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                                                                    EXHIBIT 10.2

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, OR ASSIGNED
UNLESS SO REGISTERED OR AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS IS AVAILABLE.

                                                                           No. 1

                              GATEFIELD CORPORATION

                         6.25% Convertible Note Due 2005

$1,000,000.00                                                Fremont, California
                                                                    May 31, 2000

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

         GateField Corporation, a Delaware corporation (the "Company"), for
value received, hereby promises to pay to Actel Corporation, or registered
assigns, the principal sum of One Million Dollars ($1,000,000), together with
interest (computed on the basis of a 360-day year) from the date hereof on
the unpaid balance of such principal amount from time to time outstanding at
the rate of 6.25% per annum. Interest shall accrue from the date of issuance
of this Note and shall be due and payable quarterly from the date of issuance
of this Note. All principal and any unpaid interest shall be due and payable
on May 26, 2005, or, if earlier, thirty (30) days following a Change in
Ownership of the Company, as defined below.

         Payment of this Note is secured by a security interest in certain
property of the Company pursuant to a security agreement of even date herewith
between the Company and Actel Corporation (the "Security Agreement").

1.       CONVERSION.

         (a)      DEFINITIONS.

                  (i) "BENEFICIAL OWNER" shall be used in this Agreement as
         defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
         amended.

                  (ii) "CHANGE IN OWNERSHIP" shall mean the occurrence of any
         one of the following:

                       (A) Any Person is or shall have the right to become the
                  Beneficial Owner, directly or indirectly, of Voting Securities
                  of such party representing 50% or more of the Total Voting
                  Power of such party's Voting Securities.

                       (B) The shareholders of a party approving a merger or
                  consolidation of such party with any other corporation, other
                  than a merger or consolidation that would result in the Voting
                  Securities of such party outstanding immediately prior thereto
                  continuing to represent (either by remaining outstanding or by
                  being converted into Voting Securities of the surviving
                  corporation) 50% or more of the Total Voting Power represented
                  by the Voting Securities of such party or such surviving
                  corporation outstanding immediately after such merger or
                  consolidation.

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                       (C) The shareholders of a party approving a plan of
                  dissolution or liquidation of such party or an agreement for
                  the sale or disposition by such party of all or substantially
                  all of such party's assets in one or a series of transactions.

                  (iii) "CONVERSION SECURITIES" shall mean Series C-2 Preferred
         Stock, each share of which shall be convertible, at the option of the
         holder, into 5.442176 shares of Common Stock.

                  (iv) "CONVERSION PRICE" shall mean $28.57142 per share of
         Conversion Securities.

                  (v) "PERSON" shall be used in this Agreement as defined under
         Sections 3(d) and 14(d) of the Securities Exchange Act of 1934, as
         amended.

                  (vi) "TOTAL VOTING POWER" shall mean the total number of votes
         that may be cast in the election of directors at a meeting of the
         shareholders of a corporation if all Voting Securities are present and
         voted to the fullest extent possible at such meeting.

                  (vii) "VOTING SECURITIES" shall mean all securities of a
         corporation entitled to vote generally in the election of directors.

         (b) OPTIONAL CONVERSION. The holder of this Note has the right, at its
option, at any time and from time to time to convert all or a portion of the
outstanding principal amount of this Note and unpaid interest thereon (the
amount to be converted, the "Conversion Amount") into fully-paid and
non-assessable shares of Conversion Securities. Upon conversion of this Note,
the holder of this Note shall be entitled to a number of shares of Conversion
Securities determined by dividing (A) the Conversion Amount by (B) the
Conversion Price. Nothing contained in this Note shall be construed as
conferring upon the holder of this Note any rights as a stockholder of the
Company prior to the conversion of the Note pursuant to this Section 1(b).

         (c) EXERCISE OF OPTIONAL CONVERSION. In order to exercise the optional
conversion privilege provided in Section 1(b) above, the holder of this Note
shall surrender this Note to the Company during usual business hours at the
Company's principal executive office, accompanied by written notice in form
reasonably satisfactory to the Company that the holder elects to convert the
principal amount of this Note or a portion hereof specified in such notice. Such
notice shall also state the name or names (with address) in which the
certificate or certificates for shares of capital stock that shall be issuable
on such conversion shall be issued.

