SILICON VALLEY BANK



                           LOAN AND SECURITY AGREEMENT

                                 (EXIM PROGRAM)



BORROWER: GENUS, INC.

ADDRESS: 1139 KARLSTAD DR.

     SUNNYVALE, CA 94089







DATE:    NOVEMBER    , 2001

                 ----





THIS  LOAN  AND  SECURITY  AGREEMENT  is  entered into on the above date between

SILICON  VALLEY BANK,  COMMERCIAL FINANCE DIVISION ("Silicon"), whose address is

3003  Tasman  Drive,  Santa  Clara,  California  95054 and the borrower(s) named

above  (the  "Borrower"),  whose  chief executive office is located at the above

address ("Borrower's Address").  The Schedule to this Agreement (the "Schedule")

shall for all purposes be deemed to be a part of this Agreement, and the same is

an  integral part of this Agreement.  (Definitions of certain terms used in this

Agreement  are  set  forth  in  Section  8  below.)



                                  1.     LOANS.



  1.1  LOANS.  Silicon  will  make  loans  to Borrower (the "Loans"), in amounts

determined by Silicon in its * , up to the amounts (the "Credit Limit") shown on

the  Schedule,  provided  no  Default  or  Event  of Default has occurred and is

continuing,  and  subject  to deduction of any Reserves for accrued interest and

such  other  Reserves  as  Silicon  deems  proper  from  time  to  time.



  *GOOD  FAITH  BUSINESS  JUDGMENT



  1.2 INTEREST. All Loans and all other monetary Obligations shall bear interest

at  the  rate  shown  on  the  Schedule, except where expressly set forth to the

contrary  in this Agreement.  Interest shall be payable monthly, on the last day

of  the  month.  Interest may, in Silicon's discretion, be charged to Borrower's

loan  account,  and  the same shall thereafter bear interest at the same rate as

the  other Loans.  Silicon may, in its discretion, charge interest to Borrower's

Deposit  Accounts  maintained  with  Silicon.  Regardless  of  the  amount  of

Obligations  that  may  be  outstanding  from  time  to time, Borrower shall pay

Silicon minimum monthly interest during the term of this Agreement in the amount

set  forth  on  the  Schedule  (the  "Minimum  Monthly  Interest").



  1.3  OVERADVANCES.  If  at  any  time  or  for  any  reason  the  total of all

outstanding  Loans  and  all  other  Obligations  exceeds  the  Credit Limit (an

"Overadvance"),  Borrower  shall  immediately  pay  the  amount of the excess to

Silicon,  without  notice  or  demand. Without limiting Borrower's obligation to

repay to Silicon on demand the amount of any Overadvance, Borrower agrees to pay

Silicon  interest  on the outstanding amount of any Overadvance, on demand, at a

rate  equal  to  the  interest  rate  which would otherwise be applicable to the

Overadvance,  plus  an  additional  2%  per  annum.



  1.4  FEES.  Borrower shall pay Silicon the fee(s) shown on the Schedule, which

are  in  addition  to all interest and other sums payable to Silicon and are not

refundable.



