

               (b)    The following defined terms are hereby added to
Section 1.1 of the Loan Agreement:

                      "March 2000 Equipment Availability End Date" has the
                      meaning set forth in Section 2.1.6.

                      "March 2000 Equipment Commitment" means a credit extension
                      of up to $2,000,000.00.

                      "March 2000 Equipment Loan" has the meaning set forth in
                      Section 2.1.6.

                      "March 2000 Loan Modification Agreement" means the March
                      2000 Loan Modification Agreement between Bank and
                      Borrower, dated March __, 2000.

                                      -1-
<PAGE>   47

               (c)    Section 2.1.3.(a) is hereby amended and restated in its
entirety to read as follows:

                      2.1.3. (a) Subject to the terms and conditions of this
                      Agreement, Bank agrees to issue or cause to be issued
                      Letters of Credit for the account of Borrower in an
                      aggregate outstanding face amount not to exceed (i) the
                      Revolving Commitment or the Borrowing Base, whichever is
                      less, minus (ii) the amount of all outstanding Revolving
                      Loans, the amount of all outstanding Cash Management
                      Advances and the Foreign Exchange Reserve; provided that
                      the face amount of outstanding Letters of Credit
                      (including drawn but unreimbursed Letters of Credit) shall
                      not in any case exceed $3,000,000.00. Each Letter of
                      Credit shall have an expiry date no later than 180 days
                      after the Revolving Maturity Date provided that Borrower's
                      Letter of Credit reimbursement obligation shall be secured
                      by cash on terms acceptable to Bank at any time after the
                      Revolving Maturity Date if the term of this Agreement is
                      not extended by Bank. All Letters of Credit shall be, in
                      form and substance, acceptable to Bank in its sole
                      discretion and shall be subject to the terms and
                      conditions of Bank's form of standard Application and
                      Letter of Credit Agreement.

               (d)    Section 2.1.4.(a) is hereby amended and restated in its
entirety to read as follows:

                      2.1.4. (a) Subject to the terms of this Agreement,
                      Borrower may enter into foreign exchange contracts (the
                      "Exchange Contracts") not to exceed an aggregate amount of
                      $3,000,000.00 (the "Contract Limit"), pursuant to which
                      Bank shall sell to or purchase from Borrower foreign
                      currency on a spot or future basis. Borrower shall not
                      request any Exchange Contracts at any time it is out of
                      compliance with any of the provisions of this Agreement.
                      All Exchange Contracts must provide for delivery of
                      settlement on or before the Revolving Maturity Date. The
                      amount available under the Revolving Commitment at any
                      time shall be reduced by the following amounts (the
                      "Foreign Exchange Reserve") on any given day (the
                      "Determination Date"): (i) on all outstanding Exchange
                      Contracts on which delivery is to be effected or
                      settlement allowed more than two business days after the
                      Determination Date, 10% of the gross amount of the
                      Exchange Contracts; plus (ii) on all outstanding Exchange
                      Contracts on which delivery is to be effected or
                      settlement allowed within two business days after the
                      Determination Date, 100% of the gross amount of the
                      Exchange Contracts.

               (e)    Section 2.1.4(c) is hereby amended and restated in its
entirety to read as follows:

                      2.1.4. (c) Borrower shall not permit the total gross
                      amount of all Exchange Contracts on which delivery is to
                      be effected and settlement allowed in any two business day
                      period to be more than

                                      -2-
<PAGE>   48

                      $3,000,000.00 (the "Settlement Limit") nor shall Borrower
                      permit the total gross amount of all Exchange Contracts to
                      which Borrower is a party, outstanding at any one time, to
                      exceed the Contract Limit. Notwithstanding the above,
                      however, the amount which may be settled in any two (2)
                      business day period may be increased above the Settlement
                      Limit up to, but in no event to exceed, the amount of the
                      Contract Limit under either of the following
                      circumstances:

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

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

                      (f) Section 2.1.5 (c) is hereby amended and restated in
its entirety to read as follows:

                      2.1.5. (c) Any June 1999 Equipment Loans that are
                      outstanding on the June 1999 Equipment Availability Date
                      will be payable in 36 equal monthly installments of
                      principal, on each Payment Date, beginning on the Payment
                      Date following the June 1999 Equipment Availability Date
                      and continuing until June 30, 2003, when all June 1999
                      Equipment Loans shall be immediately due and payable. June
                      1999 Equipment Loans, once repaid, may not be reborrowed.

