INTEGRATED SENSOR SOLUTIONS, INC. LOAN AND SECURITY AGREEMENT

INTEGRATED SENSOR SOLUTIONS, INC.

LOAN AND SECURITY AGREEMENT

TABLE OF CONTENTS
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1. DEFINITIONS AND CONSTRUCTION . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . 7

2. LOAN AND TERMS OF PAYMENT . . . . . . . . . . . . . . . . . . . . . 7
2.1 Revolving Credit Facility. . . . . . . . . . . . . . . . . . 7
2.2 Overadvances . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Interest Rates, Payments, and Calculations . . . . . . . . . 8
2.4 Crediting Payments . . . . . . . . . . . . . . . . . . . . . 9
2.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 Additional Costs . . . . . . . . . . . . . . . . . . . . . . 9
2.7 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

3. CONDITIONS OF LOANS . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 Conditions Precedent to Initial Credit Extension . . . . . . 10
3.2 Conditions Precedent to all Credit Extensions. . . . . . . . 10

4. CREATION OF SECURITY INTEREST . . . . . . . . . . . . . . . . . . . 10
4.1 Grant of Security Interest . . . . . . . . . . . . . . . . . 11
4.2 Delivery of Additional Documentation Required. . . . . . . . 11
4.3 Right to Inspect . . . . . . . . . . . . . . . . . . . . . . 11

5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . 11
5.1 Due Organization and Qualification . . . . . . . . . . . . . 11
5.2 Due Authorization; No Conflict . . . . . . . . . . . . . . . 11
5.3 No Prior Encumbrances. . . . . . . . . . . . . . . . . . . . 11
5.4 Bona Fide Eligible Accounts. . . . . . . . . . . . . . . . . 11
5.5 Merchantable Inventory . . . . . . . . . . . . . . . . . . . 11
5.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8 No Material Adverse Change in Financial Statements . . . . . 12
5.9 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.10 Regulatory Compliance. . . . . . . . . . . . . . . . . . . . 12
5.11 Environmental Condition. . . . . . . . . . . . . . . . . . . 12
5.12 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.13 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 12
5.14 Government Consents. . . . . . . . . . . . . . . . . . . . . 12
5.15 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . 12

6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 Good Standing. . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Government Compliance. . . . . . . . . . . . . . . . . . . . 13
6.3 Financial Statements, Reports, Certificates. . . . . . . . . 13
6.4 Inventory; Returns . . . . . . . . . . . . . . . . . . . . . 13
6.5 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.6 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.7 Principal Depository . . . . . . . . . . . . . . . . . . . . 14
6.8 Quick Ratio. . . . . . . . . . . . . . . . . . . . . . . . . 14
6.9 Quick Ratio (Consolidated) . . . . . . . . . . . . . . . . . 14
6.10 Debt-Net Worth Ratio . . . . . . . . . . . . . . . . . . . . 14
6.11 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . 14
6.12 Profitability. . . . . . . . . . . . . . . . . . . . . . . . 14
6.13 Equity Infusion. . . . . . . . . . . . . . . . . . . . . . . 14

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TABLE OF CONTENTS
(continued)
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6.14 Zero Balance . . . . . . . . . . . . . . . . . . . . . . . . 15
6.15 Further Assurances . . . . . . . . . . . . . . . . . . . . . 15

7. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Dispositions . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2 Change in Business . . . . . . . . . . . . . . . . . . . . . 15
7.3 Mergers or Acquisitions. . . . . . . . . . . . . . . . . . . 15
7.4 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 15
7.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . 15
7.6 Distributions. . . . . . . . . . . . . . . . . . . . . . . . 15
7.7 Investments. . . . . . . . . . . . . . . . . . . . . . . . . 15
7.8 Transactions with Affiliates/Subsidiaries. . . . . . . . . . 15
7.9 Subordinated Debt. . . . . . . . . . . . . . . . . . . . . . 15
7.10 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.11 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 16

8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.1 Payment Default. . . . . . . . . . . . . . . . . . . . . . . 16
8.2 Covenant Default . . . . . . . . . . . . . . . . . . . . . . 16
8.3 Material Adverse Change. . . . . . . . . . . . . . . . . . . 16
8.4 Attachment . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.5 Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.6 Other Agreements . . . . . . . . . . . . . . . . . . . . . . 17
8.7 Subordinated Debt. . . . . . . . . . . . . . . . . . . . . . 17
8.8 Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.9 Misrepresentations . . . . . . . . . . . . . . . . . . . . . 17

9. BANK'S RIGHTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . 17
9.1 Rights and Remedies. . . . . . . . . . . . . . . . . . . . . 17
9.2 Power of Attorney. . . . . . . . . . . . . . . . . . . . . . 18
9.3 Accounts Collection. . . . . . . . . . . . . . . . . . . . . 18
9.4 Bank Expenses. . . . . . . . . . . . . . . . . . . . . . . . 18
9.5 Bank's Liability for Collateral. . . . . . . . . . . . . . . 19
9.6 Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . 19
9.7 Demand; Protest. . . . . . . . . . . . . . . . . . . . . . . 19

10. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. . . . . . . . . . . . . 19

12. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 20
12.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . 20
12.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . . 20
12.3 Time of Essence. . . . . . . . . . . . . . . . . . . . . . . 20
12.4 Severability of Provisions . . . . . . . . . . . . . . . . . 20
12.5 Amendments in Writing, Integration . . . . . . . . . . . . . 20
12.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 20
12.7 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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This LOAN AND SECURITY AGREEMENT is entered into as of July 10, 1996, by
and between SILICON VALLEY BANK ("Bank") and INTEGRATED SENSOR SOLUTIONS, INC.
("Borrower").

RECITALS

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

AGREEMENT

The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION

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

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

"Advance" or "Advances" means an Advance under the Revolving
Facility.

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

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

"Borrower's Books" means all of Borrower's books and records
including: ledgers; records concerning Borrower's assets or liabilities, the
Collateral, business operations or financial condition; and all computer
programs, or tape files, and the equipment, containing such information.

"Borrowing Base" has the meaning set forth in Section 2.1.1
hereof.

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

"Closing Date" means the date of this Agreement.

"Code" means the California Uniform Commercial Code.

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

"Committed Line" means One Million Dollars ($1,000,000).

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

"Credit Extension" means an Advance or Letter of Credit.

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

"Consolidated Quick Assets" means, at any date as of which the
amount thereof shall be determined, the consolidated cash, cash-equivalents,
accounts receivable and investments, with maturities not to exceed 90 days, of
Borrower determined in accordance with GAAP.

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

"Daily Balance" means the amount of the Obligations owed at the
end of a given day.

"Eligible Accounts" means those Accounts that arise in the
ordinary course of Borrower's business that comply with all of Borrower's
representations and warranties to Bank set forth in Section 5.4; PROVIDED, that
standards of eligibility may be fixed and revised from time to time by Bank in
Bank's reasonable judgment and upon notification thereof to Borrower in
accordance with the provisions hereof. Unless otherwise agreed to by Bank,
Eligible Accounts shall not include the following:

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

(b) Accounts with respect to an account debtor, fifty percent
(50%) of whose Accounts the account debtor has failed to pay within ninety (90)
days of invoice date;

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

(e) Accounts with respect to which the account debtor is an
Affiliate of Borrower;

(f) Accounts with respect to which the account debtor does not
have its principal place of business in the United States, except for Eligible
Foreign Accounts;

(g) Accounts with respect to which the account debtor is the
United States or any department, agency, or instrumentality of the United
States;

(h) Accounts with respect to which Borrower is liable to the
account debtor for goods sold or services rendered by the account debtor to
Borrower, but only to the extent of any amounts owing to the account debtor
against amounts owed to Borrower;

(i) Accounts with respect to an account debtor, including
Subsidiaries and Affiliates, whose total obligations to Borrower exceed
twenty-five percent (25%) of all Accounts, to the extent such obligations
exceed the aforementioned percentage, except (i) Accounts with respect to BLD
Products, Inc., Breed Technologies, Inc. and IC Sensors, Inc., for which the
applicable percentage shall be thirty-five percent (35%), and (ii) as
approved in writing by Bank;

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

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

"Eligible Foreign Accounts" means Accounts with respect to which
the account debtor does not have its principal place of business in the
United States and (i) that Bank approves on a case-by-case basis, or (ii) that
are Accounts with respect to which the account debtor is Xxxxxxx Electric Co.
(Honda), Omron Corporation, Nagano Keiki Seisakusho, Matsuda Micronics Corp. or
Nippon Precision Device Corporation.