  1.5  LETTERS  OF  CREDIT. At the request of Borrower, Silicon may, in its sole

discretion,  issue  or  arrange  for  the  issuance of letters of credit for the

account  of Borrower, in each case in form and substance satisfactory to Silicon

in  its sole discretion (collectively, "Letters of Credit").  The aggregate face

amount  of  all outstanding Letters of Credit from time to time shall not exceed

the amount shown on the Schedule (the "Letter of Credit Sublimit"), and shall be

reserved  against Loans which would otherwise be available hereunder, and in the

event  at  any  time there are insufficient Loans available to Borrower for such

reserve,  Borrower shall deposit and maintain with Silicon cash collateral in an

amount  at all times equal to such deficiency, which shall be held as Collateral

for  all  purposes  of  this  Agreement.  Borrower  shall  pay  all bank charges

(including * charges of Silicon) for the issuance of Letters of Credit, together

with  such  additional fee as Silicon's letter of credit department shall charge

in connection with the issuance of the Letters of Credit. Any payment by Silicon

under or in connection with a Letter of Credit shall constitute a Loan hereunder

on  the  date  such  payment is made. Each Letter of Credit shall have an expiry

date  no  later  than  thirty  days  prior  to  the  Maturity





                                       82

{PAGE}

Date.  Borrower hereby agrees to indemnify, save, and hold Silicon harmless from

any  loss,  cost,  expense,  or  liability,  including payments made by Silicon,

expenses,  and  reasonable attorneys' fees incurred by Silicon arising out of or

in  connection  with  any  Letters of Credit. Borrower agrees to be bound by the

regulations  and  interpretations  of  the  issuer  of  any  Letters  of  Credit

guarantied  by  Silicon  and  opened  for  Borrower's  account  or  by Silicon's

interpretations  of  any  Letter  of  Credit  issued  by  Silicon for Borrower's

account,  and  Borrower  understands and agrees that Silicon shall not be liable

for  any  error,  negligence,  or mistake, whether of omission or commission, in

following Borrower's instructions or those contained in the Letters of Credit or

any modifications, amendments, or supplements thereto. Borrower understands that

Letters  of Credit may require Silicon to indemnify the issuing bank for certain

costs  or  liabilities  arising  out  of claims by Borrower against such issuing

bank. Borrower hereby agrees to indemnify and hold Silicon harmless with respect

to any loss, cost, expense, or liability incurred by Silicon under any Letter of

Credit  as  a  result of Silicon's indemnification of any such issuing bank. The

provisions  of this Loan Agreement, as it pertains to Letters of Credit, and any

other  present  or  future  documents or agreements between Borrower and Silicon

relating  to  Letters  of  Credit  are  cumulative.



  *CUSTOMARY



                              2. SECURITY INTEREST.



  2.1  SECURITY  INTEREST.  To  secure  the  payment  and  performance of all of

the  Obligations when due, Borrower hereby grants to Silicon a security interest

in  all  of Borrower's interest in the following, whether now owned or hereafter

acquired,  and  wherever  located:  All  Inventory,  Equipment, Receivables, and

General  Intangibles,  including,  without limitation, all of Borrower's Deposit

Accounts,  and  all  money, and all property now or at any time in the future in

Silicon's  possession  (including  claims and credit balances), and all proceeds

(including  proceeds  of any insurance policies, proceeds of proceeds and claims

against third parties), all products and all books and records related to any of

the  foregoing  (all of the foregoing, together with all other property in which

Silicon  may  now  or  in  the future be granted a lien or security interest, is

referred  to  herein,  collectively,  as  the  "Collateral").



            3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.



  In  order  to  induce  Silicon to enter into this Agreement and to make Loans,

Borrower  represents  and warrants to Silicon as follows, and Borrower covenants

that  the  following representations will continue to be true, and that Borrower

will  at  all  times  comply  with  all  of  the  following  covenants:



  3.1 CORPORATE EXISTENCE AND AUTHORITY. Borrower, if a corporation, is and will

continue  to be, duly organized, validly existing and in good standing under the

laws of the jurisdiction of its incorporation.  Borrower is and will continue to

be  qualified  and  licensed  to  do  business in all jurisdictions in which any

failure  to  do  so  would  have  a  material  adverse  effect on Borrower.  The

execution, delivery and performance by Borrower of this Agreement, and all other

documents  contemplated  hereby  (i) have been duly and validly authorized, (ii)

are  enforceable  against  Borrower  in  accordance  with their terms (except as

enforcement  may  be  limited  by  equitable  principles  and  by  bankruptcy,

insolvency,  reorganization,  moratorium  or similar laws relating to creditors'

rights  generally),  and (iii) do not violate Borrower's articles or certificate

of  incorporation,  or Borrower's by-laws, or any law or any  material agreement

or  instrument  which  is binding upon Borrower or its property, and (iv) do not

constitute  grounds  for acceleration of any material indebtedness or obligation

under any material agreement or instrument which is binding upon Borrower or its

property.



  3.2  NAME;  TRADE  NAMES  AND  STYLES.  The  name of Borrower set forth in the

heading  to  this  Agreement is its correct name. Listed on the Schedule are all

prior  names  of  Borrower  and all of Borrower's present and prior trade names.

Borrower  shall  give  Silicon 30 days' prior written notice before changing its

name  or doing business under any other name. Borrower has complied, and will in

the  future  comply,  with  all laws relating to the conduct of business under a

fictitious  business  name.



  3.3  PLACE  OF  BUSINESS; LOCATION OF COLLATERAL. The address set forth in the

heading  to  this  Agreement is Borrower's chief executive office.  In addition,

Borrower  has places of business and Collateral is located only at the locations

set  forth  on  the Schedule.  Borrower will give Silicon at least 30 days prior

written  notice  before  opening  any additional place of business, changing its

chief executive office, or moving any of the Collateral to a location other than

Borrower's  Address  or  one  of  the  locations  set  forth  on  the Schedule*.