         (d) SURRENDER OF NOTE AND DELIVERY OF CERTIFICATES. When surrendered
for optional conversion this Note shall, unless the shares issuable on
conversion are to be issued in the same name as the name in which this Note is
then registered, be duly endorsed by or accompanied by instruments of transfer
in form reasonably satisfactory to the Company duly executed by, the holder or
his or its duly authorized attorney. As promptly as practicable after the
surrender of this Note for conversion and the receipt of the notice specified
above, the Company shall deliver or cause to be delivered at its principal
executive office to the holder a certificate or certificates for the number of
full shares issuable upon the conversion of this Note, or portion hereof, in
accordance with the provisions hereof. Such conversion shall be deemed to have
been made at the time this Note shall have been surrendered for conversion and
the notice specified above shall have been received by the Company at its
principal executive office (the "Conversion Date"), and the holder in whose name
any certificate or certificates for shares of Convertible Securities shall be
issuable upon such conversion shall be deemed to have become on the Conversion
Date the holder of record of the shares represented thereby. If less than the
entire outstanding principal amount of this Note is being converted, a new Note
shall promptly be delivered to the holder for the unconverted principal balance
and shall be of like tenor as to all terms as the Note surrendered.

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         (e) FRACTIONAL SHARES. No fractional shares of Conversion Securities
shall be issuable upon conversion of this Note, but a payment in cash will be
made in respect of any fraction of a share which would otherwise be issuable
upon the surrender of this Note, or portion hereof, for conversion. Such payment
shall be based on the fair market value of the Conversion Securities at the time
of conversion of this Note, as determined in good faith by the Board of
Directors of the Company.

2.       ANTI-DILUTION PROVISIONS. Notwithstanding anything herein to the
contrary, no adjustment or readjustment of the Conversion Price or the number of
shares of Conversion Securities or other securities issuable upon conversion of
this Note shall be made under the provisions hereof due to any event described
below if an adjustment or readjustment is made pursuant to the Certificate of
Designation of the Conversion Securities in the Conversion Price (as defined in
such Certificate of Designation) due to such event.

         (a) STOCK SPLITS AND COMBINATIONS. If the Company shall at any time
subdivide the outstanding shares of Conversion Securities, the Conversion Price
then in effect immediately before that subdivision shall be proportionately
decreased, and, if the Company shall at any time combine the outstanding shares
of Conversion Securities, the Conversion Price then in effect immediately before
that combination shall be proportionately increased. Any adjustment under this
section shall become effective at the close of business on the date the
subdivision or combination becomes effective. A dividend on any security of the
Company payable in Conversion Securities of the Company shall be considered a
subdivision of Conversion Securities for purposes of this Section 2(a) at the
close of business on the record date for the determination of holders of any
security entitled to receive such dividend.

         (b) RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If the Conversion
Securities issuable on conversion of this Note shall be changed into the same or
a different number of shares of any other class or classes of stock, whether by
capital reorganization, reclassification, or otherwise (other than a subdivision
or combination of shares provided for above), the holder of this Note shall,
upon its conversion, be entitled to receive, in lieu of the Conversion
Securities which the holder would have become entitled to receive but for such
change, a number of shares of such other class or classes of stock that would
have been subject to receipt by the holder if it had exercised its right to
conversion of this Note immediately before that change.

         (c) REORGANIZATIONS, MERGERS OR SALE OF ASSETS. If at any time there
shall be a capital reorganization of the Conversion Securities (other than a
subdivision, combination, reclassification, or exchange of shares provided for
elsewhere in this Note) or merger of the Company with or into another
corporation (other than a merger upon which payment of this Note is due, unless
the holder hereof waives the right to receive such payment), or the sale of the
Company's properties and assets as, or substantially as, an entirety to any
other person (other than a sale upon which payment of this Note is due, unless
the holder hereof waives the right to receive such payment), then, as a part of
such reorganization, merger or sale, lawful provision shall be made so that the
holder of this Note shall thereafter be entitled to receive upon conversion of
this Note, during the period specified in this Note, and upon such conversion,
the number of shares of stock or other securities or property of the Company, or
of the successor corporation resulting from such merger, to which a holder of
the Conversion Securities deliverable upon conversion of this Note would have
been entitled on such capital reorganization, merger, or sale if this Note had
been converted immediately before that capital reorganization, merger, or sale.
In any such case, appropriate adjustment shall be made in the application of the
provisions of this Note with respect to the rights of the holder after the
reorganization, merger or sale to the end that the provisions of this Note
(including adjustment of the conversion price then in effect and number of
shares purchasable upon conversion of this Note) shall be applicable after that
event as nearly equivalent as may be practicable.

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         (d) NOTICE OF ADJUSTMENT. The Company shall promptly give written
notice of each adjustment or readjustment of the Conversion Price or the number
of shares of Conversion Securities or other securities issuable upon conversion
of this Note, by first class mail, postage prepaid, to the registered holder of
this Note at the holder's address as shown on the Company `s books. The notice
shall state that adjustment or readjustment and show in reasonable detail the
facts on which that adjustment or readjustment is based.