"Equity Infusion" means the receipt by Borrower of cash proceeds
from the sale of its capital stock or Subordinated Debt, other than in a
nonfinancing transaction to employees, officers, directors or consultants of the
Borrower, in an aggregate amount of no less than Two Million Five Hundred
Thousand Dollars ($2,500,000).

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

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

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

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

"Insolvency Proceeding" means any proceeding commenced by or
against any person or entity under any provision of the United States Bankruptcy
Code, as amended, or under any other bankruptcy or

insolvency law, including assignments for the benefit of creditors, formal or
informal moratoria, compositions, extension generally with its creditors, or
proceedings seeking reorganization, arrangement, or other relief.

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

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

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

"Letter of Credit" has the meaning set forth in Section 2.1.2
hereof.

"Lien" means any mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance.

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

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

"Maturity Date" means the date immediately preceding the first
anniversary date of this Agreement.

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

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

"Periodic Payments" means all installments or similar recurring
payments that Borrower may now or hereafter become obligated to pay to Bank
pursuant to the terms and provisions of any instrument, or agreement now or
hereafter in existence between Borrower and Bank.

"Permitted Indebtedness" means:

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

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

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

"Permitted Investment" means:

(a) Investments existing on the Closing Date disclosed in the
Schedule; and

(b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency or any State thereof
maturing within one (1) year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having the highest rating obtainable from either
Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc., and
(iii) certificates of deposit maturing no more than one (1) year from the date
of investment therein issued by Bank.

"Permitted Liens" means the following:

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

(b) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings, PROVIDED the same have no priority over any of Bank's
security interests;

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

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

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

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

"Quick Assets" means, at any date as of which the amount thereof
shall be determined, the non-consolidated cash, cash-equivalents, accounts
receivable and investments, with maturities not to exceed 90 days, of Borrower
determined in accordance with GAAP.

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

"Revolving Facility" means the facility under which Borrower may
request Bank to issue cash advances, as specified in Section 2.1.1 hereof.

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

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

"Subsidiary" means any corporation or partnership in which
(i) any general partnership interest or (ii) more than 50% of the stock of which
by the terms thereof ordinary voting power to elect the Board of Directors,
managers or trustees of the entity shall, at the time as of which any
determination is being made, be owned by Borrower, either directly or through an
Affiliate.

"Tangible Net Worth" means at any date as of which the amount
thereof shall be determined, the non-consolidated total assets of Borrower
MINUS, without duplication, (i) the sum of any amounts attributable to
(a) goodwill, (b) intangible items such as unamortized debt discount and
expense, patents, trade and service marks and names, copyrights and research and
development expenses except prepaid expenses, and (c) all reserves not already
deducted from assets, AND (ii) Total Liabilities.

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

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

2. LOAN AND TERMS OF PAYMENT

2.1 REVOLVING CREDIT FACILITY.

2.1.1 ADVANCES. Subject to and upon the terms and conditions
of this Agreement, Bank agrees to make Advances to Borrower in an aggregate
amount not to exceed the lesser of (i) the Committed Line MINUS the face amount
of all outstanding Letters of Credit (including drawn but unreimbursed Letters
of Credit) or (ii) the Borrowing Base MINUS the face amount of all outstanding
Letters of Credit (including drawn but unreimbursed Letters of Credit). For
purposes of this Agreement, "Borrowing Base" shall mean an amount equal to
seventy-five percent (75%) of Eligible Accounts. Subject to the terms and
conditions of this Agreement, amounts borrowed pursuant to this Section 2.1.1
may be repaid and reborrowed at any time prior to the Maturity Date.

Whenever Borrower desires an Advance, Borrower will notify Bank by
facsimile transmission or telephone no later than 3:00 p.m. California time, on
the Business Day that the Advance is to be made. Each such notification shall
be promptly confirmed by a Payment/Advance Form in substantially the form of
EXHIBIT B hereto. Bank is authorized to make Advances under this Agreement,
based upon instructions received from a Responsible Officer, or without
instructions if in Bank's discretion such Advances are necessary to meet
Obligations which have become due and remain unpaid. Bank shall be entitled to
rely on any telephonic notice given by a person who Bank reasonably believes to
be a Responsible Officer, and Borrower shall indemnify and hold Bank harmless
for any damages or loss suffered by Bank as a result of such reliance. Bank
will credit the amount of Advances made under this Section 2.1.1 to Borrower's
deposit account.

The Revolving Facility shall terminate on the Maturity Date, at which time
all Advances under this Section 2.1.1 and all other obligations under this
Agreement shall be immediately due and payable.

2.1.2 LETTERS OF CREDIT.

(a) Subject to and upon the terms and conditions of this
Agreement, Bank agrees to issue or cause to be issued letters of credit for the
account of Borrower (the "Letters of Credit") in an aggregate face amount not to
exceed the lesser of (i) the Committed Line MINUS the then outstanding principal
balance of the Advances , or (ii) the Borrowing Base MINUS the then outstanding
principal balance of the Advances; PROVIDED that the face amount of outstanding
Letters of Credit (including drawn but unreimbursed Letters of Credit) shall not
in any case exceed Five Hundred Thousand Dollars ($500,000). Each such Letter
of Credit shall have an expiry date no later than the Maturity Date. All such
Letters of Credit shall be, in form and substance, acceptable to Bank in its
sole discretion and shall be subject to the terms and conditions of Bank's form
of application and letter of credit agreement. All amounts actually paid by
Bank in respect of a Letter of Credit shall, when paid, constitute an Advance
under the Committed Line.

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

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

(ii) Upon the issuance of any Letter of Credit payable
in a currency other than United States Dollars, Bank shall create a reserve
under the Committed Line for letters of credit against fluctuations in currency
exchange rates, in an amount equal to twenty percent (20%) of the face amount of
such Letter of Credit. The amount of such reserve may be amended by Bank from
time to time to account for fluctuations in the exchange rate. The availability
of funds under the Committed Line shall be reduced by the amount of such reserve
for so long as such Letter of Credit remains outstanding.

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

2.2 OVERADVANCES. If, at any time or for any reason, the amount of
Advances PLUS the face amount of all outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit) owed by Borrower to Bank, is greater
than the lessor of the Committed Line or the Borrowing Base, Borrower shall
immediately pay to Bank, in cash, the amount of such excess.

2.3 INTEREST RATES, PAYMENTS, AND CALCULATIONS.

(a) INTEREST RATE. Except as set forth in Section 2.3(b),
any Advances shall bear interest, on the average Daily Balance, at a rate equal
to one and three quarters (1.75) percentage points above the Prime Rate;
provided, that on the date immediately following the Equity Infusion, any
Advances shall bear interest, on the average Daily Balance, at a rate equal to
one and one quarter (1.25) percentage points above the Prime Rate.