  *EXCEPT  FOR  DEMONSTRATIONS  OF  INVENTORY IN THE ORDINARY COURSE OF BUSINESS



  3.4  TITLE  TO COLLATERAL; PERMITTED LIENS. * Borrower is now, and will at all

times  in  the future be, the sole owner of all the Collateral, except for items

of Equipment which are leased by Borrower. The Collateral now is and will remain

free  and  clear  of  any  and  all  liens,  charges,  security  interests,

encumbrances  and  adverse claims, except for Permitted Liens.  Silicon now has,

and  will  continue to have, a first-priority perfected and enforceable security

interest  in  all  of  the  Collateral, subject only to the Permitted Liens, and

Borrower  will at all times defend Silicon and the Collateral against all claims

of  others.  None  of  the  Collateral  now  is  or  will be affixed to any real

property  in  such  a  manner,  or  with  such intent, as to become a fixture**.

Borrower  is  not  and  will  not  become a lessee under any real property lease

pursuant  to  which  the  lessor





                                       83

{PAGE}

may  obtain any rights in any of the Collateral and no such lease now prohibits,

restrains,  impairs  or  will  prohibit,  restrain or impair Borrower's right to

remove  any  Collateral  from  the  leased  premises. Whenever any Collateral is

located  upon  premises  in  which  any  third party has an interest (whether as

owner,  mortgagee,  beneficiary  under  a  deed  of  trust,  lien or otherwise),

Borrower  shall,  whenever  requested  by Silicon, use its best efforts to cause

such  third  party  to  execute  and  deliver  to Silicon, in form acceptable to

Silicon,  such  waivers  and  subordinations  as Silicon shall specify, so as to

ensure  that  Silicon's  rights  in the Collateral are, and will continue to be,

superior to the rights of any such third party. Borrower will keep in full force

and  effect,  and  will comply with all the terms of, any lease of real property

where  any  of  the  Collateral  now  or  in  the  future  may  be  located.



  *EXCEPT  AS  OTHERWISE  PERMITTED  BY  THIS  AGREEMENT,



  **EXCEPT  FOR  CUSTOMARY  LEASEHOLD  IMPROVEMENTS



  3.5  MAINTENANCE  OF COLLATERAL. Borrower will maintain the Collateral in good

working  condition,  and  Borrower  will not use the Collateral for any unlawful

purpose.  Borrower  will  immediately  advise Silicon in writing of any material

loss  or  damage  to  the  Collateral.



  3.6 BOOKS AND RECORDS. Borrower has maintained and will maintain at Borrower's

Address complete and accurate books and records, comprising an accounting system

in  accordance  with  generally  accepted  accounting  principles.



  3.7  FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial statements now

or  in  the  future  delivered  to  Silicon  have been, and will be, prepared in

conformity  with  generally  accepted  accounting  principles and now and in the

future  will  completely  and  accurately  reflect  the  financial  condition of

Borrower, at the times and for the periods therein stated. Between the last date

covered by any such statement provided to Silicon and the date hereof, there has

been  no  material  adverse  change  in  the  financial condition or business of

Borrower.  Borrower  is  now  and  will  continue  to  be  solvent.



  3.8  TAX  RETURNS  AND  PAYMENTS;  PENSION  CONTRIBUTIONS. Borrower has timely

filed,  and  will  timely file, all tax returns and reports required by foreign,

federal, state and local law, and Borrower has timely paid, and will timely pay,

all  foreign,  federal,  state  and  local  taxes,  assessments,  deposits  and

contributions  now  or  in  the future owed by Borrower.  Borrower may, however,

defer  payment  of any contested taxes, provided that Borrower (i) in good faith

contests  Borrower's  obligation  to  pay  the  taxes by appropriate proceedings

promptly  and  diligently  instituted  and  conducted,  (ii) notifies Silicon in

writing  of  the  commencement  of,  and  any  material  development  in,  the

proceedings, and (iii) posts bonds or takes any other steps required to keep the

contested  taxes  from  becoming a lien upon any of the Collateral.  Borrower is

unaware  of  any  claims or adjustments proposed for any of Borrower's prior tax

years  which  could  result  in  additional  taxes  becoming  due and payable by

Borrower.  Borrower has paid, and shall continue to pay all amounts necessary to

fund  all  present  and future pension, profit sharing and deferred compensation

plans in accordance with their terms, and Borrower has not and will not withdraw

from  participation in, permit partial or complete termination of, or permit the

occurrence  of any other event with respect to, any such plan which could result

in  any  liability  of  Borrower, including any liability to the Pension Benefit

Guaranty  Corporation  or  its  successors  or  any  other  governmental agency.

