Document:

Amended and Restated 2000 Equity Incentive Plan

 Exhibit 10.1 
  
 PHARSIGHT CORPORATION 
  
 AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN 
  
 Adopted by Board of Directors April 7, 2000 
 Approved by Stockholders June 4, 2000 
 Amended by Board of Directors July 29, 2002 
 Approved by Stockholders September 6, 2002 
 Amended by Board of Directors June 13, 2003 
 Amended by Board of Directors July 17, 2003 
 Amended by Board of Directors April 22, 2004 
 Effective Date: Date of Initial Public Offering 
 Termination Date: April 7, 2010 
  

	1.	PURPOSES. 

  
 (a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the Employees, Directors and Consultants of the
Company and its Affiliates. 
  
 (b) Available Stock
Awards. The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards: (i)
Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock. The Plan also provides for non-discretionary grants of Nonstatutory Stock Options to Non-Employee Directors of the Company.

  
 (c) General Purpose. The Company, by means of
the Plan, seeks to retain the services of the group of persons eligible to receive Stock Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of
the Company and its Affiliates. 
  

	2.	DEFINITIONS. 

  
 (a) “Affiliate” means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing,
as those terms are defined in Sections 424(e) and (f), respectively, of the Code. 
  
 (b) “Board” means the Board of Directors of the Company. 
  
 (c) “Cause” means the occurrence of any one or more of the following: (i) the Participant’s conviction of any felony
or any crime involving moral turpitude or dishonesty which results in material harm to the business of the Company; (ii) the Participant’s participation in a fraud or act of dishonesty against the Company which results in material harm to the
business of the Company; or (iii) the Participant’s intentional, material violation of any material contract between the Company and the Participant or any statutory duty the Participant owes to the Company that the Participant does not correct
within thirty (30) days after written notice thereof has been provided to the Participant and which results in material harm to the business of the Company. 
  

 1. 

 (d) “Change in Control” means the occurrence of any one or more of the
following: 
  
 (i) a Corporate Transaction
after which persons who were not stockholders of the Company immediately prior to such Corporate Transaction own, directly or indirectly, immediately following such Corporate Transaction, fifty percent (50%) or more of the outstanding voting power
of each of (a) the continuing or surviving entity and (b) any direct or indirect parent corporation of the continuing or surviving entity; 
  
 (ii) after the IPO Date, an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange
Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or an Affiliate) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act, or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of Directors; provided that such acquisition does not occur in connection with,
in contemplation of or as a result of a Corporate Transaction; or 
  
 (iii) after the IPO Date, during any consecutive two (2) year period the individuals who, as of the start of such period, are members of the Board (the “Incumbent Board”), cease for any reason to
constitute at least fifty percent (50%) of the Board, provided that such change in the Incumbent Board does not occur in connection with, in contemplation of or as a result of a Corporate Transaction, and further provided that if the election, or
nomination for election, by the Company’s stockholders of any new Director was approved by a vote of at least fifty percent (50%) of the Incumbent Board, such new Director shall be considered as a member of the Incumbent Board. 
  
 (e) “Code” means the Internal Revenue Code of
1986, as amended. 
  
 (f)
“Committee” means a committee of one or more members of the Board appointed by the Board in accordance with subsection 3(c). 
  
 (g) “Common Stock” means the common stock of the Company. 
  
 (h) “Company” means Pharsight Corporation, a Delaware corporation. 
  
 (i) “Consultant” means any person, including
an advisor, (i) engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services or (ii) who is a member of the Board of Directors of an Affiliate. However, the term “Consultant”
shall not include either Directors who are not compensated by the Company for their services as Directors or Directors who are merely paid a director’s fee by the Company for their services as Directors. 
  
 (j) “Continuous Service” means that the
Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or
termination of the Participant’s 

  

 2. 

 
Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director will not constitute an
interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved
by that party, including sick leave, military leave or any other personal leave. 
  
 (k) “Corporate Transaction” means the occurrence of any one or more of the following: 
  
 (i) a sale, lease or other disposition of all or substantially all of the securities or assets of the Company; 
  
 (ii) a merger or consolidation following which the
Company is not the surviving corporation; 
  
 (iii) a reverse merger following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise; or 
  
 (iv) any other transaction described as a “corporate transaction” in Treasury Regulations §1.425-1(a)(1)(ii). 
  
 (l) “Covered Employee” means the chief executive officer and the four (4) other highest compensated officers of the Company
for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code. 
  
 (m) “Director” means a member of the Board of Directors of the Company. 
  
 (n) “Disability” means the inability of a
person, in the opinion of a qualified physician acceptable to the Company, to perform the major duties of that person’s position with the Company or an Affiliate because of the sickness or injury of the person and such inability results in
termination of employment by the Company or Affiliate. 
  
 (o)
“Eligible Director” means a Non-Employee Director or any other Director who is not an Employee or Consultant at the time of grant of an Nonstatutory Stock Option under section 7 hereof. 
  
 (p) “Employee” means any person employed by
the Company or an Affiliate. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate. 
  
 (q) “Exchange Act” means the Securities
Exchange Act of 1934, as amended. 
  

 3. 

 (r) “Fair Market Value” means, as of any date, the value of the Common
Stock determined as follows and in each case in a manner consistent with Section 260.140.50 of Title 10 of the California Code of Regulations: 
  
 (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market, the Nasdaq
SmallCap Market or the Over The Counter Bulletin Board system the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange, market or
system (or the exchange, market or system with the greatest volume of trading the Common Stock) on the last market trading day prior to determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.

  
 (ii) In the absence of an established
market or system for the Common Stock, the Fair Market Value shall be determined in good faith by the Board. 
  
 (s) “Good Reason” means that one or more of the following are undertaken by the Company without the Participant’s
express written consent: (i) the assignment to the Participant of any duties or responsibilities that results in a diminution in the Participant’s position or function as in effect immediately prior to the effective date of the Change in
Control; provided, however, that a mere change in the Participant’s title or reporting relationships shall not constitute Good Reason; (ii) a reduction by the Company in the Participant’s annual base salary, as in effect on the
effective date of the Change in Control; (iii) any failure by the Company to continue in effect any benefit plan or program, including incentive plans or plans with respect to the receipt of securities of the Company, in which the Participant was
participating immediately prior to the effective date of the Change in Control (hereinafter referred to as “Benefit Plans”), or the taking of any action by the Company that would adversely affect the Participant’s participation in or
reduce the Participant’s benefits under the Benefit Plans or deprive the Participant of any fringe benefit that the Participant enjoyed immediately prior to the effective date of the Change in Control; provided, however, that Good Reason
shall not be deemed to have occurred if the Company provides for the Participant’s participation in benefit plans and programs that, taken as a whole, are comparable to the Benefit Plans; (iv) a relocation of the Participant’s business
office to a location more than thirty (30) miles from the location at which the Participant performs duties as of the effective date of the Change in Control, except for required travel by the Participant on the Company’s business to an extent
substantially consistent with the Participant’s business travel obligations prior to the Change in Control; (v) a material breach by the Company of any provision of the Plan or the Stock Award Agreement or any other material agreement between
the Participant and the Company concerning the terms and conditions of the Participant’s employment; or (vi) any failure by the Company to obtain the assumption of the Plan and Stock Award Agreement by any successor or assign of the Company.

  
 (t) “Incentive Stock Option”
means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
  
 (u) “Independent Director” means each Director of the Company who is (i) not an Employee of the Company, (ii) is not acting
in the capacity of a Consultant to the Company, and (iii) cannot exercise, individually or in affiliation with any entity or group of entities that exercises, voting control over more than 20% of the Company’s voting stock. 
  

 4. 

 (v) “IPO Date” means the effective date of the Company’s Form S-1
Registration Statement filed under the Securities Act in connection with the initial public offering of the Common Stock. 
  
 (w) “Non-Employee Director” means a Director who either (i) is not a current Employee or Officer of the Company or its
parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which
disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction as to which disclosure would be required under Item
404(a) of Regulation S-K and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

  
 (x) “Non-Employee Director
Option” shall have the meaning subscribed in section 7 hereof. 
  
 (y) “Non-Employee Director Option Agreement” means a written agreement between the Company and an Eligible Director, evidencing the terms and conditions of a Non-Employee Director Option
grant. Each Non-Employee Director Option Agreement shall be subject to the terms and conditions of the Plan. 
  
 (z) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option. 
  
 (aa) “Officer” means a person who is an
officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
  
 (bb) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan. 
  
 (cc) “Option Agreement” means a written
agreement between the Company and an Optionholder evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 
  
 (dd) “Optionholder” means a person to whom an
Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option. 
  
 (ee) “Outside Director” means a Director who either (i) is not a current employee of the Company or an “affiliated
corporation” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” receiving compensation for prior services (other than
benefits under a tax qualified pension plan), was not an officer of the Company or an “affiliated corporation” at any time and is not currently receiving direct or indirect remuneration from the Company or an “affiliated
corporation” for services in any capacity other than as a Director or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code. 
  

 5. 

 (ff) “Participant” means a person to whom a Stock Award is granted
pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award. 
  
 (gg) “Plan” means this Pharsight Corporation Amended and Restated 2000 Equity Incentive Plan. 
  
 (hh) “Predecessor Plans” means the
Company’s 1995 Stock Option Plan and the 1997 Stock Option Plan. 
  
 (ii) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time. 
  
 (jj) “Securities Act” means the Securities Act of 1933, as amended. 
  
 (kk) “Stock Award” means any right granted
under the Plan, including an Option, a Non-Employee Director Option, a stock bonus and a right to acquire restricted stock. 
  
 (ll) “Stock Award Agreement” means a written agreement between the Company and a holder of a Stock Award evidencing the
terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 
  
 (mm) “Ten Percent Stockholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates. 
  

	3.	ADMINISTRATION. 

  
 (a) Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as
provided in subsection 3(c). 
  
 (b) Powers of
Board. The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: 
  
 (i) To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how each
Stock Award shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive Common
Stock pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person. 
  
 (ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations
for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective. 
  
 (iii) To amend the
Plan or a Stock Award as provided in Section 13. 
  

 6. 

 (iv) Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan. 
  
 (c) Delegation to Committee. 
  
 (i) General. The Board may delegate administration of the Plan to a Committee or Committees of one (1) or more members of
the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan,
the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee
or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration
of the Plan. 
  
 (ii) Committee
Composition when Common Stock is Publicly Traded. At such time as the Common Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the
Code, and/or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the Board or the Committee may (1) delegate to a committee of one or more members of the Board who are not Outside
Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Stock Award or (b) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code and/or) (2) delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to eligible persons who are
not then subject to Section 16 of the Exchange Act. 
  
 (d)
Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. 
  

	4.	SHARES SUBJECT TO THE PLAN. 

  
 (a) Share Reserve. Subject to the provisions of Section 12
relating to adjustments upon changes in stock and Section 4(d) below, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate four million four hundred twelve thousand seven hundred fifty seven (4,412,757)
shares of Common Stock (the “Reserved Shares”). As of each January 1, beginning with January 1, 2004 and continuing through and including January 1, 2010 (the “Anniversary Date”), the number of Reserved Shares will be increased
automatically by the least of (i) 5 % of the total number of share of Common Stock outstanding on such Anniversary Date, (ii) two million (2,000,000) shares, (iii) such fewer number of shares as determined by the Board prior to such Anniversary Date
or (iv) such fewer number of shares as permitted pursuant to Section 4(d) below. 
  

 7. 

 (b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason
expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan. 
  