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

(c) PAYMENTS. Interest hereunder shall be due and payable
on the ninth calendar day of each month during the term hereof. Bank shall, at
its option, charge such interest, all Bank Expenses, and all Periodic Payments
against any of Borrower's deposit accounts or against the Committed Line, in

which case those amounts shall thereafter accrue interest at the rate then
applicable hereunder. Any interest not paid when due shall be compounded by
becoming a part of the Obligations, and such interest shall thereafter accrue
interest at the rate then applicable hereunder.

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

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

2.5 FEES. Borrower shall pay to Bank the following:

(a) FACILITY FEE. A Facility Fee equal to Five Thousand
Dollars ($5,000), which fee shall be due on the Closing Date and shall be fully
earned and nonrefundable;

(b) FINANCIAL EXAMINATION AND APPRAISAL FEES. Bank's
customary fees and out-of-pocket expenses for Bank's audits of Borrower's
Accounts, and for each appraisal of Collateral and financial analysis and
examination of Borrower performed from time to time by Bank or its agents;

(c) BANK EXPENSES. Upon the date hereof, all Bank Expenses
incurred through the Closing Date, including reasonable attorneys' fees and
expenses, and, after the date hereof, all Bank Expenses, including reasonable
attorneys' fees and expenses, as and when they become due.

2.6 ADDITIONAL COSTS. In case any change in any law, regulation,
treaty or official directive or the interpretation or application thereof by any
court or any governmental authority charged with the administration thereof or
the compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law), in each case
after the date of this Agreement:

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

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

and the result of any of the foregoing is to increase the cost to Bank,
reduce the income receivable by Bank or impose any expense upon Bank with
respect to any loans, Bank shall notify Borrower thereof. Borrower agrees to
pay to Bank

the amount of such increase in cost, reduction in income or additional
expense as and when such cost, reduction or expense is incurred or
determined, upon presentation by Bank of a statement of the amount and
setting forth Bank's calculation thereof, all in reasonable detail, which
statement shall be deemed true and correct absent manifest error.

2.7 TERM. This Agreement shall become effective on the
Closing Date and, subject to Section 12.7, shall continue in full
force and effect for a term ending on the Maturity Date.
Notwithstanding the foregoing, Bank shall have the right to terminate
its obligation to make Credit Extensions under this Agreement
immediately and without notice upon the occurrence and during the
continuance of an Event of Default. Notwithstanding termination,
Bank's Lien on the Collateral shall remain in effect for so long as
any Obligations are outstanding.

3. CONDITIONS OF LOANS

3.1 CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION. The
obligation of Bank to make the initial Credit Extension is subject to
the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, the following:

(a) this Agreement;

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

(d) warrant to purchase stock and related
documents as Bank shall request (including, but not limited to, an
amended investor rights agreement providing for registration rights
for shares issued upon exercise of the warrant);

(e) financing statements (Forms XXX-0, XXX-0);

(f) insurance certificate;

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

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

3.2 CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. The
obligation of Bank to make each Credit Extension, including the
initial Credit Extension, is further subject to the following
conditions:

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

(b) the representations and warranties contained
in Section 5 shall be true and correct in all material respects on and
as of the date of such Payment/Advance Form and on the effective date
of each Credit Extension as though made at and as of each such date,
and no Event of Default shall have occurred and be continuing, or
would result from such Credit Extension. The making of each Credit
Extension shall be deemed to be a representation and warranty by
Borrower on the date of such Credit Extension as to the accuracy of
the facts referred to in this Section 3.2(b).

4. CREATION OF SECURITY INTEREST

4.1 GRANT OF SECURITY INTEREST. Borrower grants and
pledges to Bank a continuing security interest in all presently
existing and hereafter acquired or arising Collateral in order to
secure prompt repayment of any and all Obligations and in order to
secure prompt performance by Borrower of each of its covenants and
duties under the Loan Documents. Except as set forth in the Schedule,
such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a
valid, first priority security interest in Collateral acquired after
the date hereof.

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

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

5. REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows:

5.1 DUE ORGANIZATION AND QUALIFICATION. Borrower and each
Subsidiary is a corporation duly existing and in good standing under
the laws of its state of incorporation and qualified and licensed to
do business in, and is in good standing in, any state in which the
conduct of its business or its ownership of property requires that it
be so qualified.

5.2 DUE AUTHORIZATION; NO CONFLICT. The execution,
delivery, and performance of the Loan Documents are within Borrower's
powers, have been duly authorized, and are not in conflict with nor
constitute a breach of any provision contained in Borrower's Articles
of Incorporation or Bylaws, nor will they constitute an event of
default under any material agreement to which Borrower is a party or
by which Borrower is bound. Borrower is not in default under any
agreement to which it is a party or by which it is bound, which
default could have a Material Adverse Effect.

5.3 NO PRIOR ENCUMBRANCES. Borrower has good and
indefeasible title to the Collateral, free and clear of Liens, except
for Permitted Liens.

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

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

5.6 NAME; LOCATION OF CHIEF EXECUTIVE OFFICE. Except as
disclosed in the Schedule, Borrower has not done business under any
name other than that specified on the signature page hereof. The
chief executive office of Borrower is located at the address indicated
in Section 10 hereof.

5.7 LITIGATION. Except as set forth in the Schedule, there
are no actions or proceedings pending by or against Borrower or any
Subsidiary before any court or administrative agency in which an
adverse decision could have a Material Adverse Effect or a material
adverse effect on Borrower's interest or Bank's security

interest in the Collateral. Borrower does not have knowledge of any such
pending or threatened actions or proceedings.

5.8 NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS.
All consolidated financial statements related to Borrower and any
Subsidiary that have been delivered by Borrower to Bank fairly present
in all material respects Borrower's consolidated and consolidating
financial condition as of the date thereof and Borrower's consolidated
and consolidating results of operations for the period then ended.
There has not been a material adverse change in the consolidated and
consolidating financial condition of Borrower since the date of the
most recent of such financial statements submitted to Bank.

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

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

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

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

5.13 SUBSIDIARIES. Borrower does not own any stock, partnership
interest or other equity securities of any Person, except for Permitted
Investments (including the ownership of stock in ISS-Nagano GmbH).

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

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

6. AFFIRMATIVE COVENANTS

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

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

6.2 GOVERNMENT COMPLIANCE. Borrower shall meet, and shall cause
each Subsidiary to meet, the minimum funding requirements of ERISA with
respect to any employee benefit plans subject to ERISA. Borrower shall
comply, and shall cause each Subsidiary to comply, with all statutes, laws,
ordinances and government rules and regulations to which it is subject,
noncompliance with which could have a Material Adverse Effect or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral.

6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Borrower shall
deliver to Bank: (a) as soon as available, but in any event within thirty
(30) days after the end of each month, a company prepared balance sheet and
income statement covering Borrower's United States operations during such
period, certified by a Responsible Officer; (b) as soon as available, but in
any event within forty-five (45) days after the end of each of Borrower's
fiscal quarters, consolidated and consolidating financial statements of
Borrower prepared in accordance with GAAP, consistently applied; (c) as soon
as available, but in any event within ninety (90) days after the end of
Borrower's fiscal year, audited consolidated and consolidating financial
statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an unqualified opinion on such financial statements of
an independent certified public accounting firm reasonably acceptable to
Bank; (d) within five (5) days upon becoming available, copies of all
statements, reports and notices sent or made available generally by Borrower
to its security holders or to any holders of Subordinated Debt and all
reports on Form 10-K and 10-Q filed with the Securities and Exchange
Commission; (e) promptly upon receipt of notice thereof, a report of any
legal actions pending or threatened against Borrower or any Subsidiary that
could result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000) or more; and (e) such budgets, sales projections,
operating plans or other financial information as Bank may reasonably request
from time to time.

Within fifteen (15) days after the last day of each month, Borrower shall
deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer
in substantially the form of EXHIBIT C hereto, together with aged listings of
accounts receivable and accounts payable of the Borrower's United States
operations.