         (e) NO CHANGE NECESSARY. The form of this Note need not be changed
because of any adjustment in the Conversion Price or in the number of shares of
Conversion Securities issuable upon its conversion. A Note issued after any
adjustment on any partial conversion or upon replacement may continue to express
the same Conversion Price and the same number of shares of Conversion Securities
(appropriately reduced in the case of partial conversion) as are stated on this
Note as initially issued, and that Conversion Price and that number of shares
shall be considered to have been so changed as of the close of business on the
date of adjustment.

         (f) RESERVATION OF STOCK. The Company covenants that it will at all
times reserve and keep available, solely for issuance upon conversion of this
Note, all shares of its Conversion Securities or other securities from time to
time issuable upon conversion of this Note and if at any time the number of
authorized but unissued shares of Conversion Securities or other securities
shall not be sufficient to effect the conversion of this Note, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Conversion Securities or other
securities to such number of shares or other securities as shall be sufficient
for such purpose.

         (g) NO IMPAIRMENT. Without the consent of the holders of a majority in
interest of this Note, the Company will not avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 2 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of this Note against impairment.

         (h) NOTICES OF RECORD DATE. In the event of any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, the Company shall mail to the holder of this Note at least
ten (10) days prior to the date specified herein, a notice specifying the date
on which any such record is to be taken for the purpose of such dividend or
distribution.

         (i) NOTICE. In case the Company proposes to take any action to effect
the liquidation, dissolution or winding up of the Company, then the Company
shall cause notice thereof to be mailed to the registered holder of this Note at
least ten (10) days prior to the date when such liquidation, dissolution or
winding up shall be effective.

3.       PREPAYMENT OF PRINCIPAL.

         This Note may be prepaid, in whole or in part, upon not less than
thirty (30) days prior written notice to the holder of this Note.

4.       DEFAULT.

         (a) The entire unpaid principal of this Note and all unpaid interest
then accrued on this Note shall become and be immediately due and payable upon
written demand of the holder of this Note, without any other notice or demand of
any kind or any presentment or protest, and the holder shall have all of the
rights and remedies afforded by applicable law, if any one of the following
events (each, an

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"Event of Default") shall occur and be continuing at the time of such demand,
whether voluntarily or involuntarily, or, without limitation, occurring or
brought about by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
governmental body:

                  (i) If default shall be made in the payment of principal or
interest on this Note, and such default shall remain unremedied for thirty (30)
days; or

                  (ii) If the Company (A) makes a composition or an assignment
for the benefit of creditors or trust mortgage, (B) applies for, consents to,
acquiesces in, files a petition seeking or admits (by answer, default or
otherwise) the material allegations of a petition filed against it seeking the
appointment of a trustee, receiver or liquidator, in bankruptcy or otherwise, of
itself or of all or a substantial portion of its assets, or a reorganization,
arrangement with creditors or other remedy, relief or adjudication available to
or against a bankrupt, insolvent or debtor under any bankruptcy or insolvency
law or any law affecting the rights of creditors generally, or (C) admits in
writing its inability to pay its debts generally as they become due; or

                  (iii) If an order for relief shall have been entered by a
bankruptcy court or if a decree, order or judgment shall have been entered
adjudging the Company insolvent, or appointing a receiver, liquidator, custodian
or trustee, in bankruptcy or otherwise, for it or for all or a substantial
portion of its assets, or approving the winding-up or liquidation of its affairs
on the grounds of insolvency or nonpayment of debts, and such order for relief,
decree, order or judgment shall remain undischarged or unstayed for a period of
thirty (30) days; or if any substantial part of the property of the Company is
sequestered or attached and shall not be returned to the possession of the
Company or such subsidiary or released from such attachment within thirty (30)
days; or

                  (iv) The occurrence of any event of default under the Security
Agreement after giving effect to any grace or cure period provided for therein.

         (b) Every amount overdue under this Note shall bear interest from and
after the date on which such amount first became overdue at an annual rate that
is two (2) percentage points above the rate per year specified in the first
paragraph of this Note. Such interest on overdue amounts under this Note shall
be payable on demand and shall accrue and be compounded monthly until the
obligation of the Company with respect to the payment of such interest has been
discharged (whether before or after judgment).

5.       GENERAL.

         (a) SUCCESSORS AND ASSIGNS. This Note, and the obligations and rights
of the Company hereunder, shall be binding upon and inure to the benefit of the
Company, the holder of this Note, and their respective heirs, successors and
assigns; PROVIDED, HOWEVER, that neither the Company nor any holder of this Note
may sell, assign, or otherwise transfer this Note or any part hereof, except in
connection with a Change in Ownership of the Company or such holder, without the
prior written consent of a majority in interest of this Note or the Company,
respectively, which consent shall not be unreasonably withheld.

         (b) CHANGES. No change in or addition to this Note may be made or
compliance with any term, covenant, agreement, condition or provision set forth
herein may be omitted or waived (either generally or in a particular instance
and either retroactively or prospectively), without the written consent of the
Company and the holder of this Note.