 (c) Source of Shares. The shares of Common Stock subject to the
Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 
  
 (d) Reserve Limitation. Notwithstanding Section 4(a), if at the time of each grant of a Stock Award under the Plan, the Company is subject to Section 260.140.45 of Title 10 of the California Code of
Regulations (“Section 260.140.45”), the total number of securities issuable upon exercise of all outstanding options of the Company and the total number of shares provided for under this Plan or any other equity incentive, stock bonus or
similar plan or agreement of the Company or outside any such plan shall not exceed 30% of the then outstanding capital stock of the Company (as measured as set forth in Section 260.140.45), unless stockholder approval to exceed 30% has been obtained
in compliance with Section 260.140.45, in which case the limit shall be such higher percentage as approved by the stockholders. 
  

	5.	ELIGIBILITY. 

  
 (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to Employees. Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors (whether or not eligible for grants pursuant to Section 7 hereof) and Consultants. 
  
 (b) Ten Percent Stockholders. 
  
 (i) A Ten Percent Stockholder shall not be granted an Option unless the exercise price of such Option is at least one hundred ten
percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant. 
  
 (ii) So long as the Company is subject to Section 260.140.41 of Title 10 of the California Code of
Regulations, a Ten Percent Stockholder shall not be granted a restricted stock award unless the purchase price of the restricted stock is at least (A) one hundred percent (100%) of the Fair Market Value of the Common Stock on the date of grant or
(B) such lower percentage of the Fair Market Value of the Common Stock on the date of grant as is permitted by Section 260.140.41 of Title 10 of the California Code of Regulations at the time of the grant of the restricted stock award. 

 
 (c) Section 162(m) Limitation. Subject to the provisions of
Section 12 relating to adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted Options covering more than Five Hundred Thousand (500,000) shares of Common Stock during any calendar year. 
  

 8. 

 (d) Consultants. 
  
 (i) A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a
Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to register either the offer or the sale of the Company’s securities to such Consultant because of the nature of the services that the Consultant
is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by the rules governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be registered in another manner
under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not require registration under the Securities Act in order to comply with the requirements of the Securities Act, if applicable, and (ii) that such grant
complies with the securities laws of all other relevant jurisdictions. 
  
 (ii) Form S-8 generally is available to consultants and advisors only if (i) they are natural persons; (ii) they provide bona fide services to the issuer, its parents, its majority-owned subsidiaries or
majority-owned subsidiaries of the issuer’s parent; and (iii) the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the
issuer’s securities. 
  

	6.	OPTION PROVISIONS. 

  
 Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option.
The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: 
  
 (a) Term. Subject to the provisions of subsection 5(b)
regarding Ten Percent Stockholders, no Option shall be exercisable after the expiration of ten (10) years from the date it was granted. 
  
 (b) Exercise Price of an Incentive Stock Option. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, the
exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. 
  
 (c) Exercise Price of a Nonstatutory Stock Option. Subject to
the provisions of subsection 5(b) regarding Ten Percent Stockholders, the exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the Option on the
date the Option is granted. 
  
 (d) Consideration.
The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised or (ii) at the discretion of the Board at the
time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common Stock, (2) according to a deferred payment or other similar arrangement with the Optionholder or (3) in any
other form of legal consideration that may be 

  

 9. 

 
acceptable to the Board. Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired pursuant to an Option that is paid
by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of
time required to avoid a charge to earnings for financial accounting purposes). At any time that the Company is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the Delaware General Corporation Law,
shall not be made by deferred payment. 
  
 (e)
Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the
Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option. 
  
 (f) Transferability
of a Nonstatutory Stock Option. A Nonstatutory Stock Option shall be transferable to the extent provided in the Option Agreement; provided however, to the extent that the Company is subject to Section 260.140.41(d) of Title 10 of the California
Code of Regulations at the time of the grant of the Nonstatutory Stock Option, the Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. If the Nonstatutory Stock Option does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in
the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 
  
 (g) Vesting Generally. The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore become
exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this subsection 6(g) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.
Notwithstanding the foregoing, to the extent that the Company is subject to the following restrictions on vesting under Section 260.140.41(f) of Title 10 of the California Code of Regulations at the time of the grant of the Option, then options
granted to an Employee who is not an Officer, Director or Consultant on the date of grant shall provide for vesting of the total number of shares of Common Stock at a rate of at least twenty percent (20%) per year over five (5) years from the date
the Option was granted, subject to reasonable conditions such as continued employment. 
  
 (h) Termination of Continuous Service. In the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise his
or her Option (to the extent that the Optionholder was entitled to exercise such 

  

 10. 

 
Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of
the Optionholder’s Continuous Service (or such longer or shorter period specified in the Option Agreement, which period, for so long as the Company is subject to Section 260.140.41 of Title 10 of the California Code of Regulations, shall not be
less than thirty (30) days unless such termination is for Cause), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time
specified in the Option Agreement, the Option shall terminate. 
  
 (i) Extension of Termination Date. An Optionholder’s Option Agreement may also provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service (other than upon the
Optionholder’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of
(i) the expiration of the term of the Option set forth in subsection 6(a) or (ii) the expiration of a period of three (3) months after the termination of the Optionholder’s Continuous Service during which the exercise of the Option would not be
in violation of such registration requirements. 
  
 (j)
Disability of Optionholder. In the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was
entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option
Agreement, which period, for so long as the Company is subject to Section 260.140.41 of Title 10 of the California Code of Regulations, shall not be less than six (6) months) or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate. 
  
 (k) Death of Optionholder. In the event (i) an Optionholder’s Continuous Service terminates as a result of the Optionholder’s
death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon
the Optionholder’s death pursuant to subsection 6(e) or 6(f), but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement,
which period, for so long as the Company is subject to Section 260.140.41 of Title 10 of the California Code of Regulations, shall not be less than six (6) months) or (2) the expiration of the term of such Option as set forth in the Option
Agreement. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate. 
  
 (l) Early Exercise. The Option may, but need not, include a provision whereby the Optionholder may elect at any time before the
Optionholder’s Continuous Service terminates to 

  

 11. 

 
exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Subject to the
“Repurchase Limitation” in Section 11(g), any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. 
  
 (m) Re-Load Options. 
  
 (i) Without in any way limiting the authority of the
Board to make or not to make grants of Options hereunder, the Board shall have the authority (but not an obligation) to include as part of any Option Agreement a provision entitling the Optionholder to a further Option (a “Re-Load Option”)
in the event the Optionholder exercises the Option evidenced by the Option Agreement, in whole or in part, by surrendering other shares of Common Stock in accordance with this Plan and the terms and conditions of the Option Agreement. Unless
otherwise specifically provided in the Option, the Optionholder shall not surrender shares of Common Stock acquired, directly or indirectly from the Company, unless such shares have been held for more than six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting purposes). 
  
 (ii) Any such Re-Load Option shall (1) provide for a number of shares of Common Stock equal to the number of shares of Common Stock
surrendered as part or all of the exercise price of such Option; (2) have an expiration date which is the same as the expiration date of the Option the exercise of which gave rise to such Re-Load Option; and (3) have an exercise price which is equal
to one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Re-Load Option on the date of exercise of the original Option. Notwithstanding the foregoing, a Re-Load Option shall be subject to the same exercise price and
term provisions heretofore described for Options under the Plan. 
  
 (iii) Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option, as the Board may designate at the time of the grant of the original Option; provided, however, that the designation
of any Re-Load Option as an Incentive Stock Option shall be subject to the one hundred thousand dollar ($100,000) annual limitation on the exercisability of Incentive Stock Options described in subsection 11(d) and in Section 422(d) of the Code.
There shall be no Re-Load Options on a Re-Load Option. Any such Re-Load Option shall be subject to the availability of sufficient shares of Common Stock under subsection 4(a) and the “Section 162(m) Limitation” on the grants of Options
under subsection 5(c) and shall be subject to such other terms and conditions as the Board may determine which are not inconsistent with the express provisions of the Plan regarding the terms of Options. 
  

	7.	NON-EMPLOYEE DIRECTOR STOCK OPTIONS 

  
 Without any further action from the Board, Eligible Directors and
Independent Directors shall be granted Nonstatutory Stock Options in accordance with subsections 7(a) and 7(b) (collectively, the “Non-Employee Director Options”). Each Non-Employee Director Option shall include the substance of the terms
set forth in subsection 7(c) through 7(k) and such other terms and conditions as shall be determined by the Board as appropriate. 
  

 12. 

 (a) Initial Grants. After April 22, 2004, each Independent Director who is elected or
appointed to the Board, and each Director who was not previously an Independent Director who subsequently becomes an Independent Director, automatically shall be granted a Nonstatutory Stock Option to purchase One Hundred Thousand (100,000) shares
of Common Stock on the terms and conditions set forth herein (the “Initial Grant”) on the date such Independent Director is elected or appointed to the Board, or in the case of a Director who was not previously an Independent Director, on
the date such Director subsequently becomes an Independent Director. 
  
 (b) Annual Grants. On the day following each annual meeting of the stockholders of the Company (the “Annual Meeting”) commencing with the Annual Meeting in calendar year 2004, each person who is then an Eligible
Director automatically shall be granted a Nonstatutory Stock Option to purchase Ten Thousand (10,000) shares of Common Stock on the terms and conditions set forth herein (the “Annual Grant”). 
  
 (c) Term. Each Non-Employee Director Option shall have a term
of ten (10) years from the date it is granted. 
  
 (d)
Exercise Price. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the exercise price of each Non-Employee Director Option shall be one hundred percent (100%) of the Fair Market Value of the stock subject to the
Non-Employee Director Option on the date of grant. 
  
 (e)
Vesting. Non-Employee Director Options shall vest and become exercisable as follows: 
  
 (i) An Initial Grant shall vest in twenty-four (24) equal installments on each monthly anniversary of the date of the Initial
Grant; provided however, that the Director provides service to the Company through each such date; and provided further, that if a Change in Control occurs, then the vesting and exercisability of the Initial Grant shall be accelerated
in full. 
  
 (ii) An Annual Grant shall
vest in full on the day of the first anniversary of the Annual Meeting next following its date of grant; provided, however, that the Director provides service to the Company through each such date. 
  
 (f) Consideration. The purchase price of stock acquired
pursuant to a Non-Employee Director Option may be paid, to the extent permitted by applicable statutes and regulations, in any combination of (i) cash or check, (ii) delivery to the Company of other Common Stock owned by the Director for at least
six (6) months; (iii) deferred payment or (iv) any other form of legal consideration that may be acceptable to the Board and provided in the Non-Employee Director Option Agreement; provided, however, that at any time that the Company is incorporated
in Delaware, payment of the Common Stock’s “par value,” as defined in the Delaware Corporation Law, shall not be made by deferred payment. 
  
 (g) Transferability. A Non-Employee Director Option shall be transferable to the extent provided in the Non-Employee Director Option
Agreement; provided however, to the extent that the Company is subject to Section 260.140.41(d) of Title 10 of the California Code of Regulations at the time of the grant of the Non-Employee Director Option, the Eligible Director shall not be
transferable except by will or by the laws of descent and distribution and shall be 

  

 13. 

 
exercisable during the lifetime of the Eligible Director only by the Eligible Director. If the Non-Employee Director Option Agreement does not provide for
transferability, then the Non-Employee Director Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Eligible Director only by the Eligible Director.
Notwithstanding the foregoing, the Eligible Director may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Eligible Director, shall thereafter be
entitled to exercise the Non-Employee Director Option. 
  