Borrower shall, at all times, utilize the services of an outside payroll service

providing  for  the  automatic deposit of all payroll taxes payable by Borrower.



  3.9  COMPLIANCE  WITH  LAW.  *  Borrower has complied, and will comply, in all

material  respects, with all provisions of all foreign, federal, state and local

laws  and regulations relating to Borrower, including, but not limited to, those

relating  to  Borrower's ownership of real or personal property, the conduct and

licensing  of  Borrower's  business,  and  all  environmental  matters.



  *TO  THE  BEST  OF  ITS  KNOWLEDGE,



  3.10 LITIGATION. Except as disclosed in the Schedule, there is no claim, suit,

litigation,  proceeding  or  investigation  pending  or  (to  best of Borrower's

knowledge) threatened by or against or affecting Borrower in any court or before

any  governmental  agency  (or  any  basis  therefor  known to Borrower) which *

result, either separately or in the aggregate, in any material adverse change in

the  financial  condition or business of Borrower, or in any material impairment

in  the  ability  of Borrower to carry on its business in substantially the same

manner  as  it is now being conducted.  Borrower will promptly inform Silicon in

writing  of  any  claim,  proceeding,  litigation or investigation in the future

threatened  or  instituted  by or against Borrower involving any single claim of

$50,000  or  more,  or  involving  $100,000  or  more  in  the  aggregate.



  *COULD  BE  REASONABLY  EXPECTED  TO



  3.11  USE  OF  PROCEEDS.  All  proceeds  of all Loans shall be used solely for

lawful  business  purposes.  Borrower  is not purchasing or carrying any "margin

stock"  (as  defined  in  Regulation  U of the Board of Governors of the Federal

Reserve System) and no part of the proceeds of any Loan will be used to purchase

or  carry  any  "margin  stock" or to extend credit to others for the purpose of

purchasing  or  carrying  any  "margin  stock."



                                4. RECEIVABLES.



     4.1  REPRESENTATIONS  RELATING  TO  RECEIVABLES.  Borrower  represents  and

warrants to Silicon as follows:  Each Receivable with respect to which Loans are

requested  by  Borrower  shall, on the date each Loan is requested and made, (i)

represent  an  undisputed  bona  fide  existing  unconditional obligation of the





                                       84

{PAGE}

Account  Debtor  created  by  the sale, delivery, and acceptance of goods or the

rendition  of  services  in the ordinary course of Borrower's business, and (ii)

meet  the  Minimum  Eligibility  Requirements  set  forth  in  Section  8 below.



  4.2  REPRESENTATIONS  RELATING  TO  DOCUMENTS  AND  LEGAL COMPLIANCE. Borrower

represents  and  warrants  to  Silicon  as  follows: All statements made and all

unpaid  balances  appearing  in  all  invoices,  instruments and other documents

evidencing  the  Receivables  are  and  shall  be  true and correct and all such

invoices,  instruments  and  other  documents  and  all  of Borrower's books and

records  are  and  shall be genuine and in all respects what they purport to be,

and  all  signatories and endorsers have the capacity to contract. All sales and

other  transactions  underlying  or  giving  rise to each Receivable shall fully

comply  with  all  applicable  laws  and governmental rules and regulations. All

signatures  and  endorsements  on  all  documents,  instruments,  and agreements

relating  to  all  Receivables are and shall be genuine, and all such documents,

instruments  and  agreements  are and shall be legally enforceable in accordance

with  their  terms.



  4.3 SCHEDULES AND DOCUMENTS RELATING TO RECEIVABLES. Borrower shall deliver to

Silicon  transaction reports and loan requests, schedules and assignments of all

Receivables,  and  schedules  of  collections,  all on Silicon's standard forms;