               (g)    Section 2.1.6  is hereby added to the Loan Agreement:

                      2.1.6. March 2000 Equipment Loans.

                      (a) Subject to and upon the terms and conditions of this
                      Agreement, at any time from the date hereof through the
                      date which is twelve months from the date of that certain
                      March 2000 Loan Modification Agreement, between Bank and
                      Borrower (the "March 2000 Equipment Availability End
                      Date"), but no more frequently than once during each
                      calendar month, Bank agrees to make advances (each, a
                      "March 2000 Equipment Loan") to Borrower in an aggregate
                      amount not to exceed the March 2000 Equipment Commitment.
                      Borrower shall deliver to Bank, at the time of each March
                      2000 Equipment Loan request, an invoice for the equipment
                      to be financed by such March 2000 Equipment Loan. Each
                      March 2000 Equipment Loan shall be used only to

                                      -3-
<PAGE>   49

                      purchase or refinance Equipment purchased on or after 90
                      days prior to the date hereof and shall not exceed 100% of
                      the invoice amount of such equipment approved from time to
                      time by Bank, including sales taxes, freight, and
                      installation expenses.

                      (b) Interest Rate. Except as set forth in Section 2.3(a),
                      the outstanding principal amount of the March 2000
                      Equipment Loans shall bear interest, on the average daily
                      balance thereof, at a per annum rate equal to 0.50
                      percentage points above the Prime Rate. Accrued interest
                      on each March 2000 Equipment Loan shall be payable monthly
                      on each Payment Date and on the date the final installment
                      of principal on the March 2000 Equipment Loans is due.

                      (c) Any March 2000 Equipment Loans that are outstanding on
                      the March 2000 Equipment Availability End Date will be
                      payable in 36 equal monthly installments of principal, on
                      each Payment Date, beginning on the Payment Date following
                      the March 2000 Equipment Availability End Date and
                      continuing until March 31, 2004, when all March 2000
                      Equipment Loans shall be immediately due and payable.
                      March 2000 Equipment Loans, once repaid, may not be
                      reborrowed.

                      (d) When Borrower desires to obtain a March 2000 Equipment
                      Loan, Borrower shall notify Bank (which notice shall be
                      irrevocable) by facsimile transmission to be received no
                      later than 3:00 p.m. Pacific time one Business Day before
                      the day on which the March 2000 Equipment Loan is to be
                      made. Such notice shall be substantially in the form of
                      Exhibit B. The notice shall be signed by a Responsible
                      Officer or its designee and include a copy of the invoice
                      for the Equipment to be financed.

               (g)    Section 6.10 of the Loan Agreement is amended and restated
in its entirety to read as follows:

                      6.10 Cash Losses. Borrower shall not have an Adjusted Net
                      Loss (as hereafter defined) of greater than $1,000,000 in
                      any fiscal quarter. As used herein, Adjusted Net Loss
                      means for any period, the Borrower's consolidated net loss
                      (determined in accordance with GAAP) excluding all
                      non-cash items, including the amortization of goodwill,
                      depreciation, and the amortization of stock-based
                      compensation, to the extent such items were deducted in
                      calculating such net loss.

        2.     Corresponding Amendments. The Existing Loan Documents are hereby
amended wherever necessary to reflect the changes described above.

        3.     No Defenses. Borrower agrees that it has no defenses against the
obligations to pay any amounts under the Obligations.

        4.     Continuing Validity. Borrower understands and agrees that in
modifying the existing Obligations, Bank is relying upon Borrower's
representations, warranties, and

                                      -4-
<PAGE>   50

agreements, as set forth in the Existing Loan Documents. Except as expressly
modified pursuant to this Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Bank's agreement to modifications
to the existing Obligations pursuant to this Agreement in no way shall obligate
Bank to make any future modifications to the Obligations. Nothing in this
Agreement shall constitute a satisfaction of the Obligations. It is the
intention of Bank and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released by
Bank in writing. The terms of this paragraph apply not only to this Agreement,
but also to all subsequent loan modification agreements.

        5.     Condition. The effectiveness of this Agreement is conditioned
upon (a) the execution and delivery hereof by both Bank and Borrower; and (b)
receipt by Bank from Borrower of a Facility Fee in the amount of $30,000 on
account of the March 2000 Equipment Commitment and the renewal of the Revolving
Commitment.

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

BORROWER:                                   BANK:

iMANAGE, INC., a Delaware corporation       SILICON VALLEY BANK

By __________________________________       By _________________________________

Title: ______________________________       Title: _____________________________

                                      -5-<PAGE>   1
                                                                     EXHIBIT 4.1

                               POET HOLDINGS, INC.
                                 1995 STOCK PLAN
                             (AMENDED AND RESTATED)

        1. Purposes of the Plan. The purposes of this 1995 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants of the Company and its Parent or Subsidiaries and to promote the
success of the Company's business. Options granted under the Plan may be
Incentive Stock Options or Nonstatutory Stock Options, as determined by the
Administrator at the time of grant of an Option and subject to the applicable
provisions of Section 422 of the Code and the regulations promulgated
thereunder. Stock Purchase Rights may also be granted under the Plan.

        2. Definitions. As used herein, the following definitions shall apply:

               (a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

               (b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under United States state corporate
laws, federal and state securities laws, the Code any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options or Stock
Purchase Rights will be granted under the Plan.

               (c) "Board" means the Board of Directors of the Company.

               (d) "Code" means the Internal Revenue Code of 1986, as amended.

               (e) "Committee" means a Committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.

               (f) "Common Stock" means the Common Stock of the Company.

               (g) "Company" means POET Holdings, Inc., a Delaware corporation.

               (h) "Consultant" means any person who is engaged by the Company
or any Parent or Subsidiary to render services to such entity.

               (i) "Continuous Status as an Employee or Consultant" means that
the employment or consulting relationship with the Company, any Parent or
Subsidiary is not interrupted or terminated. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company. For purposes of Incentive Stock Options, no such leave may exceed
ninety (90) days, unless reemployment upon expiration of

<PAGE>   2
such leave is guaranteed by statute or contract, including Company policies. If
reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the ninety-first (91st) day of such leave any Incentive
Stock Option held by the Optionee shall cease to be treated as an Incentive
Stock Option and shall be treated for tax purposes as a Nonstatutory Stock
Option.

               (j) "Director" means a member of the Board of Directors of the
Company.

               (k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.

               (l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

               (m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                          (i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination and reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

                          (ii) If the Common Stock is quoted on the NASDAQ
System (but not on the Nasdaq National Market thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination
and reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

                          (iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.

               (n) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.

               (o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

               (p) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

               (q) "Option" means a stock option granted pursuant to the Plan.

               (r) "Option Agreement" means an agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.

                                      -2-
<PAGE>   3
               (s) "Optioned Stock" means the Common Stock subject to an Option
or a Stock Purchase Right.

               (t) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the plan.

               (u) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

               (v) "Plan" means this 1995 Stock Plan.

               (w) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of a Stock Purchase Right under Section 11 below.

               (x) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

               (y) "Section 16(b)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.

               (z) "Share" means a share of the Company's Common Stock, as
adjusted in accordance with Section 12 below.

               (aa) "Stock Purchase Right" means a right to purchase Common
Stock pursuant to Section 11 below.

               (bb) "Sub-Plan" means a Sub-Plan created under and subject to the
terms of this Plan, pursuant to which Options and/or Stock Purchase Rights which
qualify for preferred tax treatment under foreign tax laws may be granted to
Employees and Consultants of the Company or any Parent or Subsidiary of the
Company.

               (cc) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.

        3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is one million two hundred thousand (1,200,000) Shares,
plus an annual increase will be added on the first day of the fiscal year
beginning in 2000, equal to (i) 230,889 shares, (ii) 2% of the outstanding
shares on that date, (iii) or a lesser amount determined by the Board. The
Shares may be authorized but unissued, or reacquired Common Stock.

        If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an option
exchange program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the

                                      -3-
<PAGE>   4
Plan, upon exercise of either an Option or Stock Purchase Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, and the original purchaser of such
Shares did not receive any benefits of ownership of such Shares, such Shares
shall become available for future grant under the Plan. For purposes of the
preceding sentence, voting rights shall not be considered a benefit of Share
ownership.

        4. Administration of the Plan.

               (a) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to Directors,
Officers and Employees who are neither Directors nor Officers.

               (b) Administration With Respect to Directors and Officers. With
respect to grants of Options and Stock Purchase Rights to Employees who are also
Officers or Directors of the Company, the Plan shall be administered by (A) the
Board if the Board may administer the Plan in compliance with the rules under
Rule 16b-3 promulgated under the Exchange Act or any successor thereto ("Rule
16b-3") relating to the disinterested administration of employee benefit plans
under which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made and any other Applicable Laws, or (B) a Committee
designated by the Board to administer the Plan, which Committee shall be
constituted to comply with the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made and
any other Applicable Laws. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.

               (c) Administration With Respect to Other Employees and
Consultants. With respect to grants of Options and Stock Purchase Rights to
Employees or Consultants who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by
the Board, which committee shall be constituted in such a manner as to satisfy
the Applicable Laws, and the requirements of any stock exchange upon which the
Company's Common Stock is listed. Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws.

               (d) Powers of the Administrator. Subject to the provisions of the
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to

                                      -4-
<PAGE>   5
the approval of any relevant authorities, including the approval, if required,
of any stock exchange upon which the Common Stock is listed, the Administrator
shall have the authority in its discretion:

                          (i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(m) of the Plan;

                          (ii) to select the Consultants and Employees to whom
Options and Stock Purchase Rights may from time to time be granted hereunder;

                          (iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof are granted hereunder;

                          (iv) to determine the number of Shares to be covered
by each such Option or Stock Purchase Right granted hereunder;

                          (v) to approve forms of agreement for use under the
Plan;

                          (vi) to determine the terms and conditions of any
Option or Stock Purchase Right granted hereunder;

                          (vii) to determine whether and under what
circumstances an Option may be settled in cash under subsection 9(f) instead of
Common Stock;

                          (viii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option has declined since the date the Option was granted;

                          (ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
Sub-Plans established for the purpose of qualifying Options or Stock Purchase
Rights for preferred tax treatment under foreign tax laws;

                          (x) to provide for early exercise of Options for the
purchase of unvested Shares, subject to such terms and conditions as the
Administrator may determine; and

                          (xi) to construe and interpret the terms of the Plan
and Options or Stock Purchase Rights granted pursuant to the Plan.

               (e) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options or Stock Purchase
Rights.

        5. Eligibility and Limitations.

               (a) Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee or Consultant who has been granted an Option or
Stock Purchase Right may, if otherwise eligible, be granted additional Options
or Stock Purchase Rights.

                                      -5-
<PAGE>   6
               (b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of Shares subject to an Optionee's Incentive Stock Options
granted by the Company, any Parent or Subsidiary, which become exercisable for
the first time during any calendar year (under all plans of the Company or any
Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted. The
Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.

               (c) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuation of his or her
employment or consulting relationship with the Company, nor shall it interfere
in any way with his or her right or the Company's right to terminate his or her
employment or consulting relationship at any time, with or without cause.
Options under the Plan are granted in a discretionary fashion, and the grant of
one or more Options and/or Stock Purchase Rights under the Plan shall not give
rise to a right in any Employee or Consultant to receive additional Option
and/or Stock Purchase Right grants in the future. Further, the Board retains the
right, in its sole discretion, to terminate the Plan for any reason, or no
reason, at any time.

               (d) The following limitations shall apply to grants of Options
and Stock Purchase Rights:

                          (i) No Employee or Consultant shall be granted, in any
fiscal year of the Company, Options and Stock Purchase Rights to purchase more
than 200,000 Shares.

                          (ii) The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.

                          (iii) If an Option or Stock Purchase Right is canceled
in the same fiscal year of the Company in which it was granted (other than in
connection with a transaction described in Section 12), the canceled Option or
Stock Purchase Right shall be counted against the limit set forth in Section
5(d)(i). For this purpose, if the exercise price of an Option or Stock Purchase
Right is reduced, such reduction will be treated as a cancellation of the Option
or Stock Purchase Right and the grant of a new Option or Stock Purchase Right.

        6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the stockholders of the
Company, as described in Section 18 of the Plan. The Plan shall continue in
effect for a term of ten (10) years unless sooner terminated pursuant to Section
14 thereof.

        7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant or such shorter term as may be provided in the
Option Agreement. In the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any

                                      -6-
<PAGE>   7
Parent or Subsidiary, the term of the Option shall be five (5) years from the
date of grant thereof or such shorter term as may be provided in the Option
Agreement.

        8. Option Exercise Price and Consideration.

               (a) The per Share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrator,
but shall be subject to the following:

                          (i) In the case of an Incentive Stock Option

                              (1) granted to an Employee who, at the time of
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the per Share exercise price shall be no less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of grant.

                              (2) granted to any other Employee, the per Share
exercise price shall be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.

                          (ii) In the case of a Nonstatutory Stock Option

                              (1) granted to a person who, at the time of grant
of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the per Share exercise price shall be no less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of the grant.

                              (2) granted to any other person, the per Share
exercise price shall be no less than eighty-five percent (85%) of the Fair
Market Value per Share on the date of grant.

               (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) wire transfer, (4) promissory note, (5) other Shares which (x) in
the case of Shares acquired upon exercise of an Option, have been owned by the
Optionee for more than six months on the date of surrender, and (y) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which such Option shall be exercised, (6) delivery of a
properly executed exercise notice together with such other documentation as the
Administrator and a broker, if applicable, shall require to effect a 'cashless'
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price, or (7) any combination of the foregoing
methods of payment. In making its determination as to the type of consideration
to accept, the Administrator shall consider if acceptance of such consideration
may be reasonably expected to benefit the Company.

                                      -7-
<PAGE>   8
        9. Exercise of Option.

               (a) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan, but in no case at a rate of less than twenty percent (20%) per year
over five (5) years from the date the Option is granted. An Option may not be
exercised for a fraction of a Share.

                      An Option shall be deemed to be exercised when
written notice of such exercise (in such form as the Board approves, including
the form attached hereto as Exhibit A) has been given to the Company in
accordance with the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option is
exercised has been received by the Company. Full payment may, as authorized by
the Administrator, consist of any consideration and method of payment allowable
under Section 8(b) hereof. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote,
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Option. No adjustment shall be made for a dividend or other
right for which the record date is prior to the date the stock certificate is
issued, except as provided in Section 12 hereof.

                      Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and the Option, by the number of Shares as to which the
Option is exercised.

               (b) Termination of Employment or Consulting Relationship. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant (but not in the event of an Optionee's change of status from Employee
to Consultant (in which case an Employee's Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status) or from Consultant to
Employee), such Optionee may, but only within such period of time as is
determined by the Administrator, of at least thirty (30) days, with such
determination in the case of an Incentive Stock Option not exceeding three (3)
months after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that the Optionee was
entitled to exercise it at the date of such termination. To the extent that the
Optionee was not entitled to exercise the Option at the date of such
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate and the
Shares converted by such Option shall revert to the Plan.

               (c) Disability of Optionee. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of his or
her disability, the Optionee may, but only within twelve (12) months from the
date of such termination (and in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise the Option
to the extent otherwise entitled to exercise it at the date of such termination.
If such

                                      -8-
<PAGE>   9
disability is not a "disability" as such term is defined in Section 22(e)(3) of
the Code, in the case of an Incentive Stock Option such Incentive Stock Option
shall automatically cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option on the day three (3)
months and one (1) day following such termination. To the extent that the
Optionee was not entitled to exercise the Option at the date of termination, or
if the Optionee does not exercise such Option to the extent so entitled within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

               (d) Death of Optionee. In the event of the death of an Optionee,
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant) by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option on
the date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after the
Optionee's death, the Optionee's estate or a person who acquires the right to
exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

               (e) Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.

               (f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

        10. Non-Transferability of Stockholder Rights. Options and Stock
Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by
the Optionee.

        11. Stock Purchase Rights.

               (a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other Options or Stock Purchase
Rights granted under the Plan and/or cash awards made outside of the Plan. After
the Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid, and the time within
which such person must accept such offer, which shall in no event exceed ninety
(90) days from the date upon which the Administrator makes the determination to
grant the Stock Purchase Right. The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the Administrator.

                                      -9-
<PAGE>   10
               (b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. This repurchase option shall lapse at such rate as the
Administrator may determine, but in no case at a rate of less than twenty
percent (20%) per year over five years from the date of purchase.

               (c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

               (d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a stockholder
and shall be a stockholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.

        12. Adjustments Upon Changes in Capitalization or Merger.

               (a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per Share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Administrator, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Option or Stock Purchase
Right.

               (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to such proposed action. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an

                                      -10-
<PAGE>   11
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action. To the extent it has not been previously
exercised, the Option or Stock Purchase Right shall terminate immediately prior
to the consummation of such proposed action.