 (h)
Termination of Continuous Service. In the event an Eligible Director’s Continuous Service terminates (other than upon the Eligible Director’s death or Disability), the Eligible Director may exercise his or her Non-Employee
Director Option (to the extent that the Eligible Director was entitled to exercise it as of the date of termination) but only within such period of time ending on the earlier of (i) the date six (6) months following the termination of the Eligible
Director’s Continuous Service, or (ii) the expiration of the term of the Non-Employee Director Option as set forth in the Non-Employee Director Option Agreement. If, after termination, the Eligible Director does not exercise his or her
Non-Employee Director Option within the time specified herein, the Non-Employee Director Option shall terminate. 
  
 (i) Extension of Termination Date. If the exercise of the Non-Employee Director Option following the termination of the Eligible
Director’s Continuous Service (other than upon the Eligible Director’s death or Disability) would be prohibited at any time solely because the issuance of shares would violate the registration requirements under the Securities Act, then
the Non-Employee Director Option shall terminate on the earlier of (i) the expiration of the term of the Non-Employee Director Option set forth in subsection 7(c) or (ii) the expiration of a period of three (3) months after the termination of the
Eligible Director’s Continuous Service during which the exercise of the Non-Employee Director Option would not violate such registration requirements. 
  
 (j) Disability of Eligible Director. In the event an Eligible Director’s Continuous Service terminates as a result of the Eligible
Director’s Disability, the Eligible Director may exercise his or her Non-Employee Director Option (to the extent that the Eligible Director was entitled to exercise it as of the date of termination), but only within such period of time ending
on the earlier of (i) the date twelve (12) months following such termination or (ii) the expiration of the term of the Non-Employee Director Option as set forth in the Non-Employee Director Option Agreement. If, after termination, the Eligible
Director does not exercise his or her Non-Employee Director Option within the time specified herein, the Non-Employee Director Option shall terminate. 
  
 (k) Death of Eligible Director. In the event (i) an Eligible Director’s Continuous Service terminates as a result of the Eligible
Director’s death or (ii) the Eligible Director dies within the six-month period after the termination of the Eligible Director’s Continuous Service for a reason other than death, then the Non-Employee Director Option may be exercised (to
the extent the Eligible Director was entitled to exercise the Non-Employee Director Option as of the date of death) by the Eligible Director’s estate, by a person who acquired the right to exercise the Non-Employee Director Option by bequest or
inheritance or by a person designated to exercise the Non-Employee Director Option upon the Eligible Director’s death, but only within the period 

  

 14. 

 
ending on the earlier of (1) the date eighteen (18) months following the date of death or (2) the expiration of the term of such Non-Employee Director Option
as set forth in the Non-Employee Director Option Agreement. If, after death, the Non-Employee Director Option is not exercised within the time specified herein, the Non-Employee Director Option shall terminate. 
  

	8.	PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

  
 (a) Stock Bonus Awards. Each
stock bonus agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock bonus agreements may change from time to time, and the terms and conditions of separate
stock bonus agreements need not be identical, but each stock bonus agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: 
  
 (i) Consideration. A stock bonus may be
awarded in consideration for past services actually rendered to the Company or an Affiliate for its benefit. 
  
 (ii) Vesting. Subject to the “Repurchase Limitation” in Section 11(g), shares of Common Stock awarded under the
stock bonus agreement may, but need not, be subject to a share reacquisition right in favor of the Company in accordance with a vesting schedule to be determined by the Board. 
  
 (iii) Termination of Participant’s Continuous Service. Subject to the “Repurchase
Limitation” in Section 11(g), in the event a Participant’s Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination under
the terms of the stock bonus agreement. 
  
 (iv) Transferability. Rights to acquire shares of Common Stock under a stock bonus agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the stock bonus agreement, as the
Board shall determine in its discretion, so long as Common Stock awarded under the stock bonus agreement remains subject to the terms of the stock bonus agreement; provided however, to the extent that the Company is subject to Section 260.140.41(d)
of Title 10 of the California Code of Regulations at the time of the award, such rights to acquire shares of Common Stock under a stock bonus agreement shall not be transferable except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Participant only by the Participant. 
  
 (b) Restricted Stock Purchase Awards. Each restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of the restricted stock purchase agreements may change from time to time, and the terms and conditions of separate restricted stock purchase agreements need not be identical, but each restricted stock purchase agreement shall include
(through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions: 
  
 (i) Purchase Price. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the purchase price under
each restricted stock purchase agreement shall be 

  

 15. 

 
such amount as the Board shall determine and designate in such restricted stock purchase agreement. The purchase price shall not be less than eighty-five
percent (85%) of the Common Stock’s Fair Market Value on the date such award is made or at the time the purchase is consummated. 
  
 (ii) Consideration. The purchase price of Common Stock acquired pursuant to the restricted stock purchase agreement shall be
paid either: (i) in cash at the time of purchase; (ii) at the discretion of the Board, according to a deferred payment or other similar arrangement with the Participant; or (iii) in any other form of legal consideration that may be acceptable to the
Board in its discretion; provided, however, that at any time that the Company is incorporated in Delaware, then payment of the Common Stock’s “par value,” as defined in the Delaware General Corporation Law, shall not be made by
deferred payment. 
  
 (iii)
Vesting. Subject to the “Repurchase Limitation” in Section 11(g), shares of Common Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a share repurchase option in favor of the Company
in accordance with a vesting schedule to be determined by the Board. 
  
 (iv) Termination of Participant’s Continuous Service. Subject to the “Repurchase Limitation” in Section 11(g), in the event a Participant’s Continuous Service terminates, the Company
may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination under the terms of the restricted stock purchase agreement. 
  
 (v) Transferability. Rights to acquire shares
of Common Stock under a restricted stock purchase agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the restricted stock purchase agreement, as the Board shall determine in its discretion, so
long as Common Stock awarded under the restricted stock purchase agreement remains subject to the terms of the restricted stock purchase agreement; provided however, to the extent that the Company is subject to Section 260.140.41(d) of Title 10 of
the California Code of Regulations at the time of the award, such rights to acquire shares of Common Stock under a restricted stock purchase agreement shall not be transferable except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Participant only by the Participant. 
  

	9.	COVENANTS OF THE COMPANY. 

  
 (a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all
times the number of shares of Common Stock required to satisfy such Stock Awards. 
  
 (b) Securities Law Compliance. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to
issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable
pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable 

  

 16. 

 
to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. 
  

	10.	USE OF PROCEEDS FROM STOCK. 

  
 Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company. 
  

	11.	MISCELLANEOUS. 

  
 (a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at which a Stock Award may first be
exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest.

  
 (b) Stockholder Rights. No Participant shall be
deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to
its terms. 
  
 (c) No Employment or other Service
Rights. Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was
granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s
agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be. 
  
 (d) Incentive
Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during
any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options. 
  
 (e) Investment
Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in
financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together
with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for 

  

 17. 

 
the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and
any assurances given pursuant to such requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act or (2) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock. 
  
 (f)
Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under a
Stock Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award, provided, however, that the Company shall not be
authorized to withheld shares of Common Stock in excess if the minimum statutory rates for federal or state tax purposes including payroll taxes; or (iii) delivering to the Company owned and unencumbered shares of Common Stock. 
  
 (g) Repurchase Limitation. The terms of any repurchase option
shall be specified in the Stock Award, and the repurchase price shall be the original purchase price. To the extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of the California Code of Regulations at the time a Stock Award is
made, any repurchase option contained in a Stock Award granted to a person who is not an Officer, Director or Consultant shall be upon the terms described below: 
  
 (i) Fair Market Value. If the repurchase option gives the Company the right to repurchase the
shares of Common Stock upon termination of Continuous Status at not less than the Fair Market Value of the shares of Common Stock to be purchased on the date of termination of Continuous Status, then (A) the right to repurchase shall be exercised
for cash or cancellation of purchase money indebtedness for the shares of Common Stock within ninety (90) days of termination of Continuous Status (or in the case of shares of Common Stock issued upon exercise of Stock Awards after such date of
termination, within ninety (90) days after the date of the exercise) or such longer period as may be agreed to by the Company and the Participant (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding
“qualified small business stock”) and (B) the right terminates when the shares of Common Stock become publicly traded. 
  
 (ii) Original Purchase Price. If the repurchase option gives the Company the right to repurchase the shares of Common Stock
upon termination of Continuous Status at the lower of (A) the Fair Market Value of the shares of Common Stock on the date of repurchase or (B) their original purchase price, then (x) the right to repurchase at the original purchase price 

  

 18. 

 
shall lapse at the rate of at least twenty percent (20%) of the shares of Common Stock per year over five (5) years from the date the Stock Award is granted
(without respect to the date the Stock Award was exercised or became exercisable) and (y) the right to repurchase shall be exercised for cash or cancellation of purchase money indebtedness for the shares of Common Stock within ninety (90) days of
termination of Continuous Status (or in the case of shares of Common Stock issued upon exercise of Options after such date of termination, within ninety (90) days after the date of the exercise) or such longer period as may be agreed to by the
Company and the Participant (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of the Code regarding “qualified small business stock”). 
  
 (h) Information Obligation. To the extent required by Section 260.140.46 of Title 10 of the California Code of
Regulations, the Company shall deliver financial statements to Participants at least annually. This Section 11(h) shall not apply to key Employees whose duties in connection with the Company assure them access to equivalent information. 

 

	12.	ADJUSTMENTS UPON CHANGES IN STOCK. 

  
 (a) Capitalization Adjustments. If any change is made in the
Common Stock subject to the Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than
cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the
class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock Awards will be appropriately
adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of
any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration” by the Company.) 
  
 (b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, then all outstanding Stock Awards shall
terminate immediately prior to such event. 
  
 (c)
Corporate Transaction. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation may assume any Stock Awards outstanding under the Plan or may substitute similar stock awards (including an award to
acquire the same consideration paid to the stockholders pursuant to the Corporate Transaction). In the event any surviving corporation or acquiring corporation refuses to assume such Stock Awards or to substitute similar stock awards for those
outstanding under the Plan, then with respect to Stock Awards held by Participants whose Continuous Service has not terminated as of the effective date of the Corporate Transaction, the vesting of such Stock Awards (and, if applicable, the time
during which such Stock Awards may be exercised) shall be accelerated in full, and the Stock Awards shall terminate if not exercised (if applicable) at or prior to such effective date. With respect to any other Stock Awards outstanding under
the Plan, such Stock Awards shall terminate if not exercised (if applicable) prior the effective date of the Corporate Transaction. 
  

 19. 

 (d) Change in Control. If a Change in Control occurs and within thirteen (13) months after
the effective date of such Change in Control the Continuous Service of a Participant terminates due to an involuntary termination (not including death or Disability) without Cause or due to a voluntary termination with Good Reason, then the vesting
and exercisability of all Stock Awards held by such Participant shall be accelerated in full.  
  

	13.	AMENDMENT OF THE PLAN AND STOCK AWARDS. 

  
 (a) Amendment of Plan. The Board at any time, and from time to
time, may amend the Plan. However, except as provided in Section 12 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is
necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements. 
  
 (b) Stockholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval, including,
but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers. 
  
 (c)
Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the
provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith. 
  
 (d) No Impairment of Rights. Rights under any Stock Award
granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing. 
  
 (e) Amendment of Stock Awards. The Board at any time, and from
time to time, may amend the terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing. 
  

	14.	TERMINATION OR SUSPENSION OF THE PLAN. 

  
 (a) Plan Term. The Board may suspend or terminate the Plan at
any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated. 
  