Borrower shall deliver to Bank with the monthly financial statements a
Compliance Certificate signed by a Responsible Officer in substantially the
form of EXHIBIT D hereto.

Bank shall have a right from time to time hereafter to audit Borrower's
Accounts at Borrower's expense, provided that such audits will be conducted
no more often than every six (6) months unless an Event of Default has
occurred and is continuing.

6.4 INVENTORY; RETURNS. Borrower shall keep all Inventory in good
and marketable condition, free from all material defects. Returns and
allowances, if any, as between Borrower and its account debtors shall be on
the same basis and in accordance with the usual customary practices of
Borrower, as they exist at the time of the execution and delivery of this
Agreement. Borrower shall promptly notify Bank of all returns and recoveries
and of all disputes and claims, where the return, recovery, dispute or claim
involves more than Fifty Thousand Dollars ($50,000).

6.5 TAXES. Borrower shall make, and shall cause each Subsidiary to
make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Bank, on demand, appropriate certificates attesting to
the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments
and withholding taxes required of it by applicable laws, including, but not
limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and
local, state, and federal income taxes, and will, upon request, furnish Bank
with proof satisfactory to Bank indicating that Borrower or a Subsidiary has
made such payments or deposits; provided that Borrower or a Subsidiary need
not make any payment if the amount or validity of such payment is contested
in good faith by appropriate proceedings and is reserved against (to the
extent required by GAAP) by Borrower.

6.6 INSURANCE.

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

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

6.7 PRINCIPAL DEPOSITORY. Borrower shall maintain its principal
depository and operating accounts with Bank.

6.8 QUICK RATIO. Borrower shall maintain, as of the last day of
each calendar month, a ratio of Quick Assets to Current Liabilities of at
least 0.70 to 1.00. Beginning September 30, 1996, Borrower shall maintain,
as of the last day of each calendar month, a ratio of Quick Assets to Current
Liabilities of at least 1.25 to 1.00. Beginning December 31, 1996, Borrower
shall maintain, as of the last day of each calendar month, a ratio of Quick
Assets to Current Liabilities of at least 1.50 to 1.00.

6.9 QUICK RATIO (CONSOLIDATED). Beginning September 30, 1996,
Borrower shall maintain, as of the last day of each of Borrower's fiscal
quarters, a ratio of Consolidated Quick Assets to Consolidated Current
Liabilities of at least 1.00 to 1.00.

6.10 DEBT-NET WORTH RATIO. Borrower shall maintain, as of the last
day of each calendar month, a ratio of Total Liabilities to Tangible Net
Worth plus Subordinated Debt of not more than 1.25 to 1.00.

6.11 TANGIBLE NET WORTH. Borrower shall maintain, as of the last
day of each calendar month, a Tangible Net Worth plus Subordinated Debt of
not less than Two Million Six Hundred Thousand Dollars ($2,600,000).

6.12 PROFITABILITY. Borrower shall, as of the end of each of
Borrower's fiscal quarters, have a net profit of at least One Dollar ($1.00).

6.13 EQUITY INFUSION. The Equity Infusion shall occur on or before
September 30, 1996.

6.14 ZERO BALANCE. During the term of the Agreement, and prior to
the Maturity Date, Borrower shall maintain a balance of no more than zero
($0.00) of Advances for a period of sixty (60) consecutive days.

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

7. NEGATIVE COVENANTS

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

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

7.2 CHANGE IN BUSINESS. Engage in any business, or permit any of
its Subsidiaries to engage in any business, other than the businesses
currently engaged in by Borrower and any business substantially similar or
related thereto (or incidental thereto), or suffer a material change in
Borrower's ownership. Borrower will not, without thirty (30) days prior
written notification to Bank, relocate its chief executive office.

7.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any
of its Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person.

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

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

7.6 DISTRIBUTIONS. Pay any dividends or make any other
distribution or payment on account of or in redemption, retirement or
purchase of any capital stock.

7.7 INVESTMENTS. Directly or indirectly acquire or own, or make
any Investment in or to any Person, or permit any of its Subsidiaries so to
do, other than Permitted Investments.

7.8 TRANSACTIONS WITH AFFILIATES/SUBSIDIARIES. 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; or transfer funds to any Subsidiary other than
transfers made in the ordinary course of Borrower's business without prior
written consent of the Bank.

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

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

7.11 COMPLIANCE. Become an "investment company" controlled by an
"investment company," within the meaning of the Investment Company Act of
1940, or become principally engaged in, or undertake as one of its important
activities, the business of extending credit for the purpose of purchasing or
carrying margin stock, or use the proceeds of any Advance for such purpose.
Fail to meet the minimum funding requirements of ERISA, permit a Reportable
Event or Prohibited Transaction, as defined in ERISA, to occur, fail to
comply with the Federal Fair Labor Standards Act or violate any law or
regulation, which violation could have a Material Adverse Effect or a
material adverse effect on the Collateral or the priority of Bank's Lien on
the Collateral, or permit any of its Subsidiaries to do any of the foregoing.

8. EVENTS OF DEFAULT

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

8.1 PAYMENT DEFAULT. If Borrower fails to pay the principal of, or
any interest on, any Credit Extension when due and payable; or fails to pay
any portion of any other Obligations not constituting such principal or
interest, including without limitation Bank Expenses, within thirty (30) days
of receipt by Borrower of an invoice for such other Obligations;

8.2 COVENANT DEFAULT. If Borrower fails to perform any obligation
under Sections 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.13 or 6.14 or violates any
of the covenants contained in Article 7 of this Agreement, or fails or
neglects to perform, keep, or observe any other material term, provision,
condition, covenant, or agreement contained in this Agreement, in any of the
Loan Documents, or in any other present or future agreement between Borrower
and Bank and as to any default under such other term, provision, condition,
covenant or agreement that can be cured, has failed to cure such default
within ten (10) days after Borrower receives notice thereof or any officer of
Borrower becomes aware thereof; provided, however, that if the default cannot
by its nature be cured within the ten (10) day period or cannot after
diligent attempts by Borrower be cured within such ten (10) day period, and
such default is likely to be cured within a reasonable time, then Borrower
shall have an additional reasonable period (which shall not in any case
exceed thirty (30) days) to attempt to cure such default, and within such
reasonable time period the failure to have cured such default shall not be
deemed an Event of Default (provided that no Advances will be required to be
made during such cure period);

8.3 MATERIAL ADVERSE CHANGE. If there occurs a material adverse
change in Borrower's business or financial condition, or if there is a
material impairment of the prospect of repayment of any portion of the
Obligations or a material impairment of the value or priority of Bank's
security interests in the Collateral;

8.4 ATTACHMENT. If any material portion of Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any trustee, receiver or person acting in a
similar capacity and such attachment, seizure, writ or distress warrant or
levy has not been removed, discharged or rescinded within ten (10) days, or
if Borrower is enjoined, restrained, or in any way prevented by court order
from continuing to conduct all or any material part of its business affairs,
or if a judgment or other claim becomes a lien or encumbrance upon any
material portion of Borrower's assets, or if a notice of lien, levy, or
assessment is filed of record with respect to any of Borrower's assets by the
United States Government, or any department, agency, or instrumentality
thereof, or by any state, county, municipal, or governmental agency, and the
same is not paid within ten (10) days after Borrower receives notice thereof,
provided that none of the foregoing shall constitute an Event of Default
where such action or event is stayed or an adequate bond has been posted
pending a

good faith contest by Borrower (provided that no Credit Extensions will be
required to be made during such cure period);

8.5 INSOLVENCY. If Borrower becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is
commenced against Borrower and is not dismissed or stayed within ten (10)
days (provided that no Credit Extensions will be made prior to the dismissal
of such Insolvency Proceeding);