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         (c) CURRENCY. All payments shall be made in such coin or currency of
the United States of America as at the time of payment shall be legal tender
therein for the payment of public and private debts.

         (d) SET-OFF. All payments by the Company under this Note shall be made
without set-off or counterclaim and be free and clear and without any deduction
or withholding for any taxes or fees of any nature whatsoever, unless the
obligation to make such deduction or withholding is imposed by law.

         (e) COSTS OF COLLECTION. The Company agrees to pay on demand all costs
of collection, including reasonable attorneys' fees, incurred by the holder in
enforcing the obligations of the Company under this Note.

         (f) WAIVERS. No delay or omission on the part of the Company or any
holder in exercising any right under this Note shall operate as a waiver of such
right or of any other right, nor shall any delay, omission or waiver on any one
occasion be deemed a bar to or waiver of the same or any other right on any
future occasion.

         (g) NOTICES. All notices, requests, consents and demands shall be made
in writing and shall be mailed postage prepaid, or delivered by hand, to the
Company or to the holder hereof at their respective addresses set forth below or
to such other address as may be furnished in writing to the other party hereto:

                  If to the holder:

                  Actel Corporation
                  955 East Arques Avenue
                  Sunnyvale, California  94086
                  Attn:  President

                  If to the Company:

                  GateField Corporation
                  47436 Fremont Boulevard
                  Fremont, California  94538
                  Attn:  President

         (h) SATURDAYS, SUNDAYS, HOLIDAYS. If any date that may at any time be
specified in this Note as a date for the making of any payment of principal or
interest under this Note shall fall on Saturday, Sunday or on a day which in
Fremont, California shall be a legal holiday, then the date for the making of
that payment shall be the next subsequent day which is not a Saturday, Sunday or
legal holiday.

         (i) ENTIRE AGREEMENT. This Note, together with the Security Agreement,
constitutes the entire agreement between the holder and the Company and
supersedes any prior understandings, agreements or representations by or between
the holder and the Company, written or oral, with respect to the subject matter
hereof.

         (j) GOVERNING LAW. This Note shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
internal laws (and not the law of conflicts) of the State of California.

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         IN WITNESS WHEREOF, this Note has been executed and delivered as a
sealed instrument on the date first above written by the duly authorized
representative of the Company.

                                           GATEFIELD CORPORATION

                                           By: /s/ Timothy Saxe
                                               -----------------------

                                           Name: Dr. Timothy Saxe
                                                 ---------------------

                                           Title: President & CEO
                                                  --------------------

[Corporate Seal]

ATTEST:
        ------------------------------
            Assistant Secretary

                                       7<PAGE>

                                                                    EXHIBIT 10.3

                               SECURITY AGREEMENT

         This SECURITY AGREEMENT, dated as of May 31, 2000, executed by
GATEFIELD CORPORATION, a Delaware corporation ("DEBTOR"), in favor of ACTEL
CORPORATION, a California corporation ("SECURED PARTY").

                                    RECITALS

         A. Debtor and Secured Party have entered into a Convertible Promissory
Note (the "NOTE"), dated the date hereof, in favor of Secured Party.

         B. In order to induce Secured Party to extend credit pursuant to the
Note, Debtor has agreed to enter into this Security Agreement and to grant the
security interest in the Collateral described below.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Debtor hereby agrees with Secured Party as follows:

         1. DEFINITIONS AND INTERPRETATION. When used in this Security
Agreement, the following terms shall have the following respective meanings:

         "ADDITIONAL LOAN ELECTION" shall mean the election by Debtor to request
that Secured Party, in its sole and absolute discretion, make an additional loan
in a principal amount requested by Debtor, not to exceed $3,000,000, on the same
terms as the Note (which loan shall be secured by the Collateral and may, at
Secured Party's option, be convertible into capital stock of Debtor on the same
terms as the Note, and if Secured Party elects that such loan be convertible,
Secured Party's obligation to make such loan shall be subject to the requirement
that there are a sufficient number of authorized and unissued shares of Debtor's
capital stock available for such conversion at the time such loan is to be
made). Debtor may only make an Additional Loan Election (a) following any
termination of the Merger Agreement other than by Secured Party pursuant to
Sections 7.2(b)(ii) or 7.2(c)(i) thereof and (b)(i) within ninety (90) days
following the expiration of Secured Party's right to exercise its Put Option (as
defined in the Merger Agreement), if applicable, or (ii) before the expiration
of and in lieu of Debtor's right to exercise its Call Option (as defined in the
Merger Agreement), if applicable, or (iii) within ninety (90) days following the
termination of the Merger Agreement if neither the Put Option nor the Call
Option are applicable.

         "COLLATERAL" shall have the meaning given to that term in Section 2
hereof.

         "EMBEDDED PRODUCTS" shall have the meaning given to that term in
Section 1.14 of that certain Product Marketing Agreement dated as of August 14,
1998 between Debtor and Secured Party.

         "INVENTORY" shall have the meaning given to that term in Attachment 1
hereto.

<PAGE>

         "LIEN" shall mean, with respect to the Collateral, any security
interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or
on the Collateral or the income therefrom, including, without limitation, the
interest of a vendor or lessor under a conditional sale agreement, capital lease
or other title retention agreement, or any agreement to provide any of the
foregoing, and the filing of any financing statement or similar instrument under
the Uniform Commercial Code or comparable law of any jurisdiction.

         "MERGER AGREEMENT" shall mean that certain Amended and Restated
Agreement and Plan of Merger dated as of May 24, 2000 between Debtor and Secured
Party, as the same may be amended from time to time.

         "OBLIGATIONS" shall mean and include all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by Debtor to Secured Party
of every kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), now existing or
hereafter arising under or pursuant to the terms of the Note, the Additional
Loan Election, or this Security Agreement, including, all interest, fees,
charges, expenses, reasonable attorneys' fees and costs chargeable to and
payable by Debtor hereunder and thereunder, in each case, whether direct or
indirect, absolute or contingent, due or to become due, and whether or not
arising after the commencement of a proceeding under Title 11 of the United
States Code (11 U.S.C. Section 101 ET SEQ.), as amended from time to time
(including post-petition interest) and whether or not allowed or allowable as a
claim in any such proceeding.

         "PERMITTED LIENS" shall mean (i) Liens for taxes or other governmental
charges not at the time delinquent or thereafter payable without penalty or
being contested in good faith, provided provision is made to the reasonable
satisfaction of Secured Party for the eventual payment thereof if subsequently
found payable; (ii) Liens of carriers, warehousemen, mechanics, materialmen,
vendors, and landlords incurred in the ordinary course of business for sums not
overdue or being contested in good faith, provided provision is made to the
reasonable satisfaction of Secured Party for the eventual payment thereof if
subsequently found payable; (iii) Liens existing as of the date hereof and
identified in item 9 of Attachment 2 to this Security Agreement; (iv) in the
event Debtor requests that Secured Party make an additional loan to Debtor
pursuant to an Additional Loan Election, but Secured Party elects not to make
such additional loan, Liens in favor of any third party lender(s) securing
indebtedness in an aggregate amount not to exceed the principal amount of
$3,000,000 at any time outstanding; (v) Liens in favor of Secured Party; (vi)
Liens on leased equipment granted in connection with the leasing of such
equipment in favor of the lessor of such equipment; (vii) Liens created by or
resulting from any litigation or legal proceeding which is currently being
contested in good faith by appropriate proceedings; and (viii) Liens created by
or resulting from purchase money financings.

         "RECEIVABLES" shall have the meaning given to that term in Attachment 1
hereto.

         "UCC" shall mean the Uniform Commercial Code as in effect in the State
of California from time to time.

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         All capitalized terms not otherwise defined herein shall have the
respective meanings given in the Note. Unless otherwise defined herein, all
terms defined in the UCC shall have the respective meanings given to those terms
in the UCC.

         2. GRANT OF SECURITY INTEREST. As security for the Obligations, Debtor
hereby pledges and assigns to Secured Party and grants to Secured Party a
security interest in all right, title and interest of Debtor in and to the
property described in Attachment 1 hereto (collectively and severally, the
"COLLATERAL"), which Attachment 1 is incorporated herein by this reference.

         3. REPRESENTATIONS AND WARRANTIES OF DEBTOR. Debtor represents and
warrants to Secured Party that (a) Debtor is the owner of the Collateral (or, in
the case of after-acquired Collateral, at the time Debtor acquires rights in the
Collateral, will be the owner thereof) and that no other person has (or, in the
case of after-acquired Collateral, at the time Debtor acquires rights therein,
will have) any right, title, claim or interest (by way of Lien or otherwise) in,
against or to the Collateral, except for Permitted Liens; (b) upon filing of a
UCC-1 financing statement, Secured Party has (or in the case of after-acquired
Collateral with respect to which a Security interest may be perfected in the
State of California by filing under Article 9 of the California Uniform
Commercial Code, at the time Debtor acquires rights therein, will have) a
perfected security interest in the Collateral, subject to no Liens other than
Permitted Liens, and additional filings have been made or will be made with the
United States Copyright Office and/or Patent Trademark Office as are necessary
to perfect the Secured Party's security interest in ownership rights and
interests of Debtor in all copyrights, patents, and trademarks constituting
Collateral; (c) all Inventory has been (or, in the case of hereafter produced
Inventory, will be) produced in compliance in all material respects with
applicable laws; (d) each Receivable represents a valid obligation of the
customers of Debtor arising from bona fide transactions entered into in the
ordinary course of business; and (e) all information set forth in Attachment 2
hereto is true and correct.

         4. REPRESENTATIVES AND WARRANTIES OF SECURED PARTY. Secured Party has
been advised that neither the Note nor the Convertible Securities issuable upon
conversion of the Note nor the Common Stock issuable upon conversion of the
Convertible Securities (collectively, the "Securities") have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws and, therefore, cannot be resold unless registered under
the Securities Act and applicable state securities laws or unless an exemption
from such registration requirements is available. Secured Party also understands
that the Securities are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon Secured Party's
representations contained herein. Secured Party is aware that Debtor is under no
obligation to effect any such registration with respect to the Securities or to
file for or comply with any exemption from registration. Secured Party also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Secured Party to transfer all or any portion of the
Securities under the circumstances, in the amounts or at the times Secured Party
might propose. Secured Party is purchasing the Securities for its own account
for investment, not as a nominee or agent, and not with a view to, or for resale
in connection with, the distribution thereof. Secured Party has such knowledge
and experience in financial and business matters that Secured Party is capable
of evaluating the merits and risks of such investment, is able to incur a
complete loss of such investment

                                      -3-
<PAGE>

and is able to bear the economic risk of such investment for an indefinite
period of time. Secured Party is an accredited investor as such term is defined
in Rule 501 of Regulation D under the Securities Act.

         5. COVENANTS RELATING TO COLLATERAL. Debtor hereby agrees (a) to
perform all acts that may be necessary to maintain, preserve, protect and
perfect the Collateral (ordinary wear and tear excepted), the Lien granted to
Secured Party therein and the first priority of such Lien, except for Permitted
Liens; (b) not to use or permit any Collateral to be used (i) in violation of
any provision herein, (ii) in any material violation of any applicable law, rule
or regulation, or (iii) in violation of any policy of insurance covering the
Collateral; (c) to pay when due all taxes and other governmental charges, all
Liens and all other charges now or hereafter imposed upon or affecting any
Collateral which, if unpaid, might become a Lien upon the Collateral or any part
thereof; (d) not to change Debtor's name without 15 days' prior written notice
to Secured Party, or Debtor's residence or the office in which Debtor's records
relating to Receivables are kept without 15 days prior written notice to Secured
Party; (e) not to keep Collateral consisting of Inventory at any location other
than the locations set forth in item 4 of Attachment 2 hereto, except that upon
at least 15 days prior written notice to Secured Party, Debtor may move
Collateral to other locations within the United States; (f) to procure, execute
and deliver from time to time any endorsements, assignments, financing
statements and other writings reasonably deemed necessary or appropriate by
Secured Party to perfect, maintain and protect its Lien hereunder and the
priority thereof; (g) to appear in and defend any action or proceeding which may
affect its title to or Secured Party's interest in the Collateral; (h) to comply
with all material requirements of law relating to the production, possession,
operation, maintenance and control of the Collateral except for such
non-compliance as could not reasonably be expected to have a material adverse
effect on the value of any such Collateral; (i) to keep accurate and complete
records of the Collateral and to provide Secured Party with such records and
information relating to the Collateral as Secured Party may reasonably request
from time to time; (j) not to surrender or lose possession of (other than to
Secured Party), sell or otherwise dispose of or transfer any Collateral or right
or interest therein, other than (i) the sale of Inventory and the disposal of
worn-out or obsolete equipment, all in the ordinary course of Debtor's business
and (ii) the granting of licenses in Embedded Products, and to keep the
Collateral free of all Liens except Permitted Liens; and (k) to collect, enforce
and receive delivery of the Receivables in accordance with past practice until
otherwise notified by Secured Party.

         6. SUBORDINATION. In the event that (a) Debtor has requested that
Secured Party make an additional loan to Debtor pursuant to an Additional Loan
Election, (b) Secured Party has elected not to make such additional loan (and
Secured Party shall deemed to have elected not to make such additional Loan to
Debtor unless Secured Party notifies Debtor of its election to make such
additional loan in writing no later than ten (10) days after Secured Party's
receipt of the Additional Loan Election); and (c) Debtor has obtained a loan
from a third party lender(s) in an aggregate principal amount not to exceed
$3,000,000, which loan is secured by a Lien described in clause (iv) of the
definition of "Permitted Lien," then Secured Party agrees to execute a
subordination agreement in favor of such third party lender(s), subordinating
the Lien in the Collateral provided for in this Security Agreement to such
Permitted Lien in favor of such third party lender(s), and which subordination
agreement shall contain such other terms and provisions as are reasonably
acceptable to Secured Party.

                                      -4-
<PAGE>

         7. AUTHORIZED ACTION BY AGENT. Debtor hereby irrevocably appoints
Secured Party as its attorney-in-fact and agrees that Secured Party may perform
(but Secured Party shall not be obligated to and shall incur no liability to
Debtor or any third party for failure so to do) any act which Debtor is
obligated by this Security Agreement to perform, and to exercise such rights and
powers as Debtor might exercise with respect to the Collateral, including the
right to (a) collect by legal proceedings or otherwise and endorse, receive and
receipt for all dividends, interest, payments, proceeds and other sums and
property now or hereafter payable on or on account of the Collateral; (b) enter
into any extension, reorganization, deposit, merger, consolidation or other
agreement pertaining to, or deposit, surrender, accept, hold or apply other
property in exchange for the Collateral; (c) insure, process and preserve the
Collateral; (d) make any compromise or settlement, and take any action it deems
advisable, with respect to the Collateral; (e) pay any indebtedness of Debtor
relating to the Collateral; and (f) execute UCC financing statements and other
documents, instruments and agreements required hereunder; PROVIDED, HOWEVER,
that Secured Party shall not exercise any such powers prior to the occurrence of
an Event of Default and shall only exercise such powers during the continuance
of an Event of Default. Debtor agrees to reimburse Secured Party upon demand for
any reasonable costs and expenses, including attorneys' fees, Secured Party may
incur while acting as Debtor's attorney-in-fact hereunder, all of which costs
and expenses are included in the Obligations. It is further agreed and
understood between the parties hereto that such care as Secured Party gives to
the safekeeping of its own property of like kind shall constitute reasonable
care of the Collateral when in Secured Party `s possession; PROVIDED, HOWEVER,
that Secured Party shall not be required to make any presentment, demand or
protest, or give any notice and need not take any action to preserve any rights
against any prior party or any other person in connection with the Obligations
or with respect to the Collateral.

         8. DEFAULT AND REMEDIES. Debtor shall be deemed in default under this
Security Agreement upon the occurrence of any of the following, each of which
shall be deemed an "Event of Default":

                  (a) If any Event of Default, under and as defined in the Note,
shall occur (giving effect to any grace or cure period provided for therein);

                  (b) If Debtor shall fail to perform any covenant to be
performed by it under this Security Agreement and such failure shall continue
unremedied or unwaived by Secured Party for a period of thirty (30) days;

                  (c) If this Security Agreement shall in any respect cease to
be, or Debtor shall assert that this Security Agreement or the Note is not, a
legal, valid and binding obligation of Debtor enforceable in accordance with its
terms.

         Upon the occurrence and during the continuance of any such Event of
Default, Secured Party shall have the rights of a secured creditor under the UCC
and applicable federal law, all rights granted by this Security Agreement and by
law, including the right to require Debtor to assemble the Collateral and make
it available to Secured Party at the location of such Collateral set forth in
item 4 of Attachment 2 and use any trademark, trade name, copyright, patent or
technical process used by Debtor in connection with any disposition of such
Collateral. Debtor hereby agrees that ten (10) days' notice of any intended sale
or disposition of any Collateral is reasonable. In furtherance of Secured
Party's rights

                                      -5-
<PAGE>

hereunder, Debtor hereby grants to Secured Party, an irrevocable, non-exclusive
license (exercisable without royalty or other payment by Secured Party, but only
in connection with the exercise of remedies hereunder) to use, license or
sublicense any patent, trademark, trade name, copyright or other intellectual
property in which Debtor now or hereafter has any right, title or interest
together with the right of access to all media in which any of the foregoing may
be recorded or stored.

         9. EMBEDDED PRODUCTS. Debtor and Secured Party hereby acknowledge and
agree that nothing contained herein shall prohibit or otherwise restrict Debtor
from licensing the Embedded Products to third parties and no such licensing
shall be deemed to be an Event of Default hereunder.

                                      -6-
<PAGE>

10.      MISCELLANEOUS.

         (a) NOTICES. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Debtor or Secured Party under this Security Agreement shall be by telecopy or in
writing and telecopied, mailed or delivered to each party at telecopier number
or its address set forth below (or to such other telecopy number or address as
the recipient of any notice shall have notified the other in writing). All such
notices and communications shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the business day following
the deposit with such service; (b) when mailed, by registered or certified mail,
first class postage prepaid and addressed as aforesaid through the United States
Postal Service, upon receipt; (c) when delivered by hand, upon delivery; and (d)
when telecopied, upon confirmation of receipt.

                           SECURED PARTY:

                           ACTEL CORPORATION
                           955 East Arques Avenue
                           Sunnyvale, California 94086
                           Attn: President
                           Telephone: 408-739-1010
                           Telecopy: 408-328-2341

                           DEBTOR:

                           GATEFIELD CORPORATION
                           47436 Fremont Boulevard
                           Fremont, California 94538
                           Attn: President
                           Telephone: 510-623-5647
                           Telecopy: 510-623-4484

         (b) NONWAIVER. No failure or delay on Secured Party's part in
exercising any right hereunder shall operate as a waiver thereof or of any other
right nor shall any single or partial exercise of any such right preclude any
other further exercise thereof or of any other right.

         (c) AMENDMENTS AND WAIVERS. This Security Agreement may not be amended
or modified, nor may any of its terms be waived, except by written instruments
signed by Debtor and Secured Party. Each waiver or consent under any provision
hereof shall be effective only in the specific instances for the purpose for
which given.

         (d) ASSIGNMENTS. This Security Agreement shall be binding upon and
inure to the benefit of Secured Party and Debtor and their respective successors
and assigns; PROVIDED, HOWEVER, that Debtor may not sell, assign or delegate
rights and obligations hereunder without the prior written consent

                                      -7-
<PAGE>

of Secured Party, and PROVIDED, FURTHER, that Secured Party may only sell,
assign or delegate its rights and obligations hereunder without the prior
written consent of Debtor to the extent permitted by the Note.

         (e) CUMULATIVE RIGHTS, ETC. The rights, powers and remedies of Secured
Party under this Security Agreement shall be in addition to all rights, powers
and remedies given to Secured Party by virtue of any applicable law, rule or
regulation of any governmental authority, all of which rights, powers, and
remedies shall be cumulative and may be exercised successively or concurrently
without impairing Secured Party's rights hereunder. Debtor waives any right to
require Secured Party to proceed against any person or to exhaust any Collateral
or to pursue any remedy in Secured Party's power.

         (f) PARTIAL INVALIDITY. If at any time any provision of this Security
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Security Agreement nor the legality, validity
or enforceability of such provision under the law of any other jurisdiction
shall in any way be affected or impaired thereby.

         (g) EXPENSES. Debtor shall pay on demand all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Secured
Party in connection with custody, preservation or sale of, or other realization
on, any of the Collateral or the enforcement or attempt to enforce any of the
Obligations which is not performed as and when required by this Security
Agreement.

         (h) GOVERNING LAW. This Security Agreement shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules (except to the extent governed by the UCC).

         (i) TERMINATION. This Security Agreement shall terminate upon the
conversion, repayment or performance in full of the Note.

                  [Remainder of page intentionally left blank]

                                      -8-
<PAGE>

         IN WITNESS WHEREOF, Debtor has caused this Security Agreement to be
executed as of the day and year first above written.

                                      GATEFIELD CORPORATION, A DELAWARE
                                      CORPORATION, as Debtor

                                     By:  /s/ Timothy Saxe
                                         ---------------------------------------
                                     Name: Timothy Saxe, Chief Executive Officer
                                           -------------------------------------

AGREED:

ACTEL CORPORATION, A CALIFORNIA CORPORATION,
as Secured Party

By:   Jonathan Schafer
      --------------------------
      Name:
      Title:

                                      -9-
<PAGE>

                                  ATTACHMENT 1
                              TO SECURITY AGREEMENT
                              ---------------------

         All right, title and interest of Debtor now owned or hereafter acquired
in and to the following:

                  (a) All equipment and fixtures (including, without limitation,
furniture, vehicles and other machinery and office equipment), together with all
additions and accessions thereto and replacements therefor;

                  (b) All inventory (including, without limitation, (i) raw
materials, work in process and finished goods and (ii) all such inventory which
are returned to or repossessed by Debtor), together with all additions and
accessions thereto, replacements therefor, products thereof and documents
therefor ("Inventory");

                  (c) All accounts, chattel paper, contract rights and rights to
the payment of money ("Receivables");

                  (d) All general intangibles, including, without limitation,
(i) customer and supplier lists and contracts, books and records, insurance
policies, tax refunds, contracts for the purchase of real or personal property;
(ii) all patents, copyrights, trademarks, trade names, service marks and other
intellectual property rights, (iii) all licenses to use, applications for, and
other rights to, such patents, copyrights, trademarks, trade names and service
marks, and (iv) all goodwill of Debtor;

                  (e) All deposit accounts, money, certificated securities,
uncertificated securities, instruments and documents; and

                  (f) All proceeds of the foregoing (including, without
limitation, whatever is receivable or received when Collateral or proceeds is
sold, collected, exchanged, returned, substituted or otherwise disposed of,
whether such disposition is voluntary or involuntary, including rights to
payment and return premiums and insurance proceeds under insurance with respect
to any Collateral, and all rights to payment with respect to any cause of action
affecting or relating to the Collateral).

                                      1-1

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