 (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the
Participant. 
  

 20. 

	15.	EFFECTIVE DATE OF PLAN. 

  
 The Plan shall become effective on the IPO Date, but no Stock Award shall be exercised (or, in the case of a stock bonus,
shall be granted) unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 
  

	16.	CHOICE OF LAW. 

  
 The law of the State of California shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to
such state’s conflict of laws rules. 
  

 21.Amended and Restated Loan and Security Agreement, dated as of May 27, 2004

 Exhibit 10.12 
  
 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
 PHARSIGHT CORPORATION 

 TABLE OF CONTENTS 
  

							
	 	  	 	  	Page

	 1
	  	 ACCOUNTING AND OTHER TERMS
	  	4
			
	 2
	  	 LOAN AND TERMS OF PAYMENT
	  	4
	 	  	2.1	  	 Promise to Pay.
	  	4
	 	  	2.2	  	 Termination of Commitment to Lend.
	  	5
	 	  	2.3	  	 Overadvances.
	  	5
	 	  	2.4	  	 Interest Rate, Payments.
	  	5
	 	  	2.5	  	 Fees.
	  	5
			
	 3
	  	CONDITIONS OF LOANS	  	6
	 	  	3.1	  	Conditions Precedent to Initial Credit Extension.	  	6
	 	  	3.2	  	Conditions Precedent to all Credit Extensions.	  	6
			
	 4
	  	CREATION OF SECURITY INTEREST	  	6
	 	  	4.1	  	Grant of Security Interest.	  	6
	 	  	4.2	  	Required Cash Collateral.	  	6
	 	  	4.3	  	Authorization of File.	  	7
			
	 5
	  	REPRESENTATIONS AND WARRANTIES	  	7
	 	  	5.1	  	Due Organization and Authorization.	  	7
	 	  	5.2	  	Collateral.	  	7
	 	  	5.3	  	Litigation.	  	7
	 	  	5.4	  	No Material Adverse Change in Financial Statements.	  	7
	 	  	5.5	  	Solvency.	  	8
	 	  	5.6	  	Regulatory Compliance.	  	8
	 	  	5.7	  	Subsidiaries.	  	8
	 	  	5.8	  	Full Disclosure.	  	8
			
	 6
	  	AFFIRMATIVE COVENANTS	  	8
	 	  	6.1	  	Government Compliance.	  	8
	 	  	6.2	  	Financial Statements, Reports, Certificates.	  	8
	 	  	6.3	  	Inventory; Returns.	  	9
	 	  	6.4	  	Taxes.	  	9
	 	  	6.5	  	Insurance.	  	9
	 	  	6.6	  	Primary Accounts.	  	9
	 	  	6.7	  	Financial Covenants.	  	10
	 	  	6.8	  	Further Assurances.	  	10
			
	 7
	  	NEGATIVE COVENANTS	  	10
	 	  	7.1	  	Dispositions.	  	10
	 	  	7.2	  	Changes in Business, Ownership, Management or Locations of Collateral.	  	10
	 	  	7.3	  	Mergers or Acquisitions.	  	10
	 	  	7.4	  	Indebtedness.	  	11
	 	  	7.5	  	Encumbrance.	  	11
	 	  	7.6	  	Distributions; Investments.	  	11
	 	  	7.7	  	Transactions with Affiliates.	  	11
	 	  	7.8	  	Subordinated Debt.	  	11
	 	  	7.9	  	Compliance.	  	11
			
	 8
	  	EVENTS OF DEFAULT	  	11
	 	  	8.1	  	Payment Default.	  	11

  

 2 

							
	 	 	8.2	 	 Covenant Default.
	  	12
	 	 	8.3	 	 Material Adverse Change.
	  	12
	 	 	8.4	 	 Attachment.
	  	12
	 	 	8.5	 	 Insolvency.
	  	12
	 	 	8.6	 	 Other Agreements.
	  	12
	 	 	8.7	 	 Judgments.
	  	12
	 	 	8.8	 	 Misrepresentations.
	  	13
			
	 9
	 	 BANK’S RIGHTS AND REMEDIES
	  	13
	 	 	9.1	 	 Rights and Remedies.
	  	13
	 	 	9.2	 	 Power of Attorney.
	  	13
	 	 	9.3	 	 Bank Expenses.
	  	14
	 	 	9.4	 	 Bank's Liability for Collateral.
	  	14
	 	 	9.5	 	 Remedies Cumulative.
	  	14
	 	 	9.6	 	 Demand Waiver.
	  	14
			
	 10
	 	 NOTICES
	  	14
			
	 11
	 	 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
	  	14
			
	 12
	 	 GENERAL PROVISIONS
	  	15
	 	 	12.1	 	 Successors and Assigns.
	  	15
	 	 	12.2	 	 Indemnification.
	  	15
	 	 	12.3	 	 Time of Essence.
	  	15
	 	 	12.4	 	 Severability of Provision.
	  	15
	 	 	12.5	 	 Amendments in Writing, Integration.
	  	15
	 	 	12.6	 	 Counterparts.
	  	15
	 	 	12.7	 	 Survival.
	  	15
	 	 	12.8	 	 Confidentiality.
	  	15
	 	 	12.9	 	 Effect of Amendment and Restatement.
	  	16
	 	 	12.10	 	 Attorneys’ Fees, Costs and Expenses.
	  	16
			
	 13
	 	 DEFINITIONS
	  	16
	 	 	13.1	 	 Definitions.
	  	16
		
	 Pharsight Corporation
	  	4

  

 3 

 This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (“Agreement”) dated as of the
Effective Date, between SILICON VALLEY BANK (“Bank”), whose address is 3003 Tasman Drive, Santa Clara, California 95054 and PHARSIGHT CORPORATION (“Borrower”), whose address is 800 West El Camino Real, Suite 200, Mountain View,
California 94040. 
  
 RECITALS 
  
 A. Bank and Borrower are parties to that certain Loan and Security Agreement,
dated June 13, 2001, as amended and that certain Export and Import Loan and Security Agreement (collectively, the “Original Agreement”). 
  
 B. Bank and Borrower are parties to that certain UCC Financing Statement filed with the Secretary of State of Delaware on June 25, 2002 as file number
21559701. 
  
 C. Borrower and Bank desire in this Agreement to set
forth their agreement with respect to a working capital and term loan and to amend and restate in its entirety without novation the Original Agreement in accordance with the provisions herein. 
  
 AGREEMENT 
  
 The parties agree as follows: 
  

	1	ACCOUNTING AND OTHER TERMS 

  
 Accounting terms not defined in this Agreement will be construed following GAAP. Calculations and determinations must be made following GAAP. The
term “financial statements” includes the notes and schedules. The terms “including” and “includes” always mean “including (or includes) without limitation,” in this or any Loan Document. 
  

	2	LOAN AND TERMS OF PAYMENT 

  

	2.1	Promise to Pay. 

  
 Borrower promises to pay Bank the unpaid principal amount of all Credit Extensions and interest on the unpaid principal amount of the Credit Extensions.

  

	2.1.1	Revolving Advances. 

  
 (a) Bank will make Advances not exceeding the lesser of the Committed Revolving Line or the Borrowing Base. Amounts borrowed under this Section may
be repaid and reborrowed during the term of this Agreement. 
  
 (b) To obtain an Advance, Borrower must notify Bank by facsimile or telephone by 12:00 p.m. Pacific time on the Business Day the Advance is to be made. Borrower must promptly confirm the notification by delivering to Bank the
Payment/Advance Form attached as Exhibit B. Bank will credit Advances to Borrower’s deposit account. Bank may make Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if
the Advances are necessary to meet Obligations which have become due. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Borrower will indemnify Bank for any loss Bank suffers due to such
reliance. 
  
 (c) The Committed Revolving Line terminates on the
Revolving Maturity Date, when all Advances are immediately payable. 
  

 4 

	2.1.2	Term Loan. 

  
 (a) The outstanding balance under the Term Loan will continue to amortize and be payable as follows: 
  
 (b) Borrower will pay 25 equal installments of principal of $72,916.67 plus
accrued interest (the “Term Loan Payment”). Each Term Loan Payment is payable on the 1st of each month during the term of the loan. Borrower’s final Term Loan Payment, due on June 1, 2006, includes all outstanding Term Loan principal
and accrued interest. 
  

	2.2	Termination of Commitment to Lend. 

  
 Bank’s obligation to lend the undisbursed portion of the Obligations will terminate if, in Bank’s sole discretion, there has been a
material adverse change in the general affairs, management, results of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations, or there has been any material adverse deviation by Borrower from the most recent
business plan of Borrower presented to and accepted by Bank prior to the execution of this Agreement. 
  

	2.3	Overadvances. 

  
 If Borrower’s Obligations under Section 2.1.1 exceed the lesser of either (i) the Committed Revolving Line or (ii) the Borrowing Base,
Borrower must immediately pay Bank the excess. 
  

	2.4	Interest Rate, Payments. 

  
 (a) Interest Rate. (i) Advances accrue interest on the outstanding principal balance at a per annum rate of 0.5 of one percentage point above the Prime
Rate; and (ii) the Term Loan accrues interest at a per annum rate of 1.25 percentage points above the Prime Rate. After an Event of Default, Obligations accrue interest at 5 percent above the rate effective immediately before the Event of Default.
The interest rate increases or decreases when the Prime Rate changes. Interest is computed on a 360 day year for the actual number of days elapsed. 
  
 (b) Payments. Interest due on the Committed Revolving Line is payable on the 26th of each month. Bank may debit any of Borrower’s deposit accounts
including Account Number 3300027682 for principal and interest payments owing or any amounts Borrower owes Bank. Bank will promptly notify Borrower when it debits Borrower’s accounts. These debits are not a set-off. Payments received after
12:00 noon Pacific time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional interest shall accrue.

  

	2.5	Fees. 

  
 Borrower will pay: 
  
 (a) Facility Fee. A fully earned, non-refundable Facility Fee of $10,500 for the Committed Revolving Line due on the Effective Date; and 
  
 (b) Bank Expenses. All Bank Expenses (including reasonable attorneys’
fees and reasonable expenses) incurred through and after the date of this Agreement, are payable when due. 
  

 5 

	3	CONDITIONS OF LOANS 

  

	3.1	Conditions Precedent to Initial Credit Extension. 

  
 Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that it receive the agreements, documents and fees it
requires. 
  

	3.2	Conditions Precedent to all Credit Extensions. 

  
 Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following: 
  
 (a) timely receipt of any Payment/Advance Form; and 
  
 (b) the representations and warranties in Section 5 must be materially
true on the date of the Payment/Advance Form and on the effective date of each Credit Extension and no Event of Default may have occurred and be continuing, or result from the Credit Extension. Each Credit Extension is Borrower’s representation
and warranty on that date that the representations and warranties of Section 5 remain true. 
  

	4	CREATION OF SECURITY INTEREST 

  

	4.1	Grant of Security Interest. 

  
 Borrower grants Bank a continuing security interest in all presently existing and later acquired Collateral to secure all Obligations and performance of
each of Borrower’s duties under the Loan Documents. Except for Permitted Liens, any security interest will be a first priority security interest in the Collateral. Bank may place a “hold” on any deposit account pledged as Collateral.
Notwithstanding the foregoing, the security interest granted herein does not extend to and the term “Collateral” does not include any Intellectual Property; provided that the Collateral shall include Intellectual Property to the extent,
and only to the extent, a security interest in any portion of the Intellectual Property is required in order to permit Bank to hold a perfected security interest in the other Collateral, including, without limitation, Accounts arising from the
license, publication or other exploitation of Copyrights or other Intellectual Property; provided, further, that Borrower shall execute and deliver a Negative Pledge Agreement, attached hereto as Exhibit F, satisfactory to Bank with respect to the
Intellectual Property, and upon any breach thereof, the Collateral shall be deemed to include, retroactively from the date of Original Agreement, the Intellectual Property. If the Agreement is terminated, Bank’s lien and security interest in
the Collateral will continue until Borrower fully satisfies its Obligations. 
  

	4.2	Required Cash Collateral. 

  
 In the event any financial covenant set forth in Section 6.7 is breached, and in addition to all of Bank’s other rights and remedies hereunder upon
the occurrence of an Event of Default, Borrower shall immediately deliver to Bank, for deposit with Bank, cash in the amount of at least 105% of the then aggregate outstanding balance of the Term Loan, to be held by Bank in an interest bearing time
deposit account subject to a perfected, first priority security interest securing all Obligations. Bank’s hold on such cash shall be released if: (a) Bank shall have waived its other rights and remedies as to such existing financial covenant
breach or breaches and no other Event of Default has occurred and is continuing; and (b) Bank shall have determined that Borrower is no longer in violation of any of the financial covenants in Section 6.7 previously breached. 
  

 6 

	4.3	Authorization of File. 

  
 Borrower authorizes Bank to file financing statements without notice to Borrower, with all appropriate jurisdictions, as Bank deems appropriate, in order
to perfect or protect Bank’s interest in the Collateral. 
  

	5	REPRESENTATIONS AND WARRANTIES 

  
 Borrower represents and warrants as follows: 
  

	5.1	Due Organization and Authorization. 

  
 Borrower and each Subsidiary is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified, except where the failure to do so could not reasonably be expected to cause a Material Adverse Change. Borrower has not changed
its state of formation or its organizational structure or type or any organizational number (if any) assigned by its jurisdiction of formation. 
  
 The execution, delivery and performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s formation documents, nor
constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which or by which it is bound in which the default could reasonably be expected to cause a Material Adverse
Change. 
  

	5.2	Collateral. 

  
 Borrower has good title to the Collateral, free of Liens except Permitted Liens or Borrower has Rights to each asset that is Collateral. The Eligible
Accounts are bona fide, existing obligations, and the service or property has been performed or delivered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. Borrower has no notice of any
actual or imminent Insolvency Proceeding of any account debtor whose accounts are an Eligible Account in any Borrowing Base Certificate. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower
is the sole owner of the Intellectual Property, except for exclusive or non-exclusive license limits the use and application of the licensed Intellectual property to specific indications and geographic regions and does not impair Borrower’s
ability to commercialize its Intellectual Property in its United States of America business markets. Each Patent is valid and enforceable and no part of the Intellectual Property has been judged invalid or unenforceable, in whole or in part, and no
claim has been made that any part of the Intellectual Property violates the rights of any third party. 
  

	5.3	Litigation. 

  
 Except as shown in the Schedule, there are no actions or proceedings pending or, to the knowledge of Borrower’s Responsible Officers, threatened by
or against Borrower or any Subsidiary in which a likely adverse decision could reasonably be expected to cause a Material Adverse Change. 
  

	5.4	No Material Adverse Change in Financial Statements. 

  
 All consolidated financial statements for Borrower, and any Subsidiary, delivered to Bank fairly present in all material respects Borrower’s
consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements
submitted to Bank. 
  

 7 

	5.5	Solvency. 

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

	5.6	Regulatory Compliance. 

  
 Borrower is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company
Act. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations T and U of the Federal Reserve Board of Governors). Borrower has complied in all material respects with the Federal Fair Labor
Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to cause a Material Adverse Change. None of Borrower’s or any Subsidiary’s properties or assets has been used by
Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each Subsidiary has timely filed all
required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP. Borrower and each Subsidiary has obtained all consents, approvals and authorizations
of, made all declarations or filings with, and given all notices to, all government authorities that are necessary to continue its business as currently conducted, except where the failure to do so could not reasonably be expected to cause a
Material Adverse Change. 
  

	5.7	Subsidiaries. 

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

	5.8	Full Disclosure. 

  
 No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank (taken together with all such
written certificates and written statements to Bank) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading. 
  

	6	AFFIRMATIVE COVENANTS 

  
 Borrower will do all of the following for so long as Bank has an obligation to lend, or there are outstanding Obligations: 
  

	6.1	Government Compliance. 

  
 Borrower will maintain its and all Subsidiaries’ legal existence and good standing in its jurisdiction of formation and maintain qualification in
each jurisdiction in which the failure to so qualify would reasonably be expected to cause a material adverse effect on Borrower’s business or operations. Borrower will comply, and have each Subsidiary comply, with all laws, ordinances and
regulations to which it is subject, noncompliance with which could have a material adverse effect on Borrower’s business or operations or would reasonably be expected to cause a Material Adverse Change. 
  

	6.2	Financial Statements, Reports, Certificates. 

  
 (a) Borrower will deliver to Bank: (i) as soon as available, but no later than 30 days after the last day of each month, a company prepared consolidated
balance sheet and income 
  

 8 

 statement covering Borrower’s consolidated operations during the period certified by a Responsible Officer and in a
form acceptable to Bank; (ii) as soon as available, but no later than 5 days of filing with the Securities and Exchange Commission, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified
opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank; (iii) a prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages
or costs to Borrower or any Subsidiary of $100,000 or more; and (iv) budgets, sales projections, operating plans or other financial information Bank reasonably requests. 
  
 (b) Within 20 days after the last day of each month, Borrower will deliver to Bank a Borrowing Base Certificate signed by a
Responsible Officer in the form of Exhibit C, with aged listings of accounts receivable and accounts payable and deferred revenue schedules. 
  
 (c) Within 30 days after the last day of each month, Borrower will deliver to Bank with the monthly financial statements a Compliance Certificate signed
by a Responsible Officer in the form of Exhibit D. 
  
 (d) On or
prior to April 30th of each year, Borrower will deliver to Bank its board of directors’ approved operating
plan. 
  
 (e) Allow Bank to audit Borrower’s Collateral at
Borrower’s expense. Such audits will be conducted no more often than every 6 months unless an Event of Default has occurred and is continuing. 
  

	6.3	Inventory; Returns. 

  
 Borrower will keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its account
debtors will follow Borrower’s customary practices as they exist at execution of this Agreement. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims, that involve more than $50,000. 
  

	6.4	Taxes. 

  
 Borrower will make, and cause each Subsidiary to make, timely payment of all material federal, state, and local taxes or assessments and will deliver to
Bank, on demand, appropriate certificates attesting to the payment. 
  

	6.5	Insurance. 

  
 Borrower will keep its business and the Collateral insured for risks and in amounts, as Bank may reasonably request. Insurance policies will be in a form,
with companies, and in amounts that are satisfactory to Bank in Bank’s reasonable discretion. All property policies will have a lender’s loss payable endorsement showing Bank as an additional loss payee and all liability policies will show
the Bank as an additional insured and provide that the insurer must give Bank at least 20 days notice before canceling its policy. At Bank’s request, Borrower will deliver certified copies of policies and evidence of all premium payments.
Proceeds payable under any policy will, at Bank’s option, be payable to Bank on account of the Obligations. 
  

	6.6	Primary Accounts. 

  
 Borrower will maintain its primary operating accounts with Bank, which relationship shall include Borrower maintaining 85% of its cash and cash
equivalents in deposit accounts or investment accounts at Bank or one of its affiliates 
  

 9 

	6.7	Financial Covenants. 

  
 Borrower will maintain as of the last day of each month (unless otherwise stated): 
  
 (i) Quick Ratio (Adjusted). A ratio of cash and cash equivalents plus accounts receivables divided by Current
Liabilities minus Deferred Revenue of at least (i) 1.50 to 1.00 for the months ending April 30, 2004; May 31, 2004, June 30, 2004 and July 31, 2004; (ii) 1.75 to 1.00 for the months ending August 31, 2004, September 30, 2004, October 31, 2004 and
November 30, 2004 and (iii) 2.00 to 1.00 for the months ending December 31, 2004 and thereafter. 
  
 (ii) Profitability/Loss (tested quarterly). Borrower will have a net profit of $1.00, provided, however, Borrower may suffer a loss not to exceed
$500,000 for quarter ending June 30, 2004. 
  

	6.8	Further Assurances. 

  
 Borrower will execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s security interest in
the Collateral or to effect the purposes of this Agreement. 
  

	7	NEGATIVE COVENANTS 

  
 For so long as Bank has an obligation to lend or there are any outstanding Obligations, Borrower shall not, without Bank’s prior written consent
(which shall be a matter of its good faith business judgment), do any of the following: 
  

	7.1	Dispositions. 

  
 Convey, sell, lease, transfer or otherwise dispose of (collectively “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part
of its business or property, except for Transfers (i) of Inventory in the ordinary course of business; (ii) of non-exclusive licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary
course of business; or (iii) of worn-out or obsolete Equipment. 
  

	7.2	Changes in Business, Ownership, Management or Locations of Collateral. 

  

Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower or reasonably related
thereto or have a material change in its ownership or management of greater than 25% (other than by the sale of Borrower’s equity securities in a public offering or to venture capital investors so long as Borrower identifies the venture capital
investors prior to the closing of the investment). Borrower will not, without at least 30 days prior written notice, relocate its chief executive office, change its state of formation (including reincorporation), change its organizational number or
name or add any new offices or business locations (such as warehouses) in which Borrower maintains or stores over $5,000 in Collateral. 
  

	7.3	Mergers or Acquisitions. 

  
 Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to
acquire, all or substantially all of the capital stock or property of another Person, except where (i) no Event of Default has occurred and is continuing or would result from such action during the term of this Agreement and (ii) such
transaction would not result in a decrease of more than 25% of Tangible Net Worth. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower. 
  

 10 

	7.4	Indebtedness. 

  
 Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness. 
  

	7.5	Encumbrance. 

  
 Create, incur, or allow any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit
any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted here, subject to Permitted Liens. 
  

	7.6	Distributions; Investments. 

  
 Directly or indirectly acquire or own any Person, or make any Investment in any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so. Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock. Notwithstanding the foregoing, Borrower will be allowed to pay any dividends (provided that cash dividends shall not exceed
$600,000 per year) and payments in connection with redemptions as permitted or required pursuant to the terms of the Series A Preferred Stock and/or the Series B Preferred Stock. 
  

	7.7	Transactions with Affiliates. 

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

	7.8	Subordinated Debt. 

  
 Make or permit any payment on any Subordinated Debt, except under the terms of the Subordinated Debt, or amend any provision in any document relating to
the Subordinated Debt without Bank’s prior written consent. 
  

	7.9	Compliance. 

  
 Become an “investment company” or a company controlled by an “investment company,” under the Investment Company Act of 1940 or
undertake as one of its important activities extending credit to purchase or carry margin stock, or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on
Borrower’s business or operations or would reasonably be expected to cause a Material Adverse Change, or permit any of its Subsidiaries to do so. 
  