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

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

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

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

9. BANK'S RIGHTS AND REMEDIES

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

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

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

(c) Demand that Borrower (i) deposit cash with Bank in an
amount equal to the amount of any Letters of Credit remaining undrawn, as
collateral security for the repayment of any future drawings under such
Letters of Credit, and Borrower shall forthwith deposit and pay such amounts,
and (ii) pay in advance all Letters of Credit fees scheduled to be paid or
payable over the remaining term of the Letters of Credit;

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

(e) Without notice to or demand upon Borrower, make such
payments and do such acts as Bank considers necessary or reasonable to
protect its security interest in the Collateral. Borrower agrees to assemble
the Collateral if Bank so requires, and to make the Collateral available to
Bank as Bank may designate. Borrower authorizes Bank to enter the premises
where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase, contest, or compromise
any encumbrance, charge, or lien which in Bank's determination appears to be
prior or superior to its security interest and to pay all expenses

incurred in connection therewith. With respect to any of Borrower's owned
premises, Borrower hereby grants Bank a license to enter into possession of
such premises and to occupy the same, without charge, in order to exercise
any of Bank's rights or remedies provided herein, at law, in equity, or
otherwise;

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

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

(h) Sell the Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms,
in such manner and at such places (including Borrower's premises) as Bank
determines is commercially reasonable, and apply any proceeds to the
Obligations in whatever manner or order Bank deems appropriate;

(i) Bank may credit bid and purchase at any public sale; and

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

9.2 POWER OF ATTORNEY. Effective only upon the occurrence and
during the continuance of an Event of Default, Borrower hereby irrevocably
appoints Bank (and any of Bank's designated officers, or employees) as
Borrower's true and lawful attorney to: (a) send requests for verification
of Accounts or notify account debtors of Bank's security interest in the
Accounts; (b) endorse Borrower's name on any checks or other forms of payment
or security that may come into Bank's possession; (c) sign Borrower's name on
any invoice or xxxx of lading relating to any Account, drafts against account
debtors, schedules and assignments of Accounts, verifications of Accounts,
and notices to account debtors; (d) make, settle, and adjust all claims under
and decisions with respect to Borrower's policies of insurance; and (e)
settle and adjust disputes and claims respecting the accounts directly with
account debtors, for amounts and upon terms which Bank determines to be
reasonable; provided Bank may exercise such power of attorney to sign the
name of Borrower on any of the documents described in Section 4.2 regardless
of whether an Event of Default has occurred. The appointment of Bank as
Borrower's attorney in fact, and each and every one of Bank's rights and
powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully repaid and performed and Bank's obligation to
provide advances hereunder is terminated.

9.3 ACCOUNTS COLLECTION. At any time from the date of this
Agreement, Bank may notify any Person owing funds to Borrower of Bank's
security interest in such funds and verify the amount of such Account.
Borrower shall collect all amounts owing to Borrower for Bank, receive in
trust all payments as Bank's trustee, and immediately deliver such payments
to Bank in their original form as received from the account debtor, with
proper endorsements for deposit.

9.4 BANK EXPENSES. If Borrower fails to pay any amounts or furnish
any required proof of payment due to third persons or entities, as required
under the terms of this Agreement, then Bank may do any or all of the
following: (a) make payment of the same or any part thereof; (b) set up such
reserves under the Revolving Facility as Bank deems necessary to protect Bank
from the exposure created by such failure; or (c) obtain and maintain
insurance policies of the type discussed in Section 6.6 of this Agreement,
and take any action with respect to such policies as Bank deems prudent. Any
amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be
immediately due and payable, and shall bear interest at the then applicable
rate

hereinabove provided, and shall be secured by the Collateral. Any payments
made by Bank shall not constitute an agreement by Bank to make similar
payments in the future or a waiver by Bank of any Event of Default under this
Agreement.

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

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

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

10. NOTICES

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

If to Borrower: Integrated Sensor Solutions, Inc.
000 Xxxxx Xxxx Xxxx.
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxxxxxx
FAX: (000) 000-0000

If to Bank: Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxx
FAX: (000) 000-0000

The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.

11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of California, without regard to
principles of conflicts of law. Each of Borrower and Bank hereby submits to
the exclusive jurisdiction of the state and Federal courts located in the
County of Santa Xxxxx, State of California. BORROWER AND BANK EACH HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT

CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

12. GENERAL PROVISIONS

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

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

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

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

12.5 AMENDMENTS IN WRITING, INTEGRATION. This Agreement cannot be
amended or terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with
respect to the subject matter of this Agreement, if any, are merged into this
Agreement and the Loan Documents.

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

12.7 SURVIVAL. All covenants, representations and warranties made
in this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify
Bank with respect to the expenses, damages, losses, costs and liabilities
described in Section 12.2 shall survive until all applicable statute of
limitations periods with respect to actions that may be brought against Bank
have run.

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

INTEGRATED SENSOR SOLUTIONS, INC.

By: /s/ M.D. NAIK
------------------------------

Title: Chairman, President & CEO
---------------------------

By: /s/ XXXXX XXXXXXXXXXX
------------------------------

Title: VP Finance/Secretary
---------------------------

SILICON VALLEY BANK

By: /s/ XXXXXXX XXXX
------------------------------

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

EXHIBIT A

The Collateral shall consist of all right, title and interest of
Borrower in and to the following:

(a) 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;

(b) 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,
and Borrower's Books relating to any of the foregoing;

(c) All contract rights and general intangibles 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;

(d) 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, whether or not earned by
performance, and any and all credit insurance, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by Borrower and
Borrower's Books relating to any of the foregoing;

(e) All documents, cash, deposit accounts, securities, letters of
credit, certificates of deposit, instruments and chattel paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing;

(f) All copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished, 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

(g) Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.

EXHIBIT B

LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.

TO: CENTRAL CLIENT SERVICE DIVISION DATE:_________

FAX: (408) 2426 TIME:_________

--------------------------------------------------------------------------
FROM: INTEGRATED SENSOR SOLUTIONS, INC.
----------------------------------------------------------------
CLIENT NAME (BORROWER)

REQUESTED BY:
--------------------------------------------------------
AUTHORIZED SIGNER'S NAME

AUTHORIZED SIGNATURE:
------------------------------------------------

PHONE NUMBER:
--------------------------------------------------------

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

REQUESTED TRANSACTION TYPE REQUEST DOLLAR AMOUNT

PRINCIPAL INCREASE (ADVANCE) $_____________________________
PRINCIPAL PAYMENT (ONLY) $_____________________________
INTEREST PAYMENT (ONLY) $_____________________________
PRINCIPAL AND INTEREST (PAYMENT) $_____________________________

OTHER INSTRUCTIONS:___________________________________________________
________________________________________________________________________

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

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

BANK USE ONLY

TELEPHONE REQUEST:

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

------------------------------- ----------------------
Authorized Requester Phone #

------------------------------- ----------------------
Received By (Bank) Phone #

---------------------------
Authorized Signature (Bank)
--------------------------------------------------------------------------

EXHIBIT C
BORROWING BASE CERTIFICATE

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

Borrower: INTEGRATED SENSOR SOLUTIONS, INC. Lender: Silicon Valley Bank

Commitment Amount: $1,000,000

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

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. Excess 25% concentration* $_______
7. Credit Balance over 90 days $_______
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 (75% of #15) $_______
17. TOTAL AVAILABLE BASE $_______

BALANCES
1. Maximum Loan Amount $_______
2. Total Funds Available [Lesser of #18 or #16] $_______
3. Present balance owing on Line of Credit $_______
4. Outstanding under Sublimits
(Cash Management and L/C Sublimits) $_______
5. RESERVE POSITION (#19 minus #20 and #21) $_______

* 35% concentration limit for BLD Products, Inc., Breed Technologies,
Inc. and IC Sensors, Inc.
** Xxxxxxx Electric Co. (Honda), Omron Corporation, Nagano Keiki
Seisakusho, Matsuda Micronics Corp. and Nippon Precision Device
Corporation shall be deemed Eligible Foreign Accounts.

THE UNDERSIGNED REPRESENTS AND WARRANTS THAT THE FOREGOING IS TRUE, COMPLETE
AND CORRECT, AND THAT THE INFORMATION REFLECTED IN THIS BORROWING BASE
CERTIFICATE COMPLIES WITH THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THE
LOAN AND SECURITY AGREEMENT BETWEEN THE UNDERSIGNED AND SILICON VALLEY BANK.
-------------------------
COMMENTS: BANK USE ONLY
Rec'd By:
-----------
INTEGRATED SENSOR SOLUTIONS, INC. Auth. Signer
Date:
---------------
By: /s/ XXXXX XXXXXXXXXXX Verified:
------------------------------------ -----------
Authorized Signer Auth. Signer
Date:
---------------
--------------------
-------------------------

EXHIBIT D
COMPLIANCE CERTIFICATE

TO: SILICON VALLEY BANK

FROM: INTEGRATED SENSOR SOLUTIONS, INC.

The undersigned authorized officer of Integrated Sensor
Solutions, Inc. hereby certifies that in accordance with the terms and
conditions of the Loan and Security Agreement between Borrower and
Bank (the "Agreement"), (i) Borrower is in complete compliance for the
period ending ________ with all required covenants except as noted below and
(ii) all representations and warranties of Borrower stated in the
Agreement are true and correct in all material respects as of the date
hereof. Attached herewith are the required documents supporting the
above certification. The Officer further certifies that these are
prepared in accordance with Generally Accepted Accounting Principles
(GAAP) and are consistently applied from one period to the next except
as explained in an accompanying letter or footnotes.

PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.

REPORTING COVENANT REQUIRED COMPLIES
------------------ -------- --------

Monthly financial statements Monthly within 30 days Yes No
Quarterly financial statements (consolidated) Quarterly within 45 days Yes No
Annual (CPA Audited) FYE within 90 days Yes No
A/R & A/P Agings Monthly within 15 days Yes No
A/R Audit Initial and Semi-Annual Yes No

FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------

Maintain on a Monthly Basis:
Minimum Quick Ratio .70:1.00* _____:1.00 Yes No
Minimum Tangible Net Worth $2,600,000 $_______ Yes No
Maximum Debt/Tangible Net Worth 1.25:1.00 _____:1.00 Yes No

Maintain on a Quarterly Basis:
Minimum Quick Ratio (Consolidated) 1.00:1.00 _____:1.00 Yes No

Profitability: Quarterly $1.00 $________ Yes No

* As of 9/30/96: 1.25:100; as of 12/31/96: 1.50:1.00.

COMMENTS REGARDING EXCEPTIONS: See Attached.
------------------------------------
BANK USE ONLY
Sincerely,
Rec'd By:
/s/ XXXXX XXXXXXXXXXX ----------------------
-------------------------------- Authorized Signer
SIGNATURE Date:
--------------------------
-------------------------------- Verified:
TITLE ----------------------
Authorized Signer
-------------------------------- Date:
DATE --------------------------
Compliance Status: Yes No
------------------------------------

DISBURSEMENT REQUEST AND AUTHORIZATION

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

Borrower: INTEGRATED SENSOR SOLUTIONS, INC. Bank: Silicon Valley Bank

LOAN TYPE. This is a Variable Rate, Revolving Line of Credit of a
principal amount up to $1,000,000.

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

SPECIFIC PURPOSE. The specific purpose of this loan is: Support
Working Capital.

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

Revolving Line
--------------

Amount paid to Borrower directly: $_________
Undisbursed Funds $_________

Principal $_________

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

Prepaid Finance Charges Paid in Cash: $_________
$5,000 Loan Fee
$______ Accounts Receivables Audit

Other Charges Paid in Cash: $_________
$______ UCC Search Fees
$______ UCC Filing Fees
$______ Patent Filing Fees
$______ Trademark Filing Fees
$______ Copyright Filing Fees
$______ Outside Counsel Fees and Expenses (Estimate)

Total Charges Paid in Cash $_________

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

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER
REPRESENTS AND WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS
TRUE AND CORRECT AND THAT THERE HAS BEEN NO ADVERSE CHANGE IN
BORROWER'S FINANCIAL CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT
FINANCIAL STATEMENT TO BANK. THIS AUTHORIZATION IS DATED AS OF JULY
10, 1996.

BORROWER:

INTEGRATED SENSOR SOLUTIONS, INC.

/s/ XXXXX XXXXXXXXXXX
---------------------------------------
Authorized Officer

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

AGREEMENT TO PROVIDE INSURANCE

GRANTOR: INTEGRATED SENSOR SOLUTIONS, INC. BANK: Silicon Valley Bank
-------------------------------------------------------------------------------

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

Collateral: All Inventory, Equipment and Fixtures.
Type: All risks, including fire, theft and liability.
Amount: Full insurable value.
Basis: Replacement value.
Endorsements: Loss payable clause to Bank with stipulation
that coverage will not be canceled or diminished
without a minimum of twenty (20) days' prior
written notice to Bank.

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

FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Bank,
on or before closing, evidence of the required insurance as provided
above, with an effective date of July 10, 1996, or earlier. Grantor
acknowledges and agrees that if Grantor fails to provide any required
insurance or fails to continue such insurance in force, Bank may do so
at Grantor's expense as provided in the Loan and Security Agreement.
The cost of such insurance, at the option of Bank, shall be payable on
demand or shall be added to the indebtedness as provided in the
security document. GRANTOR ACKNOWLEDGES THAT IF BANK SO PURCHASES ANY
SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST
PHYSICAL DAMAGE TO THE COLLATERAL, UP TO THE BALANCE OF THE LOAN;
HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE INSURED. IN
ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR
PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF
ANY FINANCIAL RESPONSIBILITY LAWS.

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

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
AGREEMENT TO PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS
AGREEMENT IS DATED JULY 10, 1996.

GRANTOR:

INTEGRATED SENSOR SOLUTIONS, INC.

/s/ XXXXX XXXXXXXXXXX
-------------------------------------
Authorized Officer

-------------------------------------------------------------------------------
FOR BANK USE ONLY
INSURANCE VERIFICATION
DATE: PHONE:
AGENT'S NAME: ______________ _______________
INSURANCE COMPANY: ____________________________________________
POLICY NUMBER: ___________________________________________________
EFFECTIVE DATES: _________________________________________________
COMMENTS: ________________________________________________________
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CORPORATE RESOLUTIONS TO BORROW

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Borrower: INTEGRATED SENSOR SOLUTIONS, INC.

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I, the undersigned Secretary or Assistant Secretary of Integrated
Sensor Solutions, Inc. (the "Corporation"), HEREBY CERTIFY that the
Corporation is organized and existing under and by virtue of the laws of the
State of California.

I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are
true and complete copies of the Articles of Incorporation and Bylaws of the
Corporation, each of which is in full force and effect on the date hereof.

I FURTHER CERTIFY that at a meeting of the Directors of the
Corporation, duly called and held, at which a quorum was present and voting
(or by other duly authorized corporate action in lieu of a meeting), the
following resolutions were adopted.

BE IT RESOLVED, that ANY ONE (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:

NAMES POSITIONS ACTUAL SIGNATURES
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----------------------- ----------------------- ----------------------------

acting for an on behalf of this Corporation and as its act and deed
be, and they hereby are, authorized and empowered:

BORROW MONEY. To borrow from time to time from Silicon Valley
Bank ("Bank"), on such terms as may be agreed upon between the
officers, employees, or agents and Bank, such sum or sums of money as
in their judgment should be borrowed, without limitation, including
such sums as are specified in that certain Loan and Security Agreement
dated as of July 10, 1996 (the "Loan Agreement").

EXECUTE NOTES. To execute and deliver to Bank the promissory
note or notes of the Corporation, on Lender's forms, at such rates of
interest and on such terms as may be agreed upon, evidencing the sums
of money so borrowed or any indebtedness of the Corporation to Bank,
and also to execute and deliver to Lender one or more renewals,
extensions, modifications, refinancings, consolidations, or
substitutions for one or more of the notes, or any portion of the
notes.

GRANT SECURITY. To grant a security interest to Bank in the
Collateral described in the Loan Agreement, which security interest
shall secure all of the Corporation's Obligations, as described in the
Loan Agreement.

NEGOTIATE ITEMS. To draw, endorse, and discount with Bank all
drafts, trade acceptances, promissory notes, or other evidences of
indebtedness payable to or belonging to the Corporation or in which
the Corporation may have an interest, and either to receive cash for
the same or to cause such proceeds to be credited to the account of
the Corporation with Bank, or to cause such other disposition of the
proceeds derived therefrom as they may deem advisable.

LETTERS OF CREDIT; FOREIGN EXCHANGE. To execute letters of
credit applications, foreign exchange agreements and other related
documents pertaining to Bank's issuance of letters of credit and
foreign exchange contracts.

ISSUE WARRANTS. To issue warrants to purchase the Corporation's
capital stock, for such series and number, and on such terms, as an
officer of the Corporation shall deem appropriate.

FURTHER ACTS. In the case of lines of credit, to designate
additional or alternate individuals as being authorized to request
advances thereunder, and in all cases, to do and perform such other
acts and things, to pay any and all fees and costs, and to execute and
deliver such other documents and agreements as they may in their
discretion deem reasonably necessary or proper in order to carry into
effect the provisions of these Resolutions.

BE IT FURTHER RESOLVED, that any and all acts authorized pursuant
to these resolutions and performed prior to the passage of these
resolutions are hereby ratified and approved, that these Resolutions
shall remain in full force and effect and Bank may rely on these
Resolutions until written notice of their revocation shall have been
delivered to and received by Bank. Any such notice shall not affect
any of the Corporation's agreements or commitments in effect at the
time notice is given.

I FURTHER CERTIFY that the officers, employees, and agents named
above are duly elected, appointed, or employed by or for the Corporation, as
the case may be, and occupy the positions set forth opposite their respective
names; that the foregoing Resolutions now stand of record on the books of the
Corporation; and that the Resolutions are in full force and effect and have
not been modified or revoked in any manner whatsoever.

IN WITNESS WHEREOF, I have hereunto set my hand on July 10, 1996
and attest that the signatures set opposite the names listed above are
their genuine signatures.

CERTIFIED TO AND ATTESTED BY:

/s/ XXXXX XXXXXXXXXXX
--------------------------------------

AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

This Amendment to Loan and Security Agreement is entered into as of
August 22, 1997, by and between SILICON VALLEY BANK ("Bank") and INTEGRATED
SENSOR SOLUTIONS, INC. ("Borrower").

RECITALS

Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of July 10, 1996, as amended, (the "Agreement"). Borrower
failed to comply with the profitability covenant contained in the Agreement.
Borrower has asked Bank to waive compliance with that section as of December
31, 1996 and to amend certain provisions of the Agreement. Bank has agreed
to waive such compliance with that section and to amend the Agreement, all in
accordance with the terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:

1. Bank waives Borrower's obligation to comply with section 6.12 of the
Agreement as of the fiscal quarter ending December 31, 1996. Such waiver
does not constitute a waiver (i) of compliance with those sections as of any
other date, (ii) of any other failure by Borrower to comply with the
Agreement or any other Events of Default, now existing or hereafter arising,
or (iii) Bank's right to require compliance at all times with the terms and
conditions of the Agreement. Bank reserves all rights under the Agreement
and under applicable law.

2. The following definitions in Section 1.1 are amended to read
as follows:

"Committed Line" means Two Million Dollars ($2,000,000).

"Maturity Date" means August 21, 2001, provided Advances may be
requested under Section 2.1 only through August 21, 1998, on which date all
Advances under Section 2.1 shall be due and payable.

3. The last paragraph of Section 2.1.1 is amended to read as follows:

The Revolving Facility shall terminate on August 21, 1998, at which
time all Advances under this Section 2.1.1 shall be immediately due and
payable.

4. The second sentence of Section 2.1.2(a) is amended to read as
follows:

Each such Letter of Credit shall have an expiry date no later than
August 21, 1998.

5. The reference in Section 2.1.2 to "Five Hundred Thousand Dollars
($500,000) is amended to read "Two Million Dollars ($2,000,000)".

6. Section 2.1.3 is added to the Agreement, as follows:

2.1.3 EQUIPMENT ADVANCES.

(a) Borrower may request one or more advances at any time prior to
August 21, 1998 (each, an "Equipment Advance" and, collectively, the
"Equipment Advances") from Bank in an aggregate principal amount not to
exceed Two Hundred Fifty Thousand Dollars ($250,000) prior to Borrower's
achieving three consecutive quarters of Debt Service Coverage greater than or
equal to 1.75 to 1.00, and Five Hundred Thousand Dollars ($500,000)
thereafter. The Equipment Advances shall be used only to purchase Equipment
approved from time to time by Bank and shall not exceed one hundred percent
(100%) of the invoice amount of such Equipment, excluding taxes, shipping,
warranty charges, freight discounts and installation expense.

(b) Interest shall accrue from the date of each Equipment Advance at a
floating rate equal to the Prime Rate plus One and One-Half Percent (1.50%)
per annum, and shall be payable monthly on the twenty-first day of each month
after the date of an Equipment Advance through August 21, 1998. The
Equipment Advance or Equipment Advances outstanding on August 21, 1998 will
be payable in thirty-six (36) equal monthly installments of principal, plus
accrued interest, on the twenty-first day of each month beginning September
21, 1998. The entire principal balance and all accrued but unpaid interest
shall be due and payable on the Maturity Date.

(c) When Borrower desires to obtain an Equipment Advance, Borrower
shall notify Bank (which notice shall be irrevocable) by facsimile
transmission received no later than 3:00 p.m. California time one (1)
Business Day before the day on which the Equipment Advance is to be made.
Such notice shall be in substantially the form of EXHIBIT B. The notice
shall be signed by a Responsible Officer and include a copy of the invoices
for the Equipment to be purchased.

7. Section 2.3(a) is amended to read as follows:

(a) INTEREST RATE. Except as set forth in Section 2.3(b), any Advances
shall bear interest, on the average Daily Balance, at a rate equal to
three-quarters of one percent (0.75%) above the Prime Rate.

8. Sections 6.8, 6.11 and 6.12 are amended, and Section 6.16 is added,
as follows:

6.8 QUICK RATIO. Beginning July 31, 1997, Borrower shall maintain,
as of the last day of each calendar month, a ratio of Quick Assets to
Current Liabilities of at least 1.25 to 1.00.

6.11 TANGIBLE NET WORTH. Beginning July 31, 1997, Borrower shall
maintain, as of the last day of each calendar month, a Tangible Net Worth
plus Subordinated Debt of not less than Five Million Dollars ($5,000,000).

6.12 PROFITABILITY. Beginning July 31, 1997, Borrower shall be
profitable for each fiscal quarter and each fiscal year.

6.16 DEBT SERVICE COVERAGE. Beginning July 31, 1997, Borrower shall
maintain, as of the last day of each fiscal quarter, Debt Service Coverage
of at least 1.75 to 1.00. "Debt Service Coverage" means net income plus
depreciation and amortization plus interest expense for the preceding
fiscal quarter, divided by the current portion of total long term debt
plus interest expense.

