EXPORT-IMPORT BANK

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INVISION TECHNOLOGIES, INC.

EXPORT-IMPORT BANK

LOAN AND SECURITY AGREEMENT

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THIS EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT (the "Exim
Agreement") is entered into as of February 20, 1997, by and between SILICON
VALLEY BANK ("Bank") and INVISION TECHNOLOGIES, INC. ("Borrower").

RECITALS

A. Borrower wishes to obtain credit from Bank, and Bank wishes to
extend credit to Borrower.

B. Borrower and Bank desire in this Exim Agreement to set forth their
agreement with respect to a working capital facility to be guaranteed by
Export-Import Bank of the United States.

AGREEMENT

The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION

1.1 DEFINITIONS. As used in this Exim 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 a cash advance under this Exim
Agreement.

"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.

"BORROWER AGREEMENT" means the Export-Import Bank of the
United States Working Capital Guarantee Program Borrower Agreement between
Borrower and Bank.

"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 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.

"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.

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authorship and derivative work thereof, whether published or unpublished and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

"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 Advances 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.

"DAILY BALANCE" means the amount of the Obligations owed at
the end of a given day.

"DOMESTIC AGREEMENT" means that certain Loan and Security
Agreement by and between Borrower and Bank dated as of even date herewith.

"DOMESTIC LOAN DOCUMENTS" means the Domestic Agreement and the
instruments and documents executed in connection with that Agreement.

"ELIGIBLE FOREIGN INVENTORY" means Inventory purchased or
manufactured by Borrower for resale located in the United States, other than
Inventory that is excluded under the Borrower Agreement and this Exim
Agreement. Eligible Foreign Inventory shall not include the following:

(a) any Inventory which is not located in the United States;

(b) any demonstration Inventory or Inventory sold on
consignment;

(d) any Inventory which is damaged, obsolete, returned,
defective, recalled or unfit for further processing;

(e) any Inventory which has been previously exported from the
United States;

(f) any Inventory which constitutes defense articles or
defense services;

(g) any Inventory which is to be incorporated into items
destined for shipment to a country in which Exim Bank is legally prohibited
from doing business;

(h) any Inventory which is to be incorporated into items
destined for shipment to a country in which Exim Bank coverage is not
available for commercial reasons, except to the extent such items are sold to
such country on terms of a letter of credit confirmed by a bank acceptable to
Exim Bank; and

(i) any Inventory which is to be incorporated into items
whose sale would result in an Account that is not an Exim Eligible Foreign
Account.

"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.

"EXIM BANK" means Export-Import Bank of the United States.

"EXIM 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, including any costs incurred in relation

to opposing or seeking' to obtain relief from any stay or restructuring order
prohibiting Bank from exercising its rights as a secured creditor,
foreclosing upon or disposing of Collateral, or such related matters; fees
that Bank pays to Exim Bank in consideration Of the issuance of the Exim
Guarantee; and Bank's reasonable attorneys' fees and expenses incurred in
amending, enforcing or defending the Loan Documents, whether or not suit is
brought.

"EXIM COMMITTED LINE" means Four Million Five Hundred Thousand
Dollars ($4,500,000).

"EXIM ELIGIBLE FOREIGN ACCOUNTS" means those Accounts payable
in United States Dollars that arise in the ordinary course of Borrower's
business from Borrower's sale of Eligible Foreign Inventory (i) with respect
to which the account debtor is not a resident of the United States; (ii) that
have been validly assigned and comply with all of Borrower's representations
and warranties to Bank; and (iii) (A) that are supported by one or more
letters of credit issued by a financial institution acceptable to Bank on
terms acceptable to Bank and Exim Bank or (B) are Accounts on open account
terms approved by Bank in its sole discretion on a case by case basis;
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
the Borrower in accordance with the provisions hereof. Exim Eligible Foreign
Accounts shall not include the following:

(a) Accounts with a term in excess of ninety (90) days;

(b) Unless pre-approved by Bank in its sole discretion,
Accounts that the account debtor has failed to pay within sixty (60) calendar
days of the original due date of the invoice unless such Accounts are insured
through Exim Bank export credit insurance for comprehensive commercial and
political risk, or through Exim Bank approved private insurers for comparable
coverage, in which case ninety, (90) calendar days shall apply;

(c) 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 the original date of invoice;

(d) Accounts evidenced by a letter of credit until the date
of shipment of the items covered by the subject letter of credit;

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

(f) Accounts with respect to which the account debtor is
located in a country in which Exim Bank is legally prohibited from doing
business;

(g) Accounts with respect to which the account debtor is
located in a country in which Exim Bank coverage is not available for
commercial reasons;

(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 Borrower's liability to such account
debtor;

(i) Accounts with respect to which the account debtor
disputes liability or makes any claim with respect thereto (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;

(j) Accounts generated by the sale of products purchased for
military purposes;

(k) Accounts generated by sales of Inventory which
constitutes defense articles or defense services;

(i) Accounts payable in currency other than Dollars;

(m) Accounts which are due and owing and the collection of
which must be made outside the United States;

(n) Accounts generated by the rendering of maintenance
services;

(o) Advance deposits or payments made by account debtors;

(p) Accounts the collection of which Bank or Exim Bank
determines in its reasonable judgment to be doubtful; and

(p) Accounts that are excluded from the Borrowing Base under
the Borrower Agreement.

"EXIM GUARANTEE" means that certain Master Guarantee Agreement
or other agreement, as amended from time to time, the terms of which are
incorporated by reference into this Exim Agreement, pursuant to which Exim
Bank guarantees Borrower's obligations under this Exim Agreement.

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

"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.

"INTELLECTUAL PROPERTY COLLATERAL" means

(a) Copyrights, Trademarks and Patents;

(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;

(d) Any and all claims for damages by way of past, present
and future infringement 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;

(e) 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;

(f) All amendments, renewals and extensions of any of the
Copyrights, Trademarks or Patents; and

(g) 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.

"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.

"LETTERS OF CREDIT" means letters of credit issued pursuant to
Section 2.1.1.

"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 day before the first anniversary of
the Closing Date.

"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.

"PATENTS" means all patents, patent applications and like
protections including without limitation improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of
the same.

"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;

(e) Leases of Equipment pursuant to sale-leaseback
transactions, provided that sales of such leased-back equipment shall not
exceed, in the aggregate, Two Million Dollars ($2,000,000)in any fiscal year;

(f) Indebtedness secured by Permitted Liens;

(g) Capital leases or indebtedness incurred solely to
purchase equipment which is secured in accordance with clause (c) of
"Permitted Liens" below and is not in excess of the lesser of the purchase
price of such equipment or the fair market value of such equipment on the
date of acquisition;

(h) Extensions, refinancings, modifications, amendments and
restatements of any of items of Permitted Indebtedness (a) through (g) above,
provided that the principal amount thereof is not increased or the terms
thereof are not modified to impose more burdensome terms upon Borrower or its
Subsidiary, as the case may be.

"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 tile 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;

(c) Investments consisting of notes receivable of, or prepaid
royalties and other credit extensions to, customers and suppliers who are not
Affiliates, in the ordinary course of business; provided that this paragraph
(c) shall not apply to Investments by Borrower in any Subsidiary;

(d) Investments consisting of the endorsement of negotiable
instruments for deposit or collection or similar transaction in the ordinary
course of business;

(e) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers or suppliers
and in settlement of delinquent obligations of, and other disputes with,
customers or suppliers arising in the ordinary course of business; and

(f) Investments consisting of (i) compensation of employees,
officers and directors of Borrower or its Subsidiaries so long as the Board
of Directors of Borrower determines that such compensation is in the best
interests of Borrower, (ii) travel advances, employee relocation loans and
other employee loans and advances in the ordinary course of business, (iii)
loans to employees, officers or directors relating to the purchase of equity
securities of Borrower or its Subsidiaries pursuant to employee stock
purchase plans or agreements approved by Borrower's Board of Directors in an
aggregate amount not in excess of Two Hundred Fifty Thousand Dollars
($250,000) outstanding at any time; (iv) other loans to officers and
employees approved by the Board of Directors in an aggregate amount not in
excess of Two Hundred Fifty Thor, sand Dollars ($250,000) outstanding at any
time; and

(g) Other Investments (including the creation of any
Subsidiary) aggregating not in excess of Two Hundred Fifty Thousand Dollars
($250,000) at any time.

"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;

(d) Liens on Equipment leased by Borrower or any Subsidiary
pursuant to an operating or capital lease in the ordinary course of business
(including proceeds thereof and accessions thereto) incurred solely for the
purpose of financing the lease of such Equipment

(including Liens pursuant to leases permitted pursuant to Section 7.1 and
Liens arising from UCC financing statements regarding leases permitted by
this Agreement);

(e) Leases or subleases and licenses or sublicenses granted
to others in the ordinary course of Borrower's business not interfering in
any material respect with the business of Borrower and its Subsidiaries taken
as a whole, and any interest or title of a lessor, licensor or under any
lease or license provided that such leases, subleases, licenses and
sublicenses do not prohibit the grant of the security interest granted
hereunder;

(f) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.8;

(g) Easements, reservations, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances affecting real property not constituting a Material Adverse
Effect;

(h) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payments of customs duties in connection with
the importation of goods;

(i) Liens that are not prior to the Lien of Bank which
constitute rights of set-off of a customary nature or banker's Liens with
respect to amounts on deposit, whether arising by operation of law or by
contract, in connection with arrangement entered in to with banks in the
ordinary course of business; and

(j) 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 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.

10.

"REVOLVING FACILITY" means the facility under which Borrower
may request Bank to issue cash advances and letters of credit, as specified
in Sections 2.1 and 2.1.1 hereof.

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

"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 consolidated total assets of Borrower and
its Subsidiaries 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 consolidated balance sheet of
Borrower, including in any event all Indebtedness, but specifically excluding
Subordinated Debt.

"TRADEMARKS" means 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
Assignor connected with and symbolized by such trademarks.

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 ADVANCES. Subject to the terms and conditions o f
this Exim Agreement, Bank agrees to make Advances to Borrower in an amount
not to exceed the lowest of (i) the Exim Committed Line minus the face amount
of any issued and outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit), (ii) the Borrowing Base minus the face
amount of any issued and outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit) or (iii) Three Million Dollars ($3,000,000).
For purposes of

11.

this Exim Agreement "Borrowing Base" shall mean an amount equal to (i) ninety
percent (90%) of the Exim Eligible Foreign Accounts and (ii) seventy percent
(70%) of Eligible Foreign Inventory, minus the amount of any advance payments
or deposits made by Borrower's account debtors.

To evidence the Advances, Borrower shall execute and deliver to Bank on
the date hereof a promissory note (the "Note") in substantially the form
attached hereto as Exhibit B.

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 C hereto. In addition to the procedure set forth in the
preceding sentence, Bank is authorized to make Advances under this Exim
Agreement, based upon written 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
will credit the amount of Advances made under this Section 2.1 to Borrower's
deposit account. Amounts borrowed pursuant to this Section 2.1 may be repaid
and re-borrowed at any time during the term of this Exim Agreement so long as
no Event of Default has occurred and is continuing.

2.1.1 LETTERS OF CREDIT.

(a) Subject to the terms and conditions of this Exim
Agreement, Bank agrees to issue or cause to be issued standby Letters of
Credit for the account of Borrower in an aggregate face amount not to exceed
(i) the lesser of the Exim Committed Line or the Borrowing Base minus (ii)
the then outstanding principal balance of the Advances. Each Letter of
Credit shall have an expiry date no later than the Maturity Date. All
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 this Exim Agreement.

(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 Exim 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 issued for the account of Borrower.

2.1.2 LETTER OF CREDIT REIMBURSEMENT; RESERVE.

(a) 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 such letter of credit, Bank shall treat such
demand as an advance to Borrower of the

12.

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.

(b) Upon the issuance of any Letter of Credit payable in
a currency other than United States Dollars, Bank shall create a reserve
under the Exim 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 Exim Committed Line shall be
reduced by the amount of such reserve for so long as such Letter of Credit
remains outstanding.

2.2 OVERADVANCES. If, at any time or for any reason, the amount
of Obligations owed by Borrower to Bank pursuant to Section 2.1 of this Exim
Agreement is greater than the lesser of (i) the Exim Committed Line, or (ii)
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 provided in Section 2.3(b), any
Advances under this Exim Agreement shall bear interest, on the average Daily
Balance, at a rate equal to three quarters of a percentage point (0.75%)
above the Prime Rate.

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

(C) PAYMENTS. Interest hereunder shall be due and payable in
arrears on the nineteenth calendar day of each month during the term hereof.
Bank shall, at its option, charge such interest, all Exim Bank Expenses, and
all Periodic Payments against Borrower's deposit account or against the Exim
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 contemporaneously with such change by an amount equal
to such change in the Prime Rate. All interest chargeable under the Exim
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. 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 wire transfer is of

13.

immediately available federal funds and is made to the appropriate deposit
account of Bank 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 payment (other than a wire transfer of immediately
available funds) 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.

2.5 FEES. Borrower shall pay to bank the following fees:

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

(B) EXIM FEE. A facility fee equal to one and one-half
percent (1.5%) per annum of the Exim Committed Line, which fee shall be due
and fully earned upon Bank's receipt of the Exim Guarantee.

(C) EXIM BANK EXPENSES. On the Closing Date, Exim Bank
Expenses incurred through the Closing Date and, after the Closing Date, all
Exim Bank Expenses as they become due.

2.6 INCREASED COSTS. In case 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):

(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); or

(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 all in reasonable detail by Bank of a statement
in the amount and setting forth Bank's calculation thereof, which statement
shall be deemed true and

14.

correct absent manifest error; provided, however, that Borrower shall not be
liable for any such amount attributable to any period prior to the date of
hundred eighty (180) days prior to the date of such statement.

2.7 TERM. Subject to Section 13.6, this Exim Agreement shall
become effective once duly executed and authorized by Borrower and Bank and
shall continue in full force and effect for a term ending on the Maturity
Date, on which date all Obligations shall become immediately due and payable.
Notwithstanding the foregoing, Bank shall have the right to terminate this
Exim Agreement immediately and without notice upon the occurrence of an Event
of Default and Borrower shall have the right to terminate this Exim Agreement
immediately upon payment in full of its Obligations then outstanding
hereunder. Notwithstanding any termination of this Exim Agreement, all of
Bank's security interest in all of the Collateral and all of the terms and
provisions of this Exim Agreement shall continue in full force and effect
until all Obligations have been paid and performed in full, and no
termination shall impair any right or remedy of Bank, nor shall any such
termination relieve Borrower of any Obligation to Bank until all of the
Obligations have been paid and performed in full.

2.8 USE OF PROCEEDS. Borrower will use the proceeds of Advances
only for the purposes specified in the Borrower Agreement. Borrower shall
not use the proceeds of the Advances for any purpose prohibited by the
Borrower Agreement.

3. CONDITIONS OF LOANS

3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation of
Bank to make the initial Advance or issue the initial Letter of Credit is
subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, the following:

(a) this Exim Agreement, the Borrower Agreement and the Note,
each duly executed by Borrower;

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

(d) the Exim Guarantee;

(e) a financing statement;

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

(g) insurance certificate;

15.

(h) documents and agreements as specified in Section 3.1 of
the Domestic Agreement; and

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

3.2 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of Bank
to make each Advance, including the initial Advance, and to issue each Letter
of Credit is further subject to the following conditions:

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

(b) timely receipt by Bank of a copy of the executed firm
written export purchase order relating to the requested Advance, the payment
terms of which shall be acceptable to Bank;

(c) timely receipt by Bank of an Export Order as defined in
the Borrower Agreement and Borrowing Base Certificate current within five (5)
Business Days;

(d) the Exim Guarantee shall be in full force and effect; and

(e) the representations and warranties contained in Section 5
hereof shall be true and accurate in all material respects on and as of the
date of such Payment/Advance Form and on the effective date of each Advance
as though made at and as of each such date (except to the extent they relate
specifically to an earlier date, in which case such representations and
warranties shall continue to have been true and accurate as of such date),
and no Event of Default shall have occurred and be continuing, or would
result from such Advance.

The making of each Advance and issuance of each Letter of Credit shall
be deemed to be a representation and warranty by Borrower on the date of such
Advance as to the accuracy of the facts referred to in subsection (e) of this
Section 3.2.

4. CREATION OF SECURITY INTEREST

4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants 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 Exim Loan Documents. As long as an Event
of Default has not occurred and is continuing, upon (i) Borrower's
achievement of three (3) consecutive quarters of minimum net profit of at
least $1, and (ii) Borrower's receipt of cash proceeds of at least
$16,000,000 from the issuance of its equity securities after the date hereof,
Bank shall release its security interest in Intellectual Property Collateral,
and from and after such release, the Intellectual Property Collateral shall
not constitute "Collateral" for purposes of the Exim Loan Documents.

16.

4.2 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower shall
from time to time execute and deliver to Bank, at the request of Bank, 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 Exim Loan Documents.

4.3 RIGHT TO INSPECT. Each of Bank and Exim Bank (through any of
their respective 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, facilities and activities, 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. Bank shall conduct semi-annual accounts receivable audits and
physical inspections of the Inventory, the results of which audits shall be
satisfactory to Bank. Borrower will cause its officers and employees to give
their full cooperation and assistance in connection therewith.

5. REPRESENTATIONS AND WARRANTIES

Borrower represents, warrants and covenants 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, except for states
as to which any failure to so qualify would not have a Material Adverse
Effect.

5.2 DUE AUTHORIZATION: NO CONFLICT. The execution, delivery, and
performance of the Exim 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 material 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 Exim Eligible Foreign
Accounts are bona fide existing obligations. The property giving rise to
such 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 Exim Eligible Foreign Account.

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

17.

5.6 INTELLECTUAL PROPERTY. Borrower is the sole owner of the
presently registered Intellectual Property Collateral, except for
non-exclusive licenses granted by Borrower to its customers in the ordinary
course of business. Each of the registered Patents is valid and enforceable,
and no part of the Intellectual Property Collateral has been judged invalid
or unenforceable, in whole or in part, and no claim has been made that any
part of the intellectual Property Collateral violates the rights of any third
party. Except for and upon the filing with the United States Patent and
Trademark Office with respect to the Patents and Trademarks and the Register
of Copyrights with respect to the Copyrights necessary to perfect the
security interests created hereunder, and except as has been already made or
obtained, no authorization, approval or other action by, and no notice to or
filing with, any United States governmental authority or United States
regulatory body is required either (i) for the grant by Borrower of the
security interest granted hereby or for the execution, delivery or
performance of Loan Documents by Borrower in the United States or (ii) for
the perfection in the United States or the exercise by Bank of its rights and
remedies hereunder.

5.7 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 11 hereof.

5.8 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.

5.9 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 financial condition as of the date thereof
and Borrower's consolidated results of operations for the period then ended.
There has not been a material adverse change in the consolidated financial
condition of Borrower since the date of the most recent of such financial
statements submitted to Bank.

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

5.11 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 Borrower has complied with all the

18.

provisions of the Federal Fair Labor Standards Reserve System). Borrower has
complied with all the provisions of the Federal Fair Labor Borrower has not
violated any statutes, laws, ordinances or rules applicable to it, violation
of which could have a Material Adverse Effect.

5.12 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.

5.13 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.

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

5.15 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.