	8	EVENTS OF DEFAULT 

  
 Any one of the following is an Event of Default: 
  

	8.1	Payment Default. 

  
 If Borrower fails to pay any of the Obligations within 3 days after their due date, however, during such period no Credit Extensions will be made;

  

 11 

	8.2	Covenant Default. 

  
 (a) If Borrower fails to perform any obligation under Sections 6.2 or 6.7 or violates any of the covenants contained in Section 7 of this Agreement, or

  
 (b) If Borrower fails or neglects to perform, keep, or observe
any other material term, provision, condition, covenant, or agreement contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to cure such default within ten (10) days after the occurrence 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 Credit Extensions will be made during such cure period); 

 

	8.3	Material Adverse Change. 

  
 If there (i) occurs a material adverse change in the business, operations, or financial condition of the Borrower, or (ii) is a material impairment of the
prospect of repayment of any portion of the Obligations; or (iii) is a material impairment of the value or priority of Bank’s security interests in the Collateral (the foregoing being defined as a “Material Adverse Change”).

  

	8.4	Attachment. 

  
 If any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver and the attachment,
seizure or levy is not removed in 10 days, or if Borrower is enjoined, restrained, or prevented by court order from conducting a material part of its business or if a judgment or other claim becomes a Lien on a material portion of Borrower’s
assets, or if a notice of lien, levy, or assessment is filed against any of Borrower’s assets by any government agency and not paid within 10 days after Borrower receives notice. These are not Events of Default if stayed or if a bond is posted
pending contest by Borrower (but no Credit Extensions will be made during the cure period); 
  

	8.5	Insolvency. 

  
 If Borrower becomes insolvent or if Borrower begins an Insolvency Proceeding or an Insolvency Proceeding is begun against Borrower and not dismissed or
stayed within 30 days (but no Credit Extensions will be made before any Insolvency Proceeding is dismissed); 
  

	8.6	Other Agreements. 

  
 If there is a default in any agreement between Borrower and a third party that gives the third party the right to accelerate any Indebtedness exceeding
$100,000 or that could cause a Material Adverse Change; 
  

	8.7	Judgments. 

  
 If a money judgment(s) in the aggregate of at least $100,000 is rendered against Borrower and is unsatisfied and unstayed for 10 days (but no Credit
Extensions will be made before the judgment is stayed or satisfied); or 
  

 12 

	8.8	Misrepresentations. 

  
 If Borrower or any Person acting for Borrower makes any material misrepresentation or material misstatement now or later in any warranty or representation
in this Agreement or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document. 
  

	9	BANK’S RIGHTS AND REMEDIES 

  

	9.1	Rights and Remedies. 

  
 When an Event of Default occurs and continues Bank may, without notice or demand, do any or all of the following: 
  
 (a) Declare all Obligations immediately due and payable (but if an Event of
Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank); 
  
 (b) Stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank;

  
 (c) Settle or adjust disputes and claims directly with account
debtors for amounts, on terms and in any order that Bank considers advisable; notify any Person owing Borrower money of Bank’s security interest in the funds and verify the amount of the Account. Borrower must collect all payments in trust for
Bank and, if requested by Bank, immediately deliver the payments to Bank in the form received from the account debtor, with proper endorsements for deposit; 
  
 (d) Make any payments and do any acts it considers necessary or reasonable to protect its security interest in the Collateral. Borrower will assemble the
Collateral if Bank requires and make it available as Bank designates. Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which
appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies; 
  
 (e) Apply to the Obligations any (i) balances and deposits of Borrower it
holds, or (ii) any amount held by Bank owing to or for the credit or the account of Borrower; 
  
 (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral; and 
  

(g) Dispose of the Collateral according to the Code. 
  

	9.2	Power of Attorney. 

  
 Effective only when an Event of Default occurs and continues, Borrower irrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower’s
name on any checks or other forms of payment or security; (ii) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against account debtors, (iii) make, settle, and adjust all claims under Borrower’s insurance
policies; (iv) settle and adjust disputes and claims about the Accounts directly with account debtors, for amounts and on terms Bank determines reasonable; and (v) transfer the Collateral into the name of Bank or a third party as the Code permits.
Bank may exercise the power of attorney to sign Borrower’s name on any documents necessary to perfect or continue the perfection of any security interest regardless of whether an Event of Default has occurred. Bank’s appointment as
Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates.

  

 13 

	9.3	Bank Expenses. 

  
 If Borrower fails to pay any amount or furnish any required proof of payment to third persons, Bank may make all or part of the payment or obtain
insurance policies required in Section 6.5, and take any action under the policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then applicable rate and secured by the
Collateral. No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default. 
  

	9.4	Bank’s Liability for Collateral. 

  
 If Bank complies with reasonable banking practices and Section 9-207 of the Code, it is not liable for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other person. Except as provided above, Borrower bears all risk of loss, damage or destruction of
the Collateral. 
  

	9.5	Remedies Cumulative. 

  
 Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements are cumulative. Bank has all rights and remedies
provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay is not a waiver, election, or acquiescence.
No waiver is effective unless signed by Bank and then is only effective for the specific instance and purpose for which it was given. 
  

	9.6	Demand Waiver. 

  
 Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 
  

	10	NOTICES 

  
 All notices or demands by any party about this Agreement or any other related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, postage prepaid, return receipt requested, or by telefacsimile to the addresses set forth at the beginning of this Agreement. A party may change its notice address by giving the other party written
notice. 
  

	11	CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER 

  
 California law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Santa Clara County, California. 
  
 BORROWER
AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL
INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. 
  

 14 

	12	GENERAL PROVISIONS 

  

	12.1	Successors and Assigns. 

  
 This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights
under it without Bank’s prior written consent which may be granted or withheld in Bank’s discretion. Bank has 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 under this Agreement. 
  

	12.2	Indemnification. 

  
 Borrower will indemnify, defend and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and
liabilities asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank from, following, or consequential to transactions between Bank and Borrower
(including reasonable attorneys fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct. 
  

	12.3	Time of Essence. 

  
 Time is of the essence for the performance of all obligations in this Agreement. 
  

	12.4	Severability of Provision. 

  
 Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision. 
  

	12.5	Amendments in Writing, Integration. 

  
 All amendments to this Agreement must be in writing and signed by Borrower and Bank. This Agreement represents the entire agreement about this subject
matter, and supersedes prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement merge into this Agreement and the Loan
Documents. 
  

	12.6	Counterparts. 

  
 This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement. 
  

	12.7	Survival. 

  
 All covenants, representations and warranties made in this Agreement continue in full force while any Obligations remain outstanding. The obligations of
Borrower in Section 12.2 to indemnify Bank will survive until all statutes of limitations for actions that may be brought against Bank have run. 
  

	12.8	Confidentiality. 

  
 In handling any confidential information, Bank will exercise the same degree of care that it exercises for its own proprietary information, but disclosure
of information may be made (i) to Bank’s subsidiaries or affiliates in connection with their business with Borrower, (ii) to prospective transferees or purchasers of any interest in the loans (provided, however, Bank shall use commercially
reasonable efforts in obtaining such prospective transferee or purchasers agreement of the terms of this provision), (iii) as required by law, regulation, subpoena, or other 
  

 15 

 order, (iv) as required in connection with Bank’s examination or audit and (v) as Bank considers appropriate
exercising remedies under this Agreement. Confidential information does not include information that either: (a) is in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to
Bank; or (b) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information. 
  

	12.9	Effect of Amendment and Restatement. 

  
 This Agreement is intended to and does completely amend and restate, without novation, the Original Agreement. All credit extensions or loans outstanding
under the Original Agreement are and shall continue to be outstanding under this Agreement. All security interests granted under the Original Agreement are hereby confirmed and ratified and shall continue to secure all Obligations under this
Agreement. 
  

	12.10	Attorneys’ Fees, Costs and Expenses. 

  
 In any action or proceeding between Borrower and Bank arising out of the Loan Documents, the prevailing party will be entitled to recover its reasonable
attorneys’ fees and other reasonable costs and expenses incurred, in addition to any other relief to which it may be entitled. 
  

	13	DEFINITIONS 

  

	13.1	Definitions. 

  
 In this Agreement: 
  
 “Accounts” are all existing and later arising accounts, contract rights, and other obligations owed Borrower in connection with its sale
or lease of goods (including licensing software and other technology) or provision of services, all credit insurance, guaranties, other security and all merchandise returned or reclaimed by Borrower and Borrower’s Books relating to any of the
foregoing, as such definition may be amended from time to time according to the Code. 
  
 “Advance” or “Advances” is a loan advance (or advances) under the Committed Revolving Line. 
  
 “Affiliate” of a Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by
or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members. 
  
 “Bank Expenses” are all audit fees and expenses and
reasonable costs and expenses (including reasonable attorneys’ fees and expenses) for preparing, negotiating, administering, defending and enforcing the Loan Documents (including appeals or Insolvency Proceedings). 
  
 “Borrower’s Books” are all Borrower’s books and
records including ledgers, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition and all computer programs or discs or any equipment containing the information. 
  
 “Borrowing Base” is 80% of Eligible Accounts as determined
by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may lower the percentage of the Borrowing Base after performing an audit of Borrower’s Collateral. 
  
 “Business Day” is any day that is not a Saturday, Sunday or
a day on which the Bank is closed. 
  

 16 

 “Code” is the California Uniform Commercial Code, as applicable. 
  
 “Collateral” is the property described on Exhibit A.

  
 “Committed Revolving Line” is an Advance of
up to $3,000,000. 
  
 “Contingent Obligation” is,
for any Person, any direct or indirect liability, contingent or not, of that Person for (i) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed,
co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) all obligations from any interest rate,
currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent
Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under the guarantee or other support arrangement. 
  
 “Credit Extension” is each Advance, Term Loan, or any other
extension of credit by Bank for Borrower’s benefit. 
  
 “Current Liabilities” are the aggregate amount of Borrower’s Total Liabilities which mature within one (1) year plus Bank’s outstanding Obligations. 
  
 “Deferred Revenue” is all amounts received in advance of performance and not yet recognized as revenue.

  
 “Effective Date” is the date Bank executes
this Agreement. 
  
 “Eligible Accounts” are
Accounts in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5; but Bank may change eligibility standards by giving Borrower notice. Unless Bank agrees otherwise in
writing, Eligible Accounts will not include: 
  
 (a) Accounts
that the account debtor has not paid within 90 days of invoice date; 
  
 (b) Accounts for an account debtor, 50% or more of whose Accounts have not been paid within 90 days of invoice date; 
  
 (c) Credit balances over 90 days from invoice date; 
  
 (d) Accounts for an account debtor, including Affiliates, whose total obligations to Borrower exceed 25% of all Accounts, for the amounts that exceed that
percentage, unless the Bank approves in writing; 
  
 (e) Accounts
for which the account debtor does not have its principal place of business in the United States; 
  
 (f) Accounts for which the account debtor is a federal, state or local government entity or any department, agency, or instrumentality; 
  
 (g) Accounts for which Borrower owes the account debtor, but only up to the
amount owed (sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts); 
  

 17 

 (h) Accounts for demonstration or promotional equipment, or in which goods are consigned, sales
guaranteed, sale or return, sale on approval, bill and hold, or other terms if account debtor’s payment may be conditional; 
  
 (i) Accounts for which the account debtor is Borrower’s Affiliate, officer, employee, or agent; 
  
 (j) Accounts in which the account debtor disputes liability or makes any
claim and Bank believes there may be a basis for dispute (but only up to the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business; 
  
 (k) Accounts for which Bank reasonably determines collection to be
doubtful. 
  
 “Equipment” is all present and
future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest. 
  
 “ERISA” is the Employment Retirement Income Security Act of 1974, and its regulations. 
  
 “GAAP” is generally accepted accounting principles.

  
 “Indebtedness” is (a) indebtedness for
borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations and (d) Contingent Obligations. 
  
 “Insolvency Proceeding” are proceedings by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions,
extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief. 
  
 “Inventory” is present and future inventory in which Borrower has any interest, including merchandise, raw materials, parts, supplies,
packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or possession or in transit and including returns on any accounts or other proceeds (including insurance proceeds) from the sale or disposition of any of the foregoing and
any documents of title. 
  
 “Investment” is any
beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance or capital contribution to any Person. 
  
 “Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. 
  
 “Loan Documents” are, collectively, this Agreement, any
note, or notes or guaranties executed by Borrower or Guarantor, and any other present or future agreement between Borrower and/or for the benefit of Bank in connection with this Agreement, all as amended, extended or restated. 
  
 “Material Adverse Change” is defined in Section 8.3.

  
 “Obligations” are debts, principal, interest,
Bank Expenses and other amounts Borrower owes Bank now or later, including cash management services, letters of credit and foreign 
  

 18 

 exchange contracts, if any and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank. 
  
 “Original
Agreement” has the meaning set forth in recital paragraph A. 
  
 “Permitted Indebtedness” is: 
  
 (a)
Borrower’s indebtedness to Bank under this Agreement or any other Loan Document; 
  
 (b) Indebtedness existing on the Effective Date and shown on the Schedule; 
  
 (c) Subordinated Debt; 
  
 (d) Indebtedness to trade creditors incurred in the ordinary course of business; and 
  
 (e) Indebtedness secured by Permitted Liens. 
  
 “Permitted Investments” are: 
  
 (a) Investments shown on the Schedule and existing on the Effective Date; and 
  
 (b) (i) marketable direct obligations issued or unconditionally guaranteed
by the United States or its agency or any State maturing within 1 year from its acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor’s Corporation or
Moody’s Investors Service, Inc., and (iii) Bank’s certificates of deposit issued maturing no more than 1 year after issue. 
  
 “Permitted Liens” are: 
  
 (a) Liens existing on the Effective Date and shown on the Schedule or arising under this Agreement or other Loan Documents; 
  
 (b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which Borrower maintains adequate reserves on its Books, if they have no priority over any of Bank’s security interests; 
  
 (c) Purchase money Liens (i) on Equipment acquired or held by Borrower or
its Subsidiaries incurred for financing the acquisition of the Equipment, or (ii) existing on equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the equipment; 
  
 (d) Licenses or sublicenses granted in the ordinary course of
Borrower’s business and any interest or title of a licensor or under any license or sublicense, if the licenses and sublicenses permit granting Bank a security interest; 
  
 (e) Leases or subleases granted in the ordinary course of Borrower’s business, including in connection with
Borrower’s leased premises or leased property; 
  
 (f) Liens
incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the
principal amount of the indebtedness may not increase. 
  
 “Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company association, trust, unincorporated organization, association, corporation, 
  

 19 

 institution, public benefit corporation, firm, joint stock company, estate, entity or government agency. 
  
 “Prime Rate” is Bank’s most recently announced
“prime rate,” even if it is not Bank’s lowest rate. 
  
 “Responsible Officer” is each of the Chief Executive Officer, the President, the Chief Financial Officer and the Controller of Borrower. 
  
 “Revolving Maturity Date” is May 26, 2005. 
  
 “Rights”, as applied to the Collateral, means the Borrower’s rights and interests in, and powers with
respect to, that Collateral, whatever the nature of those rights, interests and powers and, in any event, including Borrower’s power to transfer rights in such Collateral to Bank. 
  
 “Schedule” is any attached schedule of exceptions. 
  
 “Subordinated Debt” is debt incurred by Borrower
subordinated to Borrower’s indebtedness owed to Bank and which is reflected in a written agreement in a manner and form acceptable to Bank and approved by Bank in writing. 
  
 “Subsidiary” is for any Person, or any other business entity of which more than 50% of the voting stock or
other equity interests is owned or controlled, directly or indirectly, by the Person or one or more Affiliates of the Person. 
  
 “Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its Subsidiaries minus, (i) any amounts
attributable to (a) goodwill, (b) intangible items such as unamortized debt discount and expense, patents, trade and service marks and names, copyrights and research and development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and (ii) Total Liabilities. 
  
 “Term Loan” a loan of $1,822,900. 
  
 “Term Loan Maturity Date” is June 1, 2006. 
  
 “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, and current portion Subordinated Debt
allowed to be paid, but excluding all other Subordinated Debt. 
  
 BORROWER:

  
 Pharsight Corporation 
  

			
	 By:
	 	 /s/ Cynthia Stephens 5-24-04

	 Title:
	 	 SVP & CFO

  

 20 

 BANK: 
  
 SILICON VALLEY BANK 
  

			
	 By:
	 	 /s/ Ron Kundich

	 Title:
	 	 VP

	 Effective Date:
	 	 5-27-04

  

 21 

 EXHIBIT A 
  

The Collateral consists of all of Borrower’s right, title and interest in and to the following whether owned now or hereafter arising and whether
the Borrower has rights now or hereafter has rights therein and wherever located: 
  
 All goods and equipment now owned or hereafter acquired, including, without limitation, all machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing, and all
attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located; 
  
 All inventory, now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping
materials, work in process and finished products including such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above; 
  
 All contract rights and general intangibles (as such definitions may be amended from time to time according to the Code), now owned or hereafter acquired,
including, without limitation, goodwill, trademarks, servicemarks, trade styles, trade names, patents, patent applications, leases, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer lists, route lists,
infringements, claims, computer programs, computer discs, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind,; 
  
 All now existing and hereafter arising accounts, contract rights, royalties,
license rights and all other forms of obligations owing to Borrower arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Borrower (as such definitions may be amended from time to time according to
the Code) whether or not earned by performance, and any and all credit insurance, insurance (including refund) claims and proceeds, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower; 

 
 All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets, letters of credit, letter of credit rights, certificates of deposit, instruments and chattel paper and electronic chattel paper now owned or hereafter acquired and
Borrower’s Books relating to the foregoing; 
  
 All copyright
rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished, now owned or hereafter acquired; all trade secret rights, including all rights to
unpatented inventions, know-how, operating manuals, license rights and agreements and confidential information, now owned or hereafter acquired; all mask work or similar rights available for the protection of semiconductor chips, now owned or
hereafter acquired; all claims for damages by way of any past, present and future infringement of any of the foregoing; and 
  
 All Borrower’s Books relating to the foregoing and any and all claims, rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof. 
  
 Borrower and Bank are
parties to that certain Negative Pledge Agreement, whereby Borrower, in connection with Bank’s loan or loans to Borrower, has agreed, among other things, not to sell, transfer, assign, mortgage, pledge, lease grant a security interest in, or
encumber any of its intellectual property, without Bank’s prior written consent. 
  
 Notwithstanding the foregoing, the Collateral shall not be deemed to include any copyrights, copyright applications, copyright registration and like protection in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; any patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of
the same, trademarks, servicemarks and applications therefor, whether registered or not, and the goodwill of the business of Borrower connected with and symbolized by such trademarks, any trade 

 secret rights, including any rights to unpatented inventions, know-how, operating manuals, license rights and agreements
and confidential information, now owned or hereafter acquired; or any claims for damage by way of any past, present and future infringement of any of the foregoing (collectively, the “Intellectual Property”), except that the Collateral
shall include the proceeds of all the Intellectual Property including proceeds from the sale, licensing or other disposition of the Intellectual Property and proceeds that are accounts, (e.g., accounts receivable of Borrower, or general intangibles
consisting of proceeds and rights to payment). Notwithstanding the prior sentence, if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security
interest in such accounts and general intangibles of Borrower that are proceeds of the Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary
to permit perfection of Bank’s security interest in such accounts and general intangibles of Borrower that are proceeds of the Intellectual Property. 
  

 2 

 EXHIBIT B 
  

LOAN PAYMENT/ADVANCE REQUEST FORM 
 DEADLINE FOR SAME DAY PROCESSING IS 12:00 P.S.T. 

			
	 Fax To:
	  	 Date:
                                    

  

	 ̈	LOAN PAYMENT: 

  
 Pharsight Corporation (Borrower) 
  

			
	 From Account
#                                        
            
	  	 To Account
#                                        
            

	                                     (Deposit Account
#)
	  	                                 (Loan Account #)

	
	 Principal
$                                        
             and/or Interest
$                                        
                            

  
 All Borrower’s
representation and warranties in the Loan and Security Agreement are true, correct and complete in all material respects up to and including the date of the transfer request for a loan payment, but those representations and warranties expressly
referring to another date shall be true, correct and complete in all material respects as of that date: 
  

					
	 Authorized Signature:

	  	 Phone Number:
	  	  
 __________________________

  

	 ̈	LOAN ADVANCE: 

  
 Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

  

			
	 From Account
#                                        
            
	  	 To Account
#                                        
            

	                                     (Loan Account
#)
	  	                                     (Deposit Account
#)

  
 Amount of Advance
$                                        

  
 All Borrower’s representation and warranties in the
Amended and Restated Loan and Security Agreement are true, correct and complete in all material respects up to and including the date of the transfer request for an advance, but those representations and warranties expressly referring to another
date shall be true, correct and complete in all material respects as of that date: 
  

					
	 Authorized Signature:

	  	 Phone Number:
	  	  
 __________________________

  
 OUTGOING WIRE REQUEST 
  
 Complete only if all or a portion of funds from the loan advance above are to be wired. 
  
 Deadline for same day processing is 12:00pm, P.S.T. 
  

			
	 Beneficiary Name:
                                        
        
	  	 Amount of Wire:
$                                        
        

	 Beneficiary Bank:
                                        
        
	  	 Account Number:
                                        
        

	 City and State:
                                        
                    
	  	 

  
 Beneficiary Bank
Transit (ABA) #:                                     
Beneficiary Bank Code (Swift, Sort, Chip, etc.):                     
                                        
                                        
                 (For International Wire Only) 
  

			
	 Intermediary Bank:
                                        
    
	  	 Transit (ABA) #:
                                        
                

  
 For Further Credit
to:
                                        
                                        
                                        
                                   
  
 Special Instruction:
                                        
                                        
                                        
                                      
  
 By signing below, I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us). 
  

			
	 Authorized Signature:
                                        
                    
	  	 2nd Signature (If Required):
                                    
 

	 Print Name/Title:
                                        
                             
	  	 Print Name/Title:
                                        
               

	 Telephone #
                                        
                                    
	  	 Telephone #
                                        
                      

 Schedule to Loan and Security Agreement 
  

			
	The exact correct corporate name of Borrower is (attach a copy of the formation documents, e.g., articles, partnership agreement):
                                        
                                    	  	 
		
	Borrower’s State of formation:
                                        
                                    	  	 
		
	Borrower has operated under only the following other names (if none, so state):	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	
	All other address at which the Borrower does business are as follows (attach additional sheets if necessary and include all warehouse addresses):
	                                       
                                        
                                        
                                        
                                        
     
	  	 
		
	Borrower has deposit accounts and/or investment accounts located only at the following institutions:	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	List Acct.
Numbers:                                      
                                        
                                        
                                        
      	  	 
		
	Liens existing on the Effective Date and disclosed to and accepted by Bank in writing:	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
		
	Investments existing on the Effective Date and disclosed to and accepted by Bank in writing:	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
		
	Subordinated Debt:	  	 
		
	Indebtedness on the Effective Date and disclosed to and consented to by Bank in writing:	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	                                       
                                        
                                        
                                        
                                        
     
	  	 
	Borrower is not subject to litigation which would have a material adverse effect on the Borrower’s financial condition, except the following (attach additional comments, if
needed):	  	 
	                                       
                                        
                                        
                                        
                                        
                   

	                                       
                                        
                                        
                                        
                                        
                   

		
	Tax ID Number
                                        
                    	  	 
		
	Organizational Number, if
any:                                    	  	 

  
  
  
  
  
  
  

 2 

 EXHIBIT C 
 BORROWING BASE CERTIFICATE 
  

					
	 Borrower: Pharsight Corporation
	  	 Bank:
	  	 Silicon Valley Bank

	 	  	 	  	 3003 Tasman Drive

	 	  	 	  	 Santa Clara, CA 95054

	 Commitment Amount: $3,000,000
	  	 	  	 

  

									
	 ACCOUNTS RECEIVABLE
	  	 	 	  	 	 
	 1.
	  	Accounts Receivable Book Value as of             	  	 	 	  	$	                        
	 2.
	  	Additions (please explain on reverse)	  	 	 	  	$	                        
	 3.
	  	TOTAL ACCOUNTS RECEIVABLE	  	 	 	  	$	                        
			
	 ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
	  	 	 	  	 	 
	 4.
	  	Amounts over 90 days due	  	$	                        	  	 	 
	 5.
	  	Balance of 50% over 90 day accounts	  	$	                        	  	 	 
	 6.
	  	Credit balances over 90 days	  	$	                        	  	 	 
	 7.
	  	Concentration Limits	  	$	                        	  	 	 
	 8.
	  	Foreign Accounts	  	$	                        	  	 	 
	 9.
	  	Governmental Accounts	  	$	                        	  	 	 
	 10.
	  	Contra Accounts	  	$	                        	  	 	 
	 11.
	  	Promotion or Demo Accounts	  	$	                        	  	 	 
	 12.
	  	Intercompany/Employee Accounts	  	$	                        	  	 	 
	 13.
	  	Other (please explain on reverse)	  	$	                        	  	 	 
	 14.
	  	TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS	  	 	 	  	$	                        
	 15.
	  	Eligible Accounts (#3 minus #14 )	  	 	 	  	$	                        
	 16.
	  	LOAN VALUE OF ACCOUNTS (80% of #15)	  	 	 	  	$	                        
			
	 BALANCES
	  	 	 	  	 	 
	 17.
	  	Maximum Loan Amount	  	$	                        	  	 	 
	 18.
	  	Total Funds Available [Lesser of #17 or #16]	  	 	 	  	$	                        
	 19.
	  	Present balance owing on Line of Credit	  	$	                        	  	 	 
	 20.
	  	Outstanding under Sublimits (none)	  	$	                        	  	 	 
	 21.
	  	RESERVE POSITION (#18 minus #19 and #20)	  	 	 	  	$	                        

  
 The undersigned represents and
warrants that this is true, complete and correct, and that the information in this Borrowing Base Certificate complies with the representations and warranties in the Amended and Restated Loan and Security Agreement between the undersigned and
Silicon Valley Bank. 
  
 COMMENTS:

  

			
	 Pharsight Corporation

		
	 By:
	 	  

	 	 	 Authorized Signer

  

	
	BANK USE ONLY
	
	 Rec’d By:

	Auth. Signer
	
	 Date:

	
	 Verified:

	Auth. Signer
	
	 Date:

	
	  

 EXHIBIT D 
 COMPLIANCE CERTIFICATE 
  

			
	 TO:
	 	 SILICON VALLEY BANK

	 	 	 3003 Tasman Drive

	 	 	 Santa Clara, CA 95054

		
	 FROM:
	 	 PHARSIGHT CORPORATION

  
 The undersigned
Responsible Officer of Pharsight Corporation (“Borrower”) certifies that under the terms and conditions of the Amended and Restated Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in
complete compliance for the period ending                              with all required covenants
except as noted below and (ii) all representations and warranties in the Agreement are true and correct in all material respects on this date. In addition, the undersigned certifies that Borrower, and each Subsidiary, has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP. Attached are the required documents supporting the certification. The Officer certifies that
these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Responsible Officer acknowledges that no
borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. 
  
 Please indicate compliance status by circling Yes/No under
“Complies” column. 
  

							
	 Reporting Covenant

	  	 Required

	  	Complies

	 Monthly financial statements + CC
	  	 Monthly within 30 days
	  	Yes	  	No
	 Annual (Audited)
	  	 FYE within 5 days after filing with SEC
	  	Yes	  	No
	 A/R & A/P Agings, deferred revenue schedules
	  	 Monthly within 20 days
	  	Yes	  	No
	 A/R Audit
	  	 Semi-Annual
	  	Yes	  	No
	 Borrowing Base Certificate
	  	 Monthly within 20 days
	  	Yes	  	No
	 Board of Directors approved operating plan
	  	 Annually by April 30th
	  	Yes	  	No

  

											
	 Financial Covenant

	  	Required

	 	 	Actual

	  	Complies

	 Maintain on a Monthly Basis (unless otherwise noted): Minimum Quick Ratio (Adjusted)
	  	 	*	 	 	            :1.00	  	Yes	  	No
	 Profitability (Quarterly)
	  	$	1.00	**	 	 	  	Yes	  	No

	 *	A ratio of cash and cash equivalents plus accounts receivables divided by Current Liabilities minus Deferred Revenue of at least (i) 1.50 to 1.00 for the months ending April 30,
2004; May 31, 2004, June 30, 2004 and July 31, 2004; (ii) 1.75 to 1.00 for the months ending August 31, 2004, September 30, 2004, October 31, 2004 and November 30, 2004 and (iii) 2.00 to 1.00 for the months ending December 31, 2004 and thereafter.

	**	Borrower may suffer a loss not to exceed $500,000 for quarter ending June 30, 2004. 

  
 Borrower only has deposit accounts located at the following
institutions:                                      
                      . 

	
	 Comments Regarding Exceptions: See Attached.

	
	 Sincerely,

	
	 Pharsight Corporation

	  

	 SIGNATURE

	  

	 TITLE

	  

	 DATE

  

	
	BANK USE ONLY
	
	 Received by:

	AUTHORIZED SIGNER
	
	 Date:

	
	 Verified:

	AUTHORIZED SIGNER
	
	 Date:

	
	 Compliance Status:
                                Yes       
 No

  

 2 

 

 
  
 SILICON VALLEY BANK

  
 PRO FORMA INVOICE FOR LOAN CHARGES 
  

							
	BORROWER:	  	Pharsight Corporation	  	 	 
			
	LOAN OFFICER:	  	Ron Kundich	  	 	 
			
	DATE:	  	May 17, 2004	  	 	 
			
	 	  	 Revolving Loan Fee
	  	$	10,500.00	 
	 	  	 Credit Report
	  	 	35.00	 
	 	  	 UCC Search Fee
	  	 	300.00	 
	 	  	 UCC Filing Fee
	  	 	100.00	 
	 	  	 Documentation Fee
	  	 	1,500.00	 
			
	 	  	 Less Good Faith Deposit:
	  	 	(10,000.00	)
			
	 	  	 TOTAL FEE DUE
	  	$	2,435.00	 
	 	  	 	  	
	
	

  
 Please indicate the method of
payment: 
  

	 	{    }	A check for the total amount is attached. 

  

	 	{    }	Debit DDA #              for the total amount. 

  

	 	{    }	Loan proceeds 

  

			
	Borrower:
		
	 By:
	 	

	 	 	 (Authorized Signer)

  

			
	Silicon Valley Bank	 	(Date)
	
	Account Officer’s Signature

 CORPORATE BORROWING RESOLUTION 
  

							
	Borrower:	  	Pharsight Corporation	  	Bank:	  	Silicon Valley Bank
	 	  	800 West El Camino Real, Suite 200 	  	 	  	3003 Tasman Drive
	 	  	Mountain View, CA 94040	  	 	  	Santa Clara, CA 95054-1191

  
 I, the Secretary or Assistant
Secretary of Pharsight Corporation (“Borrower”), CERTIFY that Borrower is a corporation existing under the laws of the State of Delaware. 
  
 I certify that at a meeting of Borrower’s Directors (or by other authorized corporate action) duly held the following resolutions were adopted. 
  
 It is resolved that any one of the following officers of Borrower, whose name, title
and signature is below: 
  

					
	 NAMES

	  	 POSITIONS

	  	 ACTUAL SIGNATURES

	 Cynthia Stephens

	  	 SVP & CFO

	  	 /s/ Cynthia Stephens

	
	  	
	  	

	
	  	
	  	

	
	  	
	  	

  
 may act for Borrower and: 

 
 Borrow Money. Borrow money from Silicon Valley
Bank (“Bank”). 
  
 Execute Loan
Documents. Execute any loan documents Bank requires. 
  
 Grant Security. Grant Bank a security interest in any of Borrower’s assets. 
  
 Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and
receive cash or otherwise use the proceeds. 
  
 Letters of Credit. Apply for letters of credit from Bank. 
  
 Foreign Exchange Contracts. Execute spot or forward foreign exchange contracts. 
  
 Issue Warrants. Issue warrants for Borrower’s stock. 
  
 Further Acts. Designate other individuals to request advances, pay fees and costs and execute other documents or
agreements (including documents or agreement that waive Borrowers right to a jury trial) they think necessary to effectuate these Resolutions. 
  
 Further resolved that all acts authorized by these Resolutions and performed before they were adopted are ratified. These Resolutions remain in effect and Bank may
rely on them until Bank receives written notice of their revocation. 
  
 I
certify that the persons listed above are Borrower’s officers with the titles and signatures shown following their names and that these resolutions have not been modified are currently effective. 

 CERTIFIED TO AND ATTESTED BY: 
  

			
	 X
	 	 /s/ Cynthia Stephens

	     *Secretary or Assistant Secretary

		
	 X
	 	 /s/ Shawn O’Connor

	*	NOTE: In case the Secretary or other certifying officer is designated by the foregoing resolutions as one of the signing officers, this resolution should also be signed by a second
Officer or Director of Borrower. 

  

 2 

 Exhibit “F” 
  
 NEGATIVE PLEDGE AGREEMENT 
  
 This Negative Pledge Agreement is made as of the Effective Date by and between Pharsight Corporation (“Borrower”) and Silicon Valley Bank (“Bank”).

  
 In connection with, among other documents, the Amended and Restated Loan and
Security Agreement (the “Loan Documents”) being concurrently executed herewith between Borrower and Bank, Borrower agrees as follows: 
  

	 	1.	Except for non-exclusive licenses granted in the ordinary course of business, Borrower shall not sell, transfer, assign, mortgage, pledge, lease, grant a security interest in, or
encumber any of Borrower’s intellectual property, including, without limitation, the following: 

  

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

  

	 	b.	All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired; 

  

	 	c.	Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held;

  

	 	d.	Any and all design rights which may be available to Borrower now or hereafter existing, created, acquired or held; 

  

	 	e.	All patents, patent applications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part
of the same, including without limitation the patents and patent applications; 

  

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

  

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

  

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

  

	 	i.	All amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works; and 

  

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

  

 3 

	 	2.	It shall be an event of default under the Loan Documents between Borrower and Bank if there is a breach of any term of this Negative Pledge Agreement. 

  

	 	3.	Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Documents. 

  
 BORROWER: 
  
 Pharsight Corporation 
  

					
	 By:
	 	 /s/ Cynthia Stephens             5-24-04

	 Title:
	 	 SVP & CFO

  
 BANK: 
  
 SILICON VALLEY BANK 
  

			
	 By:
	 	 /s/ Ron Kundich

	 Name:
	 	 Ron Kundich

	 Title:
	 	 VP

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]