provided, however, that Borrower's failure to execute and deliver the same shall

not  affect  or  limit  Silicon's  security  interest and other rights in all of

Borrower's Receivables, nor shall Silicon's failure to advance or lend against a

specific Receivable affect or limit Silicon's security interest and other rights

therein.  Loan  requests  received  after  12:00  Noon will not be considered by

Silicon  until  the  next  Business  Day.  Together  with each such schedule and

assignment,  or  later  if  requested by Silicon, Borrower shall furnish Silicon

with  copies  (or,  at  Silicon's  request, originals) of all contracts, orders,

invoices,  and  other similar documents, and all original shipping instructions,

delivery  receipts,  bills  of  lading,  and other evidence of delivery, for any

goods  the  sale  or  disposition  of  which  gave rise to such Receivables, and

Borrower  warrants the genuineness of all of the foregoing.  Borrower shall also

furnish to Silicon an aged accounts receivable trial balance in such form and at

such  intervals  as Silicon shall  request.  In addition, Borrower shall deliver

to Silicon the originals of all instruments, chattel paper, security agreements,

guarantees  and  other  documents  and  property  evidencing  or  securing  any

Receivables,  immediately upon receipt thereof and in the same form as received,

with  all necessary indorsements, all of which shall be with recourse.  Borrower

shall also provide Silicon with copies of all credit memos within two days after

the  date  issued.



  4.4  COLLECTION  OF  RECEIVABLES. Borrower shall have the right to collect all

Receivables,  unless  and  until a Default or an Event of Default has occurred*.

Borrower  shall  hold all payments on, and proceeds of, Receivables in trust for

Silicon,  and  Borrower shall immediately deliver all such payments and proceeds

to  Silicon in their original form, duly endorsed in blank, to be applied to the

Obligations  in  such  order  as  Silicon  shall  determine. Silicon may, in its

discretion,  require  that  all  proceeds of Collateral be deposited by Borrower

into  a lockbox account, or such other "blocked account" as Silicon may specify,

pursuant  to  a  blocked  account agreement in such form as Silicon may specify.

**Silicon  or  its  designee  may,  at any time, notify Account Debtors that the

Receivables  have  been  assigned  to  Silicon.



  *AND  IS  CONTINUING



  **AFTER  THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT OR AN EVENT OF

DEFAULT



  4.5.  REMITTANCE OF PROCEEDS. All proceeds arising from the disposition of any

Collateral  shall  be delivered, in kind, by Borrower to Silicon in the original

form  in  which  received  by Borrower not later than the following Business Day

after  receipt  by  Borrower,  to be applied to the Obligations in such order as

Silicon  shall  determine;  provided that, if no Default or Event of Default has

occurred*,  Borrower  shall not be obligated to remit to Silicon the proceeds of

the sale of worn out or obsolete equipment disposed of by Borrower in good faith

in  an  arm's  length  transaction for an aggregate purchase price of $25,000 or

less  (for  all  such  transactions in any fiscal year). Borrower agrees that it

will  not commingle proceeds of Collateral with any of Borrower's other funds or

property,  but  will hold such proceeds separate and apart from such other funds

and property and in an express trust for Silicon. Nothing in this Section limits

the  restrictions  on  disposition  of  Collateral  set  forth elsewhere in this

Agreement.



  *AND  IS  CONTINUING



  4.6 DISPUTES. Borrower shall notify Silicon promptly of all disputes or claims

relating  to Receivables.  Borrower shall not forgive (completely or partially),

compromise  or  settle any Receivable for less than payment in full, or agree to

do  any  of  the  foregoing,  except that Borrower may do so, provided that: (i)

Borrower  does  so  in  good  faith, in a commercially reasonable manner, in the

ordinary  course  of  business,  and  in  arm's  length  transactions, which are

reported  to Silicon on the regular reports provided to Silicon; (ii) no Default

or  Event  of  Default  has  occurred  and  is continuing; and (iii) taking into

account  all  such  discounts settlements and forgiveness, the total outstanding

Loans  will  not  exceed  the  Credit Limit.  Silicon may, at any time after the

occurrence  *  of  an  Event  of  Default,  settle  or adjust disputes or claims

directly with Account Debtors for amounts and upon terms which Silicon considers

advisable  in  its





                                       85

{PAGE}

reasonable  credit  judgment  and, in all cases, Silicon shall credit Borrower's

Loan  account  with  only  the net amounts received by Silicon in payment of any

Receivables.



  *AND  DURING  THE  CONTINUANCE



  4.7  RETURNS.  Provided no Event of Default has occurred and is continuing, if

any  Account  Debtor returns any Inventory to Borrower in the ordinary course of

its  business,  Borrower shall promptly determine the reason for such return and

promptly  issue  a  credit  memorandum  to the Account Debtor in the appropriate

amount  (sending  a  copy to Silicon).  In the event any attempted return occurs

after  the  occurrence  *  of  any Event of Default, Borrower shall (i) hold the

returned  Inventory  in trust for Silicon, (ii) segregate all returned Inventory

from  all  of  Borrower's other property, (iii) conspicuously label the returned

Inventory  as  Silicon's  property,  and  (iv) immediately notify Silicon of the

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC