Document:

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                                                                    EXHIBIT 10.2
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                                 LOAN AGREEMENT

        This LOAN AGREEMENT is entered into as of June 27, 2000 by and between
COMERICA BANK-CALIFORNIA ("Bank") and STANFORD MICRODEVICES, INC., a California
corporation ("Borrower").

                                    RECITALS

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

        B. This Agreement supersedes the Loan Agreement and Security Agreement
(Accounts and Inventory) dated February 17, 1999, as amended (the "Loan
Agreement").

                                    AGREEMENT

        For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as set forth below.

                                   ARTICLE 1.
                          DEFINITIONS AND CONSTRUCTION

        1.1. Definitions. All other terms contained in this Agreement which are
not specifically defined herein shall have the meanings provided in the UCC to
the extent the same are used herein. All references herein to the singular or
plural shall also mean the plural or the singular, respectively. As used herein,
the following terms shall have the following meanings:

                "Advance" means an Advance under the Revolving Facility.

                "Agreement" means this Loan Agreement, and all exhibits and
addendums attached hereto as all of the foregoing may be amended, supplemented,
or modified from time to time.

                "Bank Expenses" means all reasonable costs or expenses
(including reasonable attorneys' fees and expenses) incurred in connection with
enforcing or defending the Loan Documents (including fees and expenses of
appeal), whether or not suit is brought.

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

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                "Base Rate Advance" means any Advance when and to the extent
that the interest rate therefor is determined by a reference to the Base Rate.

                "Borrower's Books" means all of Borrower's books and records
including ledgers, records indicating, summarizing, or evidencing Borrower's
properties or assets or liabilities, all information relating to Borrower's
business operations or financial condition, and all computer programs, disc or
tape files, printouts, runs, or other computer prepared information, and the
equipment containing such information.

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

                "Closing Date" means the date of this Agreement.

                "Committed Line" means Ten Million and 00/100 Dollars
($10,000,000.00).

                "Default Rate" means the default rate of interest set forth in
Section 2.7.

                "EBITDA" means, for any period, the following, each calculated
for such period: (a) Net Income (without deduction of income and franchise
taxes); plus (b) interest expenses paid or accrued; plus (c) amortization and
depreciation deducted in determining Net Income.

                "Effective Tangible Net Worth" means net worth as determined in
accordance with GAAP consistently applied, increased by Subordinated Debt, if
any, increased by the redeemable value of the common stock of Borrower, and
decreased by the following: patents, licenses, goodwill, subscription lists,
organization expenses, trade receivables converted to notes, money due from
affiliates (including officers, directors, subsidiaries and commonly held
companies).

                "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 Article 8
hereof.

                "Funding Date" means the date that amounts are advanced by Bank
under the Revolving Facility.

                "GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America, applied on a
consistent basis over the time period in question as to classification of items
and amounts.

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                "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) obligations as lessee under capital leases; (d) current
liabilities in respect of unfunded vested benefits under plans covered by ERISA;
and (e) 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.

                "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.

                "LIBOR" means the rate per annum (rounded upward, if necessary,
to the nearest whole 1/8 of 1%) and determined pursuant to the following
formula:

                      LIBOR =            Base LIBOR
                               -------------------------------
                               100% - LIBOR Reserve Percentage

                        (a) "Base LIBOR" means the rate per annum determined by
Bank at which deposits for the relevant LIBOR Period would be offered to Bank in
the approximate amount of the relevant LIBOR Advance in the inter-bank LIBOR
market selected by Bank, upon request of Bank at 10:00 a.m. California time, on
the day that is the first day of such LIBOR Period.

                        (b) "LIBOR Reserve Percentage" means the reserve
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for "Eurocurrency Liabilities" (as defined in Regulation D of
the Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable LIBOR Period.

                        (c) "LIBOR Business Day" means a Business Day on which
dealings in Dollar deposits may be carried out in the interbank LIBOR market.

                        (d) "LIBOR Period" means a period commencing on a
Business Day, and continuing for, in every case, no greater than one hundred
eighty (180) days, as designated by Borrower, during which all or a portion of
the outstanding principal balance of the Advances bears interest determined in
relation to LIBOR, provided that: (i) if any LIBOR Period would end on a day
that is not a Business Day, then such LIBOR Period shall be extended to the next
succeeding Business Day; and (ii) no LIBOR Period shall extend beyond the
Termination Date.

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                "LIBOR Advance" means any Advance when and to the extent that
the interest rate therefor is determined by a reference to LIBOR.

                "Lien" means any mortgage, deed of trust, pledge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority, or other security agreement or
preferential arrangement, charge, or encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the UCC or comparable law of any jurisdiction to evidence any of the foregoing).

                "Loan Documents" means, collectively, this Agreement and any
other agreement or instrument entered into between Borrower and Bank or executed
by Borrower or any guarantors and delivered to Bank in connection with this
Agreement, all as amended from time to time including, without limitation, any
note or notes executed by Borrower.

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

                "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.

                "Permitted Indebtedness" means: (a) Indebtedness of Borrower in
favor of Bank arising under this Agreement or any other Loan Document; (b)
Indebtedness existing on the Closing Date and disclosed in the Schedule; (c) and
Indebtedness to trade creditors incurred in the ordinary course of business.

                "Permitted Investment" means: (a) Investments existing on the
Closing Date disclosed to Bank; (b) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or any
State thereof maturing within two (2) years from the date of acquisition
thereof, (c) commercial paper maturing no more than two (2) year from the date
of creation thereof and currently having the highest rating obtainable from
either Standard & Poor's Corporation or Moody's Investors Service, Inc., and (d)
certificates of deposit maturing no more than two (2) years from the date of
investment therein issued by Bank.

                "Permitted Liens" means the following: (a) any Liens existing on
the Closing Date and disclosed to Bank or arising under this Agreement or the
other Loan Documents; (b) Liens for taxes, fees, assessments or other
governmental charges or levies, either

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not delinquent or being contested in good faith by appropriate proceedings,
provided the same have no priority over any of Bank's security interests; (c)
Liens (i) upon or in any equipment acquired or held by Borrower or any of its
Subsidiaries to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition of such equipment,
or (ii) existing on such equipment at the time of its acquisition, provided that
the Lien is confined solely to the property so acquired and improvements
thereon, and the proceeds of such equipment; (d) Liens incurred in connection
with the extension, renewal or refinancing of the indebtedness secured by Liens
of the type described in clauses (a) through (c) above, provided that any
extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the indebtedness
being extended, renewed or refinanced does not increase.

                "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.

                "Reinvestment Rates" mean the per annum rates of interest equal
to one half percent (1/2%) above the rates of interest reasonably determined by
Bank to be in effect not more than seven (7) days prior to the Prepayment Date
in the secondary market for United States Treasury Obligations in amounts and
with maturities which correspond (as closely as possible) to the LIBOR Advance
being prepaid.

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

                "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).

                "Termination Date" means the earlier of (a) acceleration of the
Obligations for any reason under the terms of this Agreement; or (b) June 26,
2001.

                "UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of California.

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

        1.3. Incorporation by Reference. The foregoing recitals and the Loan
Documents are incorporated herein by this reference as though set forth in full
herein.

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                                   ARTICLE 2.

REVOLVING FACILITY

        2.1. Revolving Facility. Subject to and upon the terms and conditions of
this Agreement, Bank agrees to make Advances to Borrower under a revolving line
of credit (the "Revolving Facility") from time to time in amounts requested by
Borrower up to an aggregate outstanding principal amount equal to the Committed
Line. Subject to the terms and conditions of this Agreement, Borrower may borrow
and reborrow under this Section 2.1, provided that each LIBOR Advance shall be
in an amount not less than Five Hundred Thousand and 00/100 Dollars
($500,000.00). The Revolving Facility shall be unsecured.

        2.2. Facility Fee. Borrower shall pay to Bank a facility fee in an
amount equal to Five Thousand and 00/100 dollars ($5,000.00).

        2.3. Interest. Borrower shall pay interest to Bank on the outstanding
and unpaid principal balance of the Advances made under the Revolving Facility
at a rate per annum as follows:

                2.3.1. For a Base Rate Advance at a floating rate per annum
equal to the Base Rate minus one-half percent (0.5%); and

                2.3.2. For a LIBOR Advance at a fixed rate per annum equal to
LIBOR plus two and one quarter percent (2.25%).

        2.4. Payment of Interest on LIBOR Advances. Interest on each LIBOR
Advance shall be payable on the last day of the LIBOR Period applicable thereto.
Interest on such LIBOR Advance shall be computed on the basis of a three hundred
and sixty (360)-day year and shall be assessed for the actual number of days
elapsed from the first day of the LIBOR Period applicable thereto but not
including the last day thereof.

        2.5. Selection/Conversion of Interest Rate Options. At the time each
Advance is requested under this Agreement and/or Borrower wishes to select LIBOR
for all or a portion of the outstanding principal balance of the Advances, and
at the end of each LIBOR Period, Borrower shall give Bank notice specifying (a)
the interest rate option selected by Borrower; (b) the principal amount subject
thereto; and (c) if LIBOR is selected, the length of the applicable LIBOR
Period. Any such notice may be given by telephone so long as, with respect to
each LIBOR Advance selected by Borrower, (i) Bank receives written confirmation
from Borrower not later than three (3) LIBOR Business Days after such telephone
notice is given; and (ii) such notice is given to Bank prior to 10:00 a.m.,
California time, on the first day of the LIBOR Period. For each LIBOR Advance
requested hereunder, Bank will quote the applicable fixed LIBOR rate to Borrower
at approximately 10:00 a.m., California time, on the first day of the LIBOR
Period. If Borrower does not immediately accept the rate quoted by Bank, any
subsequent acceptance by Borrower shall be subject to a redetermination by Bank;
provided however, that if Borrower fails to accept any such quotation as given,
then the quoted rate shall expire and Bank shall have no obligation to permit a
LIBOR Advance to be selected on such day. If no specific designation of

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interest is made at the time any Advance is requested under this Agreement or at
the end of any LIBOR Period, Borrower shall be deemed to have selected a Base
Rate Advance for such advance or the principal amount to which such LIBOR Period
applied. At any time LIBOR is in effect, Borrower may, at the end of the
applicable LIBOR Period, convert to the Base Rate. At any time Base Rate is in
effect, Borrower may convert to the LIBOR Period designated by Borrower.

        2.6. Adjusted Rate. Any change in the interest rate resulting from a
change in the Base Rate shall be effective as of the opening of business on the
day on which such change in the Base Rate becomes effective.

        2.7. Default Rate. From and after the Termination Date, Advances under
the Revolving Facility shall bear interest at a rate equal to five percentage
points (5%) more than the interest rate that would have been applicable
hereunder. Anything herein to the contrary notwithstanding, interest at the
default rate shall be due and payable on demand but shall accrue from the
Termination Date until all Advances are paid in full.

        2.8. Repayment Terms.

                2.8.1. Interest Only. Interest only shall be due and payable on
the unpaid principal balance of an Advance, without claim, notice, presentment
or demand, in consecutive monthly installments on the first (1st) day of each
month commencing on the first (1st) day of the first (1st) full calendar month
following the Funding Date and continuing thereafter until the Obligations are
paid in full.

        2.9. Application of Payments. Each payment received by Bank shall be
credited as of its due date, without regard to its date of receipt by Bank,
first to interest accrued and unpaid as of such due date and the remainder to
principal, and interest shall cease upon the principal so credited. All interest
calculations shall be on a basis of a three hundred and sixty (360)-day year and
a thirty (30)-day month. Daily interest shall consist of the product of the
outstanding principal balance of the Revolving Facility times the annual
interest rate then in effect divided by 360, then multiplied by the number of
days for which the daily interest calculation is made. Interest paid for any
partial month shall be prorated based on a thirty (30)-day month and the actual
number of day elapsed. Interest shall be compounded monthly.

        2.10. Method of Payment. Borrower shall make each payment under this
Agreement when due in lawful money of the United States to the Bank at its
address set forth herein, or at such other location as directed by Bank in
writing, in immediately available funds. Borrower hereby authorizes the Bank, if
and to the extent payment is not made when due under this Agreement or under the
Note, to charge from time to time against any deposit account of Borrower with
Bank any amount so due. Whenever any payment to be made under this Agreement or
under the Note shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of the
payment of interest and the commitment fee, as the case may be, except, in the
case of a LIBOR Advance, if the result of such extension would

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be to extend such payment into another calendar month, such payment shall be
made on the immediately preceding Business Day.

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

        2.12. Overadvances. If, at any time or for any reason, the amount of
Obligations owed by Borrower to Bank is greater than the Committed Line,
Borrower shall immediately pay to Bank, in cash, the amount the Obligations
exceed the Committed Line.

        2.13. Termination of Revolving Facility. The Revolving Facility shall
terminate on the Termination Date, at which time all unpaid principal, all
unpaid and accrued interest, and all other amounts due under the Revolving
Facility shall be immediately due and payable.

        2.14. Statements. With respect to each Advance, Bank is hereby
authorized to note the date, principal amount, and interest rate applicable
thereto, and any payments made thereon, on its books and records (either
manually or by electronic entry), which notations shall be conclusive evidence
of the information noted in the absence of manifest error. A failure by Bank to
record any such information shall not impair the Borrower's liability to make
payment when due. Bank shall render to Borrower each month a statement setting
forth the balance in Borrower's loan account maintained by Bank for Borrower
pursuant to the provisions of this Agreement, including principal, interest,
fees, costs and expenses. Each such statement shall be subject to subsequent
adjustment by Bank but shall, absent manifest errors or omissions, be considered
correct and deemed accepted by Borrower and conclusively binding upon Borrower
as an account stated except to the extent that Bank receives a written notice
from Borrower of any specific exceptions of Borrower thereto within thirty (30)
days after the date such statement has been mailed by Bank. Until such time as
Bank shall have rendered to Borrower a written statement as provided above, the
balance in Borrower's loan account shall be presumptive evidence of the amounts
due and owing to Bank by Borrower.

        2.15. Hold Harmless and Indemnification. Borrower agrees to indemnify
Bank and to hold Bank harmless from, and to reimburse Bank on demand for, all
losses and expenses which Bank sustains or incurs as a result of (a) any payment
of a LIBOR Advance prior to the last day of the LIBOR Period for such LIBOR
Advance for any reason, including termination of

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this Agreement; (b) any termination of a LIBOR Period in accordance with this
Agreement; or (c) any failure by Borrower, for any reason, to borrow any portion
of a LIBOR Advance after having given notice to Bank that it had selected such
LIBOR Advance.

        2.16. Funding Losses. The indemnification and hold harmless provisions
set forth in Section 2.15 shall include, without limitation, all losses and
expenses arising from interest and fees that Bank pays to lenders of funds it
obtains in order to fund the loans to Borrower on the basis of LIBOR and all
losses incurred in liquidating or re-deploying deposits from which such funds
were obtained and loss of profit for the period after termination. A written
statement by Bank to Borrower of such losses and expenses shall be conclusive
and binding, absent manifest error, for all purposes. This obligation shall
survive the termination of this Agreement and the payment of the Obligations.

        2.17. Regulatory Developments Or Other Circumstances Relating To
Illegality or Impracticality of LIBOR. If any Regulatory Development or other
circumstance relating to the interbank Euro-dollar markets shall, at any time,
in Bank's reasonable determination, make it unlawful or impractical for Bank to
fund or maintain, during any LIBOR Period, to determine or charge interest rates
based upon LIBOR, Bank shall give notice of such circumstances to Borrower and:
(a) in the case of a LIBOR Period in progress, Borrower shall, if requested by
Bank, promptly pay any interest which had accrued prior to such request and the
date of such request shall be deemed to be the last day of the term of the LIBOR
Period; and (b) no LIBOR Period may be designated thereafter until Bank
determines that such would be practical.

        2.18. Additional Costs. Borrower shall pay to Bank from time to time,
upon Bank's request, such amounts as Bank determines are needed to compensate
Bank for any costs it incurred which are attributable to Bank resulting from
Regulatory Developments having made or maintained a LIBOR Advance or to Bank's
obligation to make a LIBOR Advance, or any reduction in any amount receivable by
Bank hereunder with respect to any LIBOR Advance or such receivable (being
herein called "Additional Costs"), resulting from any Regulatory Developments,
which (a) change the basis of taxation of any amounts payable to Bank hereunder
with respect to net income of Bank for any LIBOR Advance by the jurisdiction
where Bank is headquartered or the jurisdiction where Bank extends the LIBOR
Advance; (b) impose or modify any reserve, special deposit, or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, Bank (including any LIBOR Advance or any
deposits referred to in the definition of LIBOR); or (c) impose any other
condition affecting this Agreement (or any of such extension of credit or
liabilities). Bank shall notify Borrower of any event occurring after the date
hereof which entitles Bank to compensation pursuant to this Section as promptly
as practicable after it obtains knowledge thereof and determines to request such
compensation. Determinations by Bank for purposes of this paragraph, shall be
conclusive, provided that such determinations are made on a reasonable basis.

        2.19. Prepayment. Bank does not have to accept any prepayment of any
LIBOR Advance except as described below or as required under applicable law.
Borrower may prepay a Base Rate Advance at any time without paying any
Prepayment Amount, as defined below. Borrower may prepay a LIBOR Advance at any
time, as long as Bank is provided written notice

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of the prepayment at least five (5) Business Days prior to the date of
prepayment (the "Prepayment Date"). The notice of prepayment shall contain the
following information: (a) the Prepayment Date; and (b) the amount of principal
to be prepaid. On the Prepayment Date, Borrower shall pay to Bank, in addition
to the other amounts then due, the Prepayment Amount described below. Bank, in
its sole discretion, may accept any prepayment of principal even if not required
to do so under this Agreement and may deduct from the amount to be applied
against the LIBOR Advance the other amounts required as part of the Prepayment
Amount.

                2.19.1. The Prepaid Principal Amount (as defined below) will be
applied to the LIBOR Advance as Bank shall determine in its sole discretion.

                2.19.2. If Bank exercises its right to accelerate the payment of
the Obligations prior to maturity based upon an Event of Default, Borrower shall
pay to Bank, in addition to the other amounts then due, on the date specified by
Bank as the Prepayment Date, the Prepayment Amount.

                2.19.3. Bank's determination of the Prepayment Amount shall be
conclusive in the absence of obvious error or fraud. If requested in writing by
Borrower, Bank shall provide Borrower a written statement specifying the
Prepayment Amount.

                2.19.4. The following (the "Prepayment Amount") shall be due and
payable in full on the Prepayment Date: (a) if the face amount of the LIBOR
Advance exceeds Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00)
then the Prepayment Amount is the sum of: (i) the amount of the principal
balance of the LIBOR Advance which Borrower has elected to prepay or which Bank
has required Borrower to prepay because of acceleration, as the case may be (the
"Prepaid Principal Amount"); (ii) interest accruing on the Prepaid Principal
Amount up to, but not including, the Prepayment Date; (iii) Five Hundred and
00/100 Dollars ($500.00); plus (iv) the present value, discounted at the
Reinvestment Rates of the positive amount by which (x) the interest Bank would
have earned had the Prepaid Principal Amount not been paid prior to the end of
the LIBOR Period at the applicable interest rate exceeds (y) the interest Bank
would earn by reinvesting the Prepaid Principal Amount at the Reinvestment
Rates; or (b) if the principal amount of the LIBOR Advance being prepaid is
Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00) or less, then the
Prepayment Amount is the sum of: (i) the amount of the LIBOR Advance which
Borrower has elected to prepay or the LIBOR Advance which Bank has required
Borrower to prepay because of acceleration, as the case may be (the "Prepaid
Principal Amount"); (ii) interest accruing on the Prepaid Principal Amount up
to, but not including, the Prepayment Date; plus (iii) an amount equal to two
percent (2%) of the Prepaid Principal Amount.

        2.20. PREPAYMENT AMOUNT. BORROWER ACKNOWLEDGE(S) AND AGREE(S) THAT: (A)
THERE IS NO RIGHT TO PREPAY THE LIBOR ADVANCE IN WHOLE OR IN PART, WITHOUT
PAYING THE PREPAYMENT AMOUNT, EXCEPT AS OTHERWISE REQUIRED UNDER APPLICABLE LAW;
(B) BORROWER SHALL BE LIABLE FOR PAYMENT OF THE PREPAYMENT AMOUNT IF BANK
EXERCISES ITS RIGHT TO ACCELERATE PAYMENT OF THE OBLIGATIONS, INCLUDING WITHOUT

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LIMITATION, ACCELERATION UNDER A DUE-ON-SALE PROVISION; (C) BORROWER WAIVE(S)
ANY RIGHTS UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE, OR ANY SUCCESSOR
STATUTE; AND (D) BANK HAS MADE EACH LIBOR ADVANCE IN RELIANCE ON THESE
AGREEMENTS.

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Borrower's Intials

        2.21. Use of Proceeds. The proceeds of the Advances hereunder shall be
used by Borrower for working capital. Borrower will not, directly or indirectly,
use any part of such proceeds for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock, or for any purpose which violates,
or in inconsistent with, Regulation X of such Board of Governors.

        2.22. Out of Debt. Notwithstanding anything to the contrary in this
Agreement, Borrower agrees that for a period of thirty (30) consecutive days
during each of its fiscal years there shall be no Obligations outstanding under
this Agreement.

                                   ARTICLE 3.
                               CONDITIONS OF LOANS

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

                3.1.1. this Agreement and the documents referenced herein and/or
provided by Bank to Borrower and/or any other party for execution herewith, all
duly executed;

                3.1.2. a certificate of the secretary of Borrower with respect
to incumbency and corporate authorization for the execution and delivery of the
Loan Documents;

                3.1.3. Borrower's audited Fiscal Year 1999 Financial Statements
which financial statements shall show at least Eighteen Million and 00/100
Dollars ($18,000,000.00) in revenue and no more than Two Million Six Hundred
Thousand and 00/100 Dollars ($2,600,000.00) in net losses;

                3.1.4. the Preferred Stock Agreement with Summit Partners and
Needham Capital.

                3.1.5. payment by Borrower of Bank's attorneys' fees and costs
incurred in the preparation of the Loan Documents; and

<PAGE>   12
                3.1.6. such other and further documents, and completion of such
other and further matters, as Bank may reasonably deem necessary or appropriate.

                                   ARTICLE 4.
                         REPRESENTATIONS AND WARRANTIES

        Borrower represents and warrants as follows:

        4.1. Incorporation, Good Standing, and Due Qualification. Borrower is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation; has the corporate power and
authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged in; and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required.

        4.2. Corporate Power and Authority. The execution, delivery, and
performance by Borrower of the Loan Documents to which it is a party has been
duly authorized by all necessary corporate action and does not and will not (a)
require any consent or approval of the stockholders of such corporation; (b)
contravene Borrower's charter or bylaws; (c) violate any provision of any law,
rule, regulation (including, without limitation, Regulations U and X of the
Board of Governors of the federal Reserve System), order, writ, judgment,
injunction, decree, determination, or award presently in effect having
applicability to such corporation; (d) result in a breach of or constitute a
default under indenture or loan or credit agreement or any other agreement,
lease, or instrument to which Borrower is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien, upon or with respect to any of the properties now owned
or hereafter acquired by Borrower; and (f) cause Borrower to be in default under
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination, or award or any such indenture, agreement, lease, or instrument.

       4.3. Name; Location of Chief Executive Office. Borrower has not done
business under any name except Matrix Micro Assembly Corp. and that specified on
the signature page hereof. The chief executive office of Borrower is located at
the addresses indicated in Article hereof.

        4.4. Litigation. Except as set forth in Schedule 4.4, if any, there are
no actions or proceedings pending by or against Borrower before any court or
administrative agency in which an adverse decision could have a Material Adverse
Effect or a material adverse effect on Borrower. Borrower does not have
knowledge of any such pending or threatened actions or proceedings.

<PAGE>   13

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

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

        4.7. Regulatory Compliance. Borrower 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 incurring any liability
that could have a Material Adverse Effect. Borrower is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940. Borrower is not engaged principally, or
as one of the important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations G, T and U of the Board of Governors of the Federal Reserve System).
Borrower has complied with all the provisions of the Federal Fair Labor
Standards Act, and has not violated any statutes, laws, ordinances or rules
applicable to it, violation of which could have a Material Adverse Effect.

        4.8. Environmental Condition. None of Borrower's properties or assets
have ever been used by such parties or, to the best of such parties 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 such parties
knowledge, none of their 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 such parties; and such parties have not 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 such parties resulting in the releasing, or otherwise disposing
of hazardous waste or hazardous substances into the environment.

        4.9. Taxes. Borrower has filed or caused to be filed all tax returns
required to be filed, and has paid, or has made adequate provision for the
payment of, all taxes reflected therein.

        4.10. Government Consents. Borrower 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 respective business as currently conducted.

<PAGE>   14

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

                                   ARTICLE 5.
                              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
an Advance hereunder, Borrower shall do all of the following:

        5.1. Good Standing. Borrower shall maintain its corporate existence and
good standing in its jurisdiction of formation and maintain qualification in
each jurisdiction in which the failure to so qualify could have a Material
Adverse Effect. Borrower shall maintain, to the extent consistent with prudent
management of their respective businesses, in force all licenses, approvals and
agreements, the loss of which could have a Material Adverse Effect.

        5.2. Government Compliance. Borrower shall comply with all statutes,
laws, ordinances and government rules and regulations to which it is subject,
noncompliance with which could have a Material Adverse Effect.

        5.3. Financial Statements. Borrower shall deliver to Bank:

                5.3.1. Monthly Financial Statements. If the unpaid balance of
the Revolving Facility is greater than Zero and 00/100 Dollars ($0.00), then as
soon as available and in any event within forty five (45) days after the end of
each of month, its company prepared balance sheet as of the end of such month,
statements of income for the period commencing at the end of the previous fiscal
year and ending with the end of such month, and statements of changes in
financial position for the portion of the fiscal year ended with the last day of
such month, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the previous fiscal
year and all prepared in accordance with GAAP consistently applied and such
financial statements shall be certified by an officer of Borrower.

                5.3.2. Initial Public Offering. Subsequent to Borrower's initial
public offering, Borrower shall deliver to Bank:

                        5.3.2.1. Quarterly Reports. As soon as available and in
any event within forty-five (45) days after the end of each fiscal quarter,
Borrower shall deliver its Form 10-Q Quarterly Report filed pursuant to the
Securities Exchange Act of 1934, as amended from time to time, and any successor
statute, and the rules and regulations issued thereunder ("Exchange Act"), all
as the same may be in effect at the time.

<PAGE>   15

                        5.3.2.2. Annual Report. As soon as available and in any
event within ninety (90) days after the end of each fiscal year, Borrower shall
deliver its Form 10-K Annual Report filed pursuant to the Exchange Act.

        5.4. Monthly A/R and A/P Agings. If the unpaid balance of the Revolving
Facility is greater than Zero and 00/100 Dollars ($0.00), then within twenty
(20) days after the last day of each month, Borrower shall deliver to Bank an
aged listing of accounts receivable and accounts payable.

        5.5. Taxes. Borrower shall 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
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 each party has made such payments or deposits; provided
that Borrower need not make any payment if the amount or validity of such
payment is contested in good faith by appropriate proceedings and is reserved
against (to the extent required by GAAP) by Borrower.

        5.6. Insurance.

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

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

        5.7. Principal Depository. As a condition to the terms hereof,
including, without limitation, the interest rate charged herein, Borrower shall
maintain its principal depository and operating accounts with Bank.

<PAGE>   16

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

                                   ARTICLE 6.
                               FINANCIAL COVENANTS

        6.1. Leverage Ratio. Borrower shall maintain, on a quarterly basis, a
ratio of (a) Indebtedness, to (b) Effective Tangible Net Worth of less than
1.75:1.00.

        6.2. Quick Ratio. Borrower shall maintain a quick ratio of (a) the sum
of cash plus accounts receivable; divided by (b) the sum of current liabilities
plus amounts due officers/affiliates plus the aggregate amount of the
Obligations outstanding plus any deferred margin on inventory or deferred
revenue of any kind, all as determined in accordance with GAAP, of not less than
1.25:1.00.

        6.3. EBITDA. Borrower shall maintain EBITDA in an amount equal to at
least Five Hundred Thousand and 00/100 Dollars ($500,000.00), which calculation
shall be made on a rolling four (4) quarter basis to exclude special charges
(which includes non-employee stock compensation) and amortization of deferred
employee stock option compensation, provided however that for Borrower's fiscal
third (3rd) quarter for year 2000, EBITDA, not including special charges (which
includes non-employee stock compensation) and amortization of deferred employee
stock option compensation must be greater than Zero and 00/100 Dollars ($0.00).

        6.4. Tangible Effective Net Worth. Borrower shall maintain an Effective
Tangible Net Worth in an amount no less than Eight Million Seven Hundred Fifty
Thousand and 00/100 Dollars ($8,750,000.00), which amount shall be increased, on
a quarterly basis, by fifty percent (50%) of new equity raised and fifty percent
(50%) of Net Income.

        6.5. Capital Expenditures. Borrower shall notify Bank, and Borrower will
not make, without Bank's prior written approval, any expenditures for fixed or
capital assets if, after giving thereto, the aggregate of all such expenditures
made by the Borrower would exceed Two Million Five Hundred Thousand and 00/100
Dollars ($2,500,000.00) during any fiscal quarter of the Borrower.

                                   ARTICLE 7.
                               NEGATIVE COVENANTS
<PAGE>   17

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

        7.1. Dispositions. Sell, lease, assign, transfer, or otherwise dispose
of, any of its now owned of hereafter acquired assets (including, without
limitation, shares of stock), except: (a) inventory disposed of in the ordinary
course of business; or (b) the sale or other disposition of assets no longer
used or useful in the conduct of its business.

        7.2. Change in Business. 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. Borrower will not, without giving Bank thirty (30)
days' prior written notification to Bank, relocate its chief executive office.

        7.3. Mergers or Acquisitions. Wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or acquire all of substantially all
of the assets or the business of any Person.

        7.4. Indebtedness. Create, incur, assume or be or remain liable with
respect to any Indebtedness other than Permitted Indebtedness without Bank's
prior written consent.

        7.5. Encumbrances. Create, incur, assume or suffer to exist any Lien
with respect to any of its assets, or assign or otherwise convey any right to
receive income, including the sale of any accounts, except for Permitted Liens.

        7.6. Investments. Make, any loan or advance to any Person, or purchase
or otherwise acquire, any capital stock, assets, obligations, or other
securities of, make any capital contribution to, or otherwise invest in or
acquire any interest in any Person, or participate as a partner or joint venture
with any other Person, except Permitted Investments.

        7.7. Compliance. Become an "investment 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 Advance for such purpose. Fail
to meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur, fail to comply with the
Federal Fair Labor Standards Act or violate any law or regulation, which
violation could have a Material Adverse Effect, or permit any of its
Subsidiaries to do any of the foregoing.

                                   ARTICLE 8.

<PAGE>   18

                                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 the principal of, or any
interest on, any Advances when due and payable.

        8.2. Other Amounts Due Default. If Borrower fails to pay any portion of
any other Obligations not constituting principal or interest, including without
limitation Bank Expenses, within thirty (30) days of receipt by Borrower of an
invoice for such other Obligations.

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

        8.4. Material Adverse Change. If there occurs a material adverse change
in Borrower's business or financial condition, or if there is a material
impairment of the prospect of repayment of any portion of the Obligations.

        8.5. Attachment. If any material portion of Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) Business 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 (10)
Business 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 Advances will be required to be made during such cure
period).

<PAGE>   19

        8.6. Insolvency. If Borrower becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within ten (10) Business Days
(provided that no Advances will be made prior to the dismissal of such
Insolvency Proceeding).

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

        8.8. Judgments. If a judgment or judgments for the payment of money in
an amount, individually or in the aggregate, of at least Fifty Thousand Dollars
($50,000) shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of ten (10) Business Days (provided that no Advances will
be made prior to the satisfaction or stay of such judgment).

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

        8.10. Cross Default. An event of default under any Loan Document.

                                   ARTICLE 9.
                           BANK'S RIGHTS AND REMEDIES

        9.1. Rights and Remedies. Upon the occurrence and during the continuance
of an Event of Default, (other than a default under Section 8.6) 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:

                9.1.1. Bank may declare this Agreement and all of Bank's
obligations hereunder terminated;

                9.1.2. Bank may declare all Obligations to be immediately due
and payable, without presentment, demand, protest, or notice of any kind, all of
which are hereby expressly waived by Borrower;

                9.1.3. all Obligations shall accrue interest at the Default
Rate; and

                9.1.4. Bank may, immediately and without expiration of any
period of grace, enforce payment of all Obligations and exercise any and all
other remedies granted to it under the Loan Documents, at law, in equity, or
otherwise.

<PAGE>   20

        9.2. Upon the occurrence of an Event of Default arising under Section
8.6 hereof:

                9.2.1. all Bank's obligations hereunder shall automatically
terminate;

                9.2.2. all Obligations shall be immediately due and payable,
without presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived by Borrower;

                9.2.3. all Obligations shall accrue interest at the Default
Rate; and

                9.2.4. Bank may, immediately and without expiration of any
period of grace, enforce payment of all Obligations and exercise any and all
other remedies granted to it under the Loan Documents, at law, in equity, or
otherwise.

        9.3. Bank Expenses. If Borrower fails to pay any amounts or furnish any
required proof of payment due to third persons or entities, as required under
the terms of this Agreement, then Bank may do any or all of the following: (a)
make payment of the same or any part thereof; (b) set up such reserves under the
Revolving Facility as Bank deems necessary to protect Bank from the exposure
created by such failure; or (c) obtain and maintain insurance policies of the
type discussed in Section 5.6 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. 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.

                                   ARTICLE 10.
                                     NOTICES

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

               If to Borrower:   STANFORD MICRODEVICES, INC.
                                 726 Palomar Avenue

<PAGE>   21

                                 Sunnyvale, CA 94086
                                 FAX: (408) 739-0952

               If to Bank:       COMERICA BANK-CALIFORNIA
                                 333 West Santa Clara Street
                                 San Jose, CA 95113
                                 Attn: Tamara L. Gormsen
                                 Fax:: (408) 556-5224

        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.

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

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

                                   ARTICLE 12.

<PAGE>   22

                               GENERAL PROVISIONS

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

        12.2. Term. This Agreement shall become effective on the Closing Date
and, subject to Section 12.11, shall continue in full force and effect for a
term ending on the Termination Date. Notwithstanding the foregoing, Bank shall
have the right to terminate its obligation to make Advances under this Agreement
immediately and without notice upon the occurrence and during the continuance of
an Event of Default.

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

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

        12.5. Severability of Provisions. In the event any one or more of the
provisions contained in this Agreement is held to be invalid, illegal or
unenforceable in any respect, then such provision shall be ineffective only to
the extent of such prohibition or invalidity, and the validity, legality, and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

        12.6. Amendments. Neither this Agreement nor any provisions hereof may
be changed, waived, discharged or terminated, nor may any consent to the
departure from the terms hereof be given, orally (even if supported by new
consideration), but only by an instrument in writing signed by all parties to
this Agreement. Any waiver or consent so given shall be effective only in the
specific instance and for the specific purpose for which given.

<PAGE>   23

        12.7. Entire Agreement. This Agreement, together with the Loan Documents
embodies the entire agreement and understanding among and between the parties
hereto, and supersedes all prior or contemporaneous agreements and
understandings between said parties, verbal or written, express or implied,
relating to the subject matter hereof. No promises of any kind have been made by
Bank or any third party to induce Borrower to execute this Agreement. No course
of dealing, course of performance or trade usage, and no parol evidence of any
nature, shall be used to supplement or modify any terms of this Agreement.

        12.8. Waiver. No failure to exercise and no delay in exercising any
right, power, or remedy hereunder shall impair any right, power, or remedy which
Bank may have, nor shall any such delay be construed to be a waiver of any of
such rights, powers, or remedies, or any acquiescence in any breach or default
hereunder; nor shall any waiver by Bank of any breach or default by Borrower
hereunder be deemed a waiver of any default or breach subsequently occurring.
All rights and remedies granted to Bank hereunder shall remain in full force and
effect notwithstanding any single or partial exercise of, or any discontinuance
of action begun to enforce, any such right or remedy. The rights and remedies
specified herein are cumulative and not exclusive of each other or of any rights
or remedies which Bank would otherwise have. Any waiver, permit, consent or
approval by Bank of any breach or default hereunder must be in writing and shall
be effective only to the extent set forth in such writing and only as to that
specific instance.

        12.9. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if all
signatures were upon the same instrument. Delivery of an executed counterpart of
the signature page to this Agreement by telefacsimile shall be effective as
delivery of a manually executed counterpart of this Agreement, and any party
delivering such an executed counterpart of the signature page to this Agreement
by telefacsimile to any other party shall thereafter also promptly deliver a
manually executed counterpart of this Agreement to such other party; provided;
however, that the failure to deliver such manually executed counterpart shall
not affect the validity, enforceability, or binding effect of this Agreement.

        12.10. Interpretation. This Agreement and all agreements relating to the
subject matter hereof are the product of negotiation and preparation by and
among each party and its respective attorneys, and shall be construed
accordingly. The parties waive the provisions of California Civil Code Section
1654.

        12.11. 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 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 set forth in the first sentence of this Section 12.11 have been
satisfied, and Bank has no commitment to make any Advances 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.

<PAGE>   24

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

                                            STANFORD MICRODEVICES, INC.

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

                                            Title:
                                                  ------------------------------

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

                                            Title:
                                                  ------------------------------

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

                                            Title:
                                                  ------------------------------

                                            COMERICA BANK-CALIFORNIA

                                            ------------------------------------
                                            Tamara Gormsen
                                            Corporate Banking Officer<PAGE>   1
                                                                     Exhibit 4.3

                       AVISTAR COMMUNICATIONS CORPORATION

                        2000 EMPLOYEE STOCK PURCHASE PLAN
                      (As amended effective August 3, 2000)

        The following constitute the provisions of the 2000 Employee Stock
Purchase Plan of Avistar Communications Corporation.

        1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

        2. Definitions.

               (a) "Board" shall mean the Board of Directors of the Company or
any committee thereof designated by the Board of Directors of the Company in
accordance with Section 14 of the Plan.

               (b) "Code" shall mean the Internal Revenue Code of 1986, as
                   amended.

               (c) "Common Stock" shall mean the common stock of the Company.

               (d) "Company" shall mean Avistar Communications Corporation and
                   any Designated Subsidiary of the Company.

               (e) "Compensation" shall mean all cash compensation reportable on
Form W-2, including without limitation base straight time gross earnings, sales
commissions, payments for overtime, shift premiums, incentive compensation,
incentive payments and bonuses, plus any amounts contributed by the Employee to
the Company's 401(k) Plan from compensation paid to the Employee by the Company.

               (f) "Designated Subsidiary" shall mean any Subsidiary that has
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

               (g) "Employee" shall mean any individual who is an Employee of
the Company for tax purposes whose customary employment with the Company is at
least twenty (20) hours per week and more than five (5) months in any calendar
year. For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.
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               (h) "Enrollment Date" shall mean the first Trading Day of each
                   Offering Period.

               (i) "Exercise Date" shall mean the last Trading Day of each
                   Purchase Period.

               (j) "Fair Market Value" shall mean, 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 or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
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 date of determination, as reported in
The Wall Street Journal or such other source as the Board deems reliable;

                          (ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock prior to the date of determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable;

                          (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 Board; or

                          (iv) For purposes of the Enrollment Date of the first
Offering Period under the Plan, the Fair Market Value shall be the initial price
to the public as set forth in the final prospectus included within the
registration statement in Form S-1 filed with the Securities and Exchange
Commission for the initial public offering of the Company's Common Stock (the
"Registration Statement").

               (k) "Offering Periods" shall mean the periods of approximately
twenty-four (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after February 1 and
August 1 of each year and terminating on the last Trading Day in the periods
ending twenty-four months later; provided, however, that the first Offering
Period under the Plan shall commence with the date on which the Securities and
Exchange Commission declares the Company's Registration Statement effective and
ending on the last Trading Day on or before July 31, 2002. The duration and
timing of Offering Periods may be changed pursuant to Section 4 of this Plan.

               (l) "Plan" shall mean this 2000 Employee Stock Purchase Plan.

               (m) "Purchase Period" shall mean the approximately six month
period commencing after one Exercise Date and ending with the next Exercise
Date, except that the first Purchase Period of any Offering Period shall
commence on the Enrollment Date and end with the next Exercise Date; and
provided further that the first purchase period for the offering period ending
July 31, 2002 shall commence on the date the Securities and Exchange Commission
declares the Company's Registration Statement effective and the Exercise Date
shall be January 31, 2001.

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               (n) "Purchase Price" shall mean 85% of the Fair Market Value of a
share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower; provided however, that the Purchase Price may be adjusted by the Board
pursuant to Section 20.

               (o) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

               (p) "Subsidiary" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

               (q) "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.

        3. Eligibility.

               (a) Any Employee (as defined in Section 2(g)) who shall be
employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan.

               (b) Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.

        4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after February 1 and August 1 each year, or on such other date
as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and ending on the last Trading Day on or before
July 31, 2002. The Board shall have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to future
offerings without stockholder approval if such change is announced at least five
(5) days prior to the scheduled beginning of the first Offering Period to be
affected thereafter.

        5. Participation.

        An eligible Employee may become a participant in the Plan by completing
a subscription agreement authorizing payroll deductions in the form of Exhibit A
to this Plan and filing it with the

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<PAGE>   4
Company's payroll office prior to the applicable Enrollment Date. All eligible
Employees shall be automatically enrolled in the initial Offering Period under
the Plan.

               (a) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

        6. Payroll Deductions.

        At the time a participant files his or her subscription agreement, he or
she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount not exceeding fifteen percent (15%) of the
Compensation which he or she receives on each pay day during the Offering
Period. During the initial Purchase Period, no payroll deduction will be made
unless a participant files a supplemental enrollment form within 15 days after
written notice to participants of the effectiveness of a registration statement
covering the Common Stock and filed under the Securities Act of 1933, as
amended.

        All payroll deductions made for a participant shall be credited to his
or her account under the Plan and shall be withheld in whole percentages only. A
participant may not make any additional payments into such account; provided,
however, that in the initial Purchase Period, participants may also purchase
shares of Stock by making a lump sum cash payment at the end of the Purchase
Period.

               (a) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or filing
with the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period, including allowing such
changes only at the beginning of each Purchase Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.

               (b) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of the
first Purchase Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.

               (c) At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the

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<PAGE>   5
amount necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Common Stock
by the Employee.

        7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than a
number of shares determined by dividing $12,500 by the Fair Market Value of a
share of the Company's Common Stock (subject to any adjustment pursuant to
Section 19) on the Enrollment Date, and provided further that such purchase
shall be subject to the limitations set forth in Sections 3(b) and 12 hereof.
The Board may, for future Offering Periods, increase or decrease, in its
absolute discretion, the maximum number of shares of the Company's Common Stock
an Employee may purchase during each Purchase Period of such Offering Period.
Exercise of the option shall occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof. The option shall expire
on the last day of the Offering Period.

        8. Exercise of Option.

               (a) Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.

               (b) If the Board determines that, on a given Exercise Date, the
number of shares with respect to which options are to be exercised may exceed
(i) the number of shares of Common Stock that were available for sale under the
Plan on the Enrollment Date of the applicable Offering Period, or (ii) the
number of shares available for sale under the Plan on such Exercise Date, the
Board may in its sole discretion (x) provide that the Company shall make a pro
rata allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect, or (y) provide
that the Company shall make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to

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<PAGE>   6
Section 20 hereof. The Company may make pro rata allocation of the shares
available on the Enrollment Date of any applicable Offering Period pursuant to
the preceding sentence, notwithstanding any authorization of additional shares
for issuance under the Plan by the Company's stockholders subsequent to such
Enrollment Date.

        9. Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.

        10. Withdrawal.

        A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of Exhibit B to this Plan; provided, however, that in the initial
Offering Period, participants may be deemed to withdraw from the Plan by
declining or failing to send timely payment for the shares. All of the
participant's payroll deductions credited to his or her account shall be paid to
such participant promptly after receipt of notice of withdrawal and such
participant's option for the Offering Period shall be automatically terminated,
and no further payroll deductions for the purchase of shares shall be made for
such Offering Period. If a participant withdraws from an Offering Period,
payroll deductions shall not resume at the beginning of the succeeding Offering
Period unless the participant delivers to the Company a new subscription
agreement.

               (a) A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the Company or in succeeding Offering Periods
which commence after the termination of the Offering Period from which the
participant withdraws.

        11. Termination of Employment.

               Upon a participant's ceasing to be an Employee, for any reason,
he or she shall be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account during the Offering
Period but not yet used to exercise the option shall be returned to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 15 hereof, and such participant's option shall be
automatically terminated. The preceding sentence notwithstanding, a participant
who receives payment in lieu of notice of termination of employment shall be
treated as continuing to be an Employee for the participant's customary number
of hours per week of employment during the period in which the participant is
subject to such payment in lieu of notice.

        12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.

        13. Stock.

               (a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be 7,500,000 shares together with an

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<PAGE>   7
annual increase to the number of shares reserved for issuance thereunder on the
first day of the Company's fiscal year beginning in January 1, 2001, equal to
the lesser of (i) 4,500,000 shares, (ii) 3.0% of the outstanding shares of the
Company on the last day of the prior fiscal year or (iii) such amount as
determined by the Board.

               (b) The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.

               (c) Shares to be delivered to a participant under the Plan shall
be registered in the name of the participant or in the name of the participant
and his or her spouse.

        14. Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

        15. Designation of Beneficiary.

               (a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.

               (b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

        16. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

        17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

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        18. Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

        19. Adjustments upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.

               (a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the Reserves, the maximum number of shares each
participant may purchase each Purchase Period (pursuant to Section 7), as well
as the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised 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 shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that 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 Board,
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.

               (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.

               (c) Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.

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        20. Amendment or Termination.

               (a) The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 19 hereof,
no such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Offering Period or the Plan
is in the best interests of the Company and its stockholders. Except as provided
in Section 19 and this Section 20 hereof, no amendment may make any change in
any option theretofore granted which adversely affects the rights of any
participant. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), the Company shall obtain stockholder approval in such a manner
and to such a degree as required.

               (b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.

               (c) In the event the Board determines that the ongoing operation
of the Plan may result in unfavorable financial accounting consequences, the
Board may, in its discretion and, to the extent necessary or desirable, modify
or amend the Plan to reduce or eliminate such accounting consequence including,
but not limited to:

                          (i) altering the Purchase Price for any Offering
Period including an Offering Period underway at the time of the change in
Purchase Price;

                          (ii) shortening any Offering Period so that Offering
Period ends on a new Exercise Date, including an Offering Period underway at the
time of the Board action; and

                          (iii) allocating shares.

               Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.

        21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

        22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant

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<PAGE>   10
thereto shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, 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, the Company may
require the person exercising such option 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 applicable provisions of law.

        23. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company; provided, however, the Plan shall not become
effective until the effective date of the Company's initial public offering
pursuant to a registration statement filed with the Securities and Exchange
Commission. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 20 hereof.

        24. Automatic Transfer to Low Price Offering Period. To the extent
permitted by any applicable laws, regulations, or stock exchange rules, if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.

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                                    EXHIBIT A

                       AVISTAR COMMUNICATIONS CORPORATION

                        2000 EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

_____ Original Application                         Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1.      ____________________ hereby elects to participate in the Avistar
        Communications Corporation Employee Stock Purchase Plan (the "Employee
        Stock Purchase Plan") and subscribes to purchase shares of the Company's
        Common Stock in accordance with this Subscription Agreement and the
        Employee Stock Purchase Plan.

2.      I hereby authorize payroll deductions from each paycheck in the amount
        of ____% of my Compensation on each payday during the Offering Period in
        accordance with the Employee Stock Purchase Plan. (Please note that the
        percentage withholding must be between 1% and 15% and that no fractional
        percentages are permitted.)

3.      I understand that said payroll deductions shall be accumulated for the
        purchase of shares of Common Stock at the applicable Purchase Price
        determined in accordance with the Employee Stock Purchase Plan. I
        understand that if I do not withdraw from an Offering Period, any
        accumulated payroll deductions will be used to automatically exercise my
        option.

4.      I have received a copy of the complete Employee Stock Purchase Plan. I
        understand that my participation in the Employee Stock Purchase Plan is
        in all respects subject to the terms of the Plan. I understand that my
        ability to exercise the option under this Subscription Agreement is
        subject to stockholder approval of the Employee Stock Purchase Plan.

5.      Shares purchased for me under the Employee Stock Purchase Plan should be
        issued in the name(s) of (Employee or Employee and Spouse only):
        _____________________________.

6.      I understand that if I dispose of any shares received by me pursuant to
        the Plan within 2 years after the Enrollment Date (the first day of the
        Offering Period during which I purchased such shares) or one year after
        the Exercise Date, I will be treated for federal income tax purposes as
        having received ordinary income at the time of such disposition in an
        amount equal to the excess of the fair market value of the shares at the
        time such shares were purchased by me over the price which I paid for
        the shares. I hereby agree to notify the Company in writing within 30
        days after the date of any disposition of my shares and I will make
        adequate provision for Federal, state or other tax withholding
        obligations, if any, which arise upon the
<PAGE>   12
        disposition of the Common Stock. The Company may, but will not be
        obligated to, withhold from my compensation the amount necessary to meet
        any applicable withholding obligation including any withholding
        necessary to make available to the Company any tax deductions or
        benefits attributable to sale or early disposition of Common Stock by
        me. If I dispose of such shares at any time after the expiration of the
        2-year and 1-year holding periods, I understand that I will be treated
        for federal income tax purposes as having received income only at the
        time of such disposition, and that such income will be taxed as ordinary
        income only to the extent of an amount equal to the lesser of (1) the
        excess of the fair market value of the shares at the time of such
        disposition over the purchase price which I paid for the shares, or (2)
        15% of the fair market value of the shares on the first day of the
        Offering Period. The remainder of the gain, if any, recognized on such
        disposition will be taxed as capital gain.

7.      I hereby agree to be bound by the terms of the Employee Stock Purchase
        Plan. The effectiveness of this Subscription Agreement is dependent upon
        my eligibility to participate in the Employee Stock Purchase Plan.

8.      In the event of my death, I hereby designate the following as my
        beneficiary(ies) to receive all payments and shares due me under the
        Employee Stock Purchase Plan:

        NAME: (Please print)____________________________________________________
                              (First)               (Middle)              (Last)

        _________________________      _________________________________________
        Relationship
                                       _________________________________________
                                       (Address)

        Employee's Social
        Security Number:               _________________________________________
        Employee's Address:            _________________________________________
                                       _________________________________________
                                       _________________________________________

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:_________________________        _________________________________________
                                       Signature of Employee

                                       _________________________________________
                                       Spouse's Signature (If beneficiary other
                                       than spouse)

                                      -2-
<PAGE>   13
                                    EXHIBIT B

                       AVISTAR COMMUNICATIONS CORPORATION

                        2000 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

        The undersigned participant in the Offering Period of the Avistar
Communications Corporation Employee Stock Purchase Plan which began on
____________, ______ (the "Enrollment Date") hereby notifies the Company that he
or she hereby withdraws from the Offering Period. He or she hereby directs the
Company to pay to the undersigned as promptly as practicable all the payroll
deductions credited to his or her account with respect to such Offering Period.
The undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.

                                       Name and Address of Participant:

                                       ________________________________________

                                       ________________________________________

                                       ________________________________________

                                       Signature:

                                       ________________________________________

                                       Date:___________________________________

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