9. The Compliance Certificate to be delivered after the date of this
Amendment shall be in substantially the form of EXHIBIT D hereto.

10. Unless otherwise defined, all capitalized terms in this
Amendment shall be as defined in the Agreement. Except as amended,
the Agreement remains in full force and effect.

11. Borrower represents and warrants that the Representations
and Warranties contained in the Agreement are true and correct as of
the date of this Amendment, and that no Event of Default has occurred
and is continuing.

12. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one instrument.

13. As a condition to the effectiveness of this Amendment,
Borrower shall pay a Facility Fee in an amount equal to Four Thousand
Dollars ($4,000), payable upon the date hereof, plus all Bank Expenses
incurred in connection with the preparation of this Amendment,
together with Warrants to Purchase Stock, a Negative Pledge Agreement,
and an Affirmation of Subordination, all in form reasonably
satisfactory to Bank.

IN WITNESS WHEREOF, the undersigned have executed this Amendment
as of the first date above written.

INTEGRATED SENSOR SOLUTIONS, INC.

By: /s/ XXXXX XXXXXXXXXXX
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Title: VP Finance & Admin
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SILICON VALLEY BANK

By: /s/ XXXXXXX XXXX
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Title:
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EXHIBIT D
COMPLIANCE CERTIFICATE

TO: SILICON VALLEY BANK

FROM: INTEGRATED SENSOR SOLUTIONS, INC.

The undersigned authorized officer of Integrated Sensor Solutions, Inc.
hereby certifies that in accordance with the terms and conditions of the Loan
and Security Agreement between Borrower and Bank (the "Agreement"), (i)
Borrower is in complete compliance for the period ending __________ with all
required covenants except as noted below and (ii) all representations and
warranties of Borrower stated in the Agreement are true and correct in all
material respects as of the date hereof. Attached herewith are the required
documents supporting the above certification. The Officer further certifies
that these are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) and are consistently applied from one period to the next
except as explained in an accompanying letter or footnotes.

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

REPORTING COVENANT REQUIRED COMPLIES
------------------ -------- --------

FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------

Maintain on a Monthly Basis:
Minimum Quick Ratio 1.25-1.00 __ :__:1.00 Yes No
Minimum Tangible Net Worth $5,000,000 $_________ Yes No
Maximum Debt/Tangible Net Worth 1.25:1.00 __ :__:1.00 Yes No

Maintain on a Quarterly Basis:
Minimum Quick Ratio (Consolidated) 1.00:1.00 __ :__:1.00 Yes No
Minimum Debt Service Coverage 1.75:1.00 __ :__:1.00 Yes No

Profitability: Quarterly $1.00 $__________ Yes No
Annual $1.00 $__________ Yes No

Comments Regarding Exceptions: See Attached.
-----------------------------------------
Sincerely, BANK USE ONLY

Received by:
/s/ XXXXX XXXXXXXXXXX -------------------------
----------------------------- AUTHORIZED SIGNER
SIGNATURE

Date:
----------------------------- --------------------------------
TITLE
Verified:
----------------------------
AUTHORIZED SIGNER
-----------------------------
DATE Date:
--------------------------------

Compliance Status: Yes No
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NEGATIVE PLEDGE AGREEMENT

This Negative Pledge Agreement is made as of August 22, 1997, by
and between INTEGRATED SENSOR SOLUTIONS, INC. ("Borrower") and SILICON VALLEY
BANK ("Bank").

In connection with the Loan Documents begin concurrently executed
between Borrower and Bank, Borrower agrees as follows:

1. 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 protection 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 (collectively, the "Copyrights");

b. 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;

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

d. 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
(collectively, the "Patents");

e. 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 (collectively, the "Trademarks");

f. 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 xxx for and collect such damages for said use or
infringement of the intellectual property rights identified above;

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

h. All amendments, extensions, renewals and extensions of any
of the Copyrights, Patents or Trademarks; and

i. 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.

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 items used herein without definition shall have the
same meanings as set forth in the Loan and Security Agreement of even date
herewith.

INTEGRATED SENSOR SOLUTIONS, INC. SILICON VALLEY BANK

By: /s/ XXXXX XXXXXXXXXXX By: /s/ XXXXXXX XXXX
------------------------------ ---------------------------

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

CORPORATE RESOLUTIONS TO BORROW

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Borrower: INTEGRATED SENSOR SOLUTIONS, INC.

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I, the undersigned Secretary or Assistant Secretary of INTEGRATED
SENSOR SOLUTIONS, INC. (the "Corporation"), HEREBY CERTIFY that the
Corporation is organized and existing under and by virtue of the laws of the
state of its incorporation.

I FURTHER CERTIFY that at a meeting of the Directors of the
Corporation duly called and held, at which a quorum was present and voting,
(or by other duly authorized corporate action in lieu of a meeting), the
following resolutions were adopted.

BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:

NAMES POSITIONS ACTUAL SIGNATURES
----------------------- ----------------------- ----------------------------

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

acting for an on behalf of this Corporation and as its act and deed be, and
they hereby are, authorized and empowered:

Borrow Money. To borrow from time to time from Silicon Valley Bank
("Bank"), on such terms as may be agreed upon between the officers,
employees, or agents and Bank, such sum or sums of money as in their judgment
should be borrowed, without limitation, including such sums as are specified
in the Amendment to Loan and Security Agreement dated as of August 22, 1997,
as amended from time to time by Bank and Corporation.

Execute Notes. To execute and deliver to Bank the promissory note
or notes of the Corporation, on Bank's forms, at such rates of interest and
on such terms as may be agreed upon, evidencing the sums of money so borrowed
or any indebtedness of the Corporation to Bank, and also to execute and
deliver to Bank one or more renewals, extensions, modifications,
refinancings, consolidations, or substitutions for one or more of the notes,
or any portion of the notes.

Grant Security. To grant a security interest to Bank in the
Collateral described in the Loan Agreement, which security interest shall
secure all of the Corporation's Obligations, as described in the Loan
Agreement.

Negotiate Items. To draw, endorse, and discount with Bank all
drafts, trade acceptances, promissory notes, or other evidences of
indebtedness payable to or belonging to the Corporation or in which the
Corporation may have an interest, and either to receive cash for the same or
to cause such proceeds to be credited to the account of the Corporation with
Bank, or to cause such other disposition of the proceeds derived therefrom as
they may deem advisable.

Letters of Credit. To execute letters of credit applications and
other related documents pertaining to Bank's issuance of letters of credit.

Foreign Exchange Contracts. To request Bank to enter into foreign
exchange contracts on its behalf.

Further Acts. In the case of lines of credit, to designate
additional or alternate individuals as being authorized to request advances
thereunder, and in all cases, to do and perform such other acts and things,
to pay any and all fees and costs, and to execute and deliver such other
documents and agreements as they may in their discretion deem reasonably
necessary or proper in order to carry into effect the provisions of these
Resolutions.

BE IT FURTHER RESOLVED, that any and all acts authorized pursuant
to these resolutions and performed prior to the passage of these resolutions
are hereby ratified and approved, that these Resolutions shall remain in full
force and effect and Bank may rely on these Resolutions until written notice
of their revocation shall have been delivered to and received by Bank. Any
such notice shall not affect any of the Corporation's agreements or
commitments in effect at the time notice is given.

I FURTHER CERTIFY that attached hereto are true and correct copies
of the Certificate of Incorporation and Bylaws of the Corporation.

IN WITNESS WHEREOF, I have hereunto set my hand on August ____,
1997 and attest that the signatures set opposite the names listed above are
their genuine signatures.

CERTIFIED TO AND ATTESTED BY:

/s/ XXXXX XXXXXXXXXXX
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