               (c) Merger. In the event of a merger of the Company with or into
another corporation, each outstanding Option or Stock Purchase Right may be
assumed or an equivalent option or right may be substituted by such successor
corporation or a parent or subsidiary of such successor corporation. If, in such
event, an Option or Stock Purchase Right is not assumed or substituted, the
Option or Stock Purchase Right shall terminate as of the date of the closing of
the merger. For the purposes of this paragraph, the Option or Stock Purchase
Right shall be considered assumed if, following the merger, the Option or Stock
Purchase Right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger, the consideration (whether stock, cash, or other securities or
property) received in the merger by holders of Common Stock for each Share held
on the effective date of the transaction (and if the holders are offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares). If such consideration received in the
merger is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger.

               (d) Shares Subject to Repurchase Option. Any Shares subject to a
repurchase option of the Company shall be exchanged for the consideration
(whether stock, cash, or other securities or property) received in the merger or
asset sale by the holders of Common Stock for each Share held on the effective
date of the transaction, as described in the preceding paragraph. If the
Optionee receives shares of stock of the successor corporation or a parent or
subsidiary of such successor corporation in exchange for Shares subject to a
repurchase option, and exchanged shares shall continue to be subject to the
repurchase option as provided in the Restricted Stock Purchase Agreement.

        13. Time of Granting Options and Stock Purchase Rights. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the
date of such grant.

        14. Amendment and Termination of the Plan.

               (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. Such consent must
be in writing and signed by the Optionee. In addition, to the extent necessary
and desirable to comply with Rule 16b-3 under the Exchange Act or with

                                      -11-
<PAGE>   12
Section 422 of the Code (or any other applicable law or regulation, including
the requirements of the NASD or an established stock exchange), the Company
shall obtain stockholder approval of any Plan amendment in such a manner and to
such a degree as required.

               (b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted, and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.

        15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

               As a condition to the exercise of an Option or Stock Purchase
Right, the Company may require the person exercising such Option or Stock
Purchase Right to represent and warrant at the time of any such exercise that
the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.

        16. Reservation of Shares. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

               The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

        17. Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Administrator shall approve from time to
time.

        18. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under federal and state securities laws and
the rules of any stock exchange upon which the Company's Common Stock is listed.

                                      -12-
<PAGE>   13
                               POET HOLDINGS, INC.

                                 1995 STOCK PLAN

                             STOCK OPTION AGREEMENT

        Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

I.      NOTICE OF STOCK OPTION GRANT

[Optionee's Name and Address]

        You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

        Grant Number                        _________________________

        Date of Grant                       _________________________

        Vesting Commencement Date           _________________________

        Exercise Price per Share            $________________________

        Total Number of Shares Granted      _________________________

        Total Exercise Price                $________________________

        Type of Option:             --      Incentive Stock Option

                                    --      Nonstatutory Stock Option

        Term/Expiration Date:               _________________________

Vesting Schedule:

        This Option may be exercised, in whole or in part, in accordance with
the following schedule:

        Twelve forty-eighths (12/48) of the Shares subject to the Option shall
vest on the last day of the twelfth month after the Vesting Commencement Date,
and one forty-eighth (1/48) of the Shares subject to the Option shall vest on
the last day of each month thereafter, so that all of the shares subject to the
Option will be fully vested on the date four (4) years from the date of grant;
provided,

<PAGE>   14
however, in each case that the Optionee's Continuous Status as an Employee or
Consultant has not terminated prior such date of vesting.

        Termination Period:

        This Option may be exercised for three (3) months after termination of
your employment or consulting relationship, or such longer period as may be
applicable upon death or disability of Optionee as provided in the Plan. In the
event of the Optionee's change in status from Employee to Consultant or
Consultant to Employee, this Option Agreement shall remain in effect. In no
event shall this Option be exercised later than the Term/Expiration Date as
provided above.

II.     AGREEMENT

        1. Grant of Option. POET Holdings, Inc., a Delaware corporation (the
"Company"), hereby grants to the Optionee named in the Notice of Grant (the
"Optionee"), an option (the "Option") to purchase the total number of shares of
Common Stock (the "Shares") set forth in the Notice of Grant, at the exercise
price per share set forth in the Notice of Grant (the "Exercise Price") subject
to the terms, definitions and provisions of the 1995 Stock Plan as amended and
restated from time to time (the "Plan") adopted by the Company, which is
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option
Agreement.

               If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").

        2. Exercise of Option.

               (a) Right to Exercise. This Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice of Grant
and with the applicable provisions of the Plan and this Option Agreement. In the
event of Optionee's death, disability or other termination of the employment or
consulting relationship, this Option shall be exercisable in accordance with the
applicable provisions of the Plan and this Option Agreement.

               (b) Method of Exercise. This Option shall be exercisable by
written notice (in such form as the Board approves, including the form attached
hereto as Exhibit A) which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised, and such
other representations and agreements as to the holder's investment intent with
respect to such shares of Common Stock as may be required by the Company
pursuant to the provisions of the Plan. Such written notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The written notice shall be accompanied by payment of
the Exercise Price. This Option shall be deemed to be exercised upon receipt by
the Company of such written notice accompanied by the Exercise Price.

                                      -2-
<PAGE>   15

               No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.

        3. Method of Payment. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:

               (a) cash;

               (b) check;

               (c) wire transfer;

               (d) promissory note;

               (e) surrender of other shares of Common Stock of the Company
which (A) in the case of Shares acquired pursuant to the exercise of a Company
option, have been owned by the Optionee for more than six (6) months on the date
of surrender, and (B) have a Fair Market Value on the date of surrender equal to
the Exercise Price of the Shares as to which the Option is being exercised; or

               (f) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan.

        4. Restrictions on Exercise. This Option may not be exercised until such
time as the Plan has been approved by the stockholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board.

        5. Termination of Relationship. In the event an Optionee's Continuous
Status as an Employee or Consultant terminates, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option during the Termination Period set out in the Notice of
Grant. To the extent that Optionee was not entitled to exercise this Option at
the date of such termination, or if Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.

        6. Disability of Optionee. Notwithstanding the provisions of Section 6
above, in the event of termination of an Optionee's consulting relationship or
Continuous Status as an Employee as a result of his or her disability, Optionee
may, but only within twelve (12) months from the date of such termination (and
in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise the Option to the extent otherwise
entitled to exercise it at

                                      -3-
<PAGE>   16
the date of such termination; provided, however, that if such disability is not
a "disability" as such term is defined in Section 22(e)(3) of the Code, in the
case of an Incentive Stock Option such Incentive Stock Option shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option on the day three (3) months and one (1) day following
such termination. To the extent that Optionee was not entitled to exercise the
Option at the date of termination, or if Optionee does not exercise such Option
to the extent so entitled within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

        7. Death of Optionee. In the event of termination of Optionee's
Continuous Status as an Employee or Consultant as a result of the death of
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the date of expiration
of the term of this Option as set forth in Section 10 below), by Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent the Optionee could exercise the Option at
the date of death.

        8. Repurchase Option. Unless the Administrator deter-mines other-wise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

        9. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

        10. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Options designated as Incentive Stock Options
and Options granted to stockholders who hold greater than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary shall apply to this Option.

        11. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal and state tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

               (a) Exercise of ISO. If this Option qualifies as an ISO, there
will be no regular federal income tax liability or state income tax liability
upon the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price

                                      -4-
<PAGE>   17
will be treated as an adjustment to the alternative minimum tax for federal tax
purposes and may subject the Optionee to the alternative minimum tax in the year
of exercise.

               (b) Exercise of ISO Following Disability. If the Optionee's
Continuous Status as an Employee or Consultant terminates as a result of
disability that is not total and permanent disability as defined in Section
22(e)(3) of the Code, to the extent permitted on the date of termination, the
Optionee must exercise an ISO within ninety (90) days of such termination for
the ISO to be qualified as an ISO.

        In the event that the Optionee ceases to be an Employee but remains a
Consultant, any Incentive Stock Option of the Optionee that remains unexercised
shall cease to qualify as an Incentive Stock Option and will be treated for tax
purposes as a Nonstatutory Stock Option on the date three (3) months and one (1)
day following such change of status.

               (c) Exercise of Nonstatutory Stock Option. There may be a regular
federal and state income tax liability upon the exercise of a Nonstatutory Stock
Option. The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Shares on the date of exercise over the Exercise Price. If
Optionee is an Employee or a former Employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

               (d) Disposition of Shares. In the case of an NSO, if Shares are
held for at least one year, any gain realized on disposition of the Shares will
be treated as long-term capital gain for federal and state income tax purposes.
In the case of an ISO, if Shares transferred pursuant to the Option are held for
at least one year after exercise and are disposed of at least two years after
the Date of Grant, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal and state income tax purposes. If
Shares purchased under an ISO are disposed of within such one-year period or
within two years after the Date of Grant, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the difference between the Exercise Price and the lesser of (1) the
Fair Market Value of the Shares on the date of exercise, or (2) the sale price
of the Shares.

               (e) Notice of Disqualifying Disposition of ISO Shares. If the
Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.

                                      -5-
<PAGE>   18
        12. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan, this Option Agreement, the Exercise Notice and, if
applicable, the Restricted Stock Purchase Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by Delaware law except for that
body of law pertaining to conflict of laws.

                                        POET HOLDINGS, INC.
                                        a Delaware corporation

                                        By:
                                            ------------------------------------

        OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE
WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S STOCK OPTION PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL
IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT
CAUSE. OPTIONS UNDER THE PLAN ARE GRANTED IN A DISCRETIONARY FASHION, AND THE
GRANT OF ONE OR MORE OPTIONS UNDER THE PLAN SHALL NOT GIVE RISE TO A RIGHT IN
ANY EMPLOYEE OR CONSULTANT TO RECEIVE ADDITIONAL OPTION GRANTS IN THE FUTURE.
FURTHER, THE BOARD RETAINS THE RIGHT, IN ITS SOLE DISCRETION, TO TERMINATE THE
PLAN FOR ANY REASON, OR NO REASON, AT ANY TIME.

                                      -6-
<PAGE>   19
        Optionee acknowledges receipt of a copy of the Plan and represents that
he is familiar with the terms and provisions thereof, and hereby accepts this
Option subject to all of the terms and provisions thereof. Optionee has reviewed
the Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.

Dated:
       -------------                        ------------------------------------
                                            Optionee

                                            Residence Address:

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

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

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

                                      -7-
<PAGE>   20
                                    EXHIBIT A

                                 1995 STOCK PLAN

                                 EXERCISE NOTICE

POET Holdings, Inc.
999 Baker Way
Suite 200
San Mateo, CA 94404

Attention:  Secretary

        1. Exercise of Option. Effective as of today, ____________________, the
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
_________ shares of Common Stock (the "Shares") of POET Holdings, Inc. (the
"Company") under and pursuant to the 1995 Stock Plan, as amended (the "Plan")
and the [ ] Incentive [ ] Nonstatutory Stock Option Agreement dated
____________________ (the "Option Agreement"). Optionee herewith delivers to the
Company the full purchase price for the Shares.

        2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.

        3. Rights as Stockholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 12 of the Plan.

               Optionee shall enjoy rights as a stockholder until such time as
Optionee disposes of the Shares or the Company and/or its assignee(s) exercises
the Right of First Refusal or Repurchase Option contained in this Exercise
Notice. Upon such exercise, Optionee shall have no further rights as a holder of
the Shares so purchased except the right to receive payment for the Shares so
purchased in accordance with the provisions of the Stock Purchase Agreement, and
Optionee shall forthwith cause the certificate(s) evidencing the Shares so
purchased to be surrendered to the Company for transfer or cancellation.

<PAGE>   21
        4. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

        5. Entire Agreement. The Plan, Notice of Grant/Option Agreement and
Stock Purchase Agreement are incorporated herein by reference. This Agreement,
the Plan, the Option Agreement, and, if applicable, the Restricted Stock
Purchase Agreement constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Purchaser with respect to the
subject matter hereof, and may not be modified adversely to the Purchaser's
interest except by means of a writing signed by the Company and Purchaser.

Submitted by:                              Accepted by:

OPTIONEE:                                  POET HOLDINGS, INC.

                                           By:
                                                --------------------------------
                                           Its:
                                                --------------------------------
----------------------------------------
               (Signature)

Address:                                   Address:

                                           999 Baker Way
----------------------------------------   Suite 200
                                           San Mateo, CA 94404
----------------------------------------

                                      -2-
<PAGE>   22
                                CONSENT OF SPOUSE

        I, ___________________________, spouse of ______________________, have
read and approve the foregoing Agreement. In consideration of granting of the
right to my spouse to purchase shares of POET Holdings, Inc., as set forth in
the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to
the exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws or
similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.

Dated:
      ------------

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

                                      -3-

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