5.16 FRILL 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 the
Obligations, 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 reasonably be expected to have a Material Adverse
Effect. Borrower shall maintain, and shall cause each of its

19.

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 reasonably be expected to 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 xxxxx.xxxx, but in any event within thirty
(30) days after the end of each fiscal quarter, a company prepared
consolidated balance sheet and income statement covering Borrower's
consolidated operations during such period, certified by a Responsible
Officer; (b) as soon as available, but in any event within ninety (90) days
after the end of Borrower's fiscal year, audited consolidated 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
and any accompanying management reports; (c) prompt notice of any material
change in the composition of the Intellectual Property Collateral, including,
but not limited to, any subsequent ownership right of the Borrower in or to
any Copyright, Patent or Trademark not specified in any intellectual property
security agreement between Borrower and Bank or knowledge of an event that
materially adversely effects the value of the Intellectual Property
Collateral; (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 (f) such budgets, sales projections,
operating plans or other financial information as Bank may reasonably request
from time to time.

Within twenty (20) days after the last day of each month in which an
Advance is outstanding (and as a condition to Borrower requesting an
Advance), Borrower shall deliver to Bank Borrowing Base Certificates signed
by a Responsible Officer in substantially the form of Exhibit D hereto,
together with aged listings of accounts receivable and accounts payable and a
schedule of Inventory.

Borrower shall deliver to Bank with the quarterly financial statements a
Compliance Certificate signed by a Responsible Officer in substantially the
form of Exhibit E hereto.

20.

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.

21.

6.8 ADJUSTED QUICK RATIO. Borrower shall maintain, as of the last
day of each fiscal quarter, a ratio of Quick Assets to Current Liabilities,
excluding deferred revenue and customer deposits, of at least 1.25 to 1.0.
For purposes of this Section, Quick Assets shall be deemed to include cash,
cash-equivalents, and investments with maturities not exceeding 90 days held
in deposit accounts in which Bank has a Lien prior to any other Lien.

6.9 DEBT-NET WORTH RATIO. Borrower shall maintain, as of the last
day of each fiscal quarter, a ratio of Total Liabilities, excluding deferred
revenue and customer deposits, less Subordinated Debt to Tangible Net Worth
plus Subordinated Debt of not more than 1.0 to 1.0.

6.10 TANGIBLE NET WORTH. Borrower shall maintain, as of the last
day of each fiscal quarter, a Tangible Net Worth of not less than Eight
Million Dollars ($8,000,000) plus seventy-five percent of the net proceeds
from the sale of Borrower's equity securities after the Closing Date.

6.11 PROFITABILITY. Borrower shall be profitable for each fiscal
quarter, except Borrower may suffer a loss not to exceed $600,000 for one
fiscal quarter in any fiscal year.

6.12 REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS.

(a) Borrower shall register or cause to be registered (to the
extent not already registered) with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, those
intellectual property rights listed on Exhibits A, B and C to the
Intellectual Property Security Agreement delivered to Bank by Borrower in
connection with this Agreement within thirty (30) days of the date of this
Agreement. Borrower shall have no duty to register or cause to be registered
with the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, those additional intellectual property
rights developed or acquired by Borrower from time to time in connection with
any product prior to the sale or licensing of such product to any third
party, including without limitation revisions or additions to the
intellectual property rights listed on such Exhibits A, B and C.

(b) Borrower shall execute and deliver such additional
instruments and documents from time to time as Bank shall reasonably request
to perfect Bank's security interest in the Intellectual Property Collateral.

(c) Borrower shall (i) protect, defend and maintain the
validity and enforceability of the Trademarks, Patents and Copyrights, (ii)
use its best efforts to detect infringements of the Trademarks, Patents and
Copyrights and promptly advise Bank in writing of material infringements
detected and (iii) not allow any Trademarks, Patents or Copyrights to be
abandoned, forfeited or dedicated to the public without the written consent
of Bank, which shall not be unreasonably withheld, unless Bank determines
that reasonable business practices suggest that abandonment is appropriate.

22.

(d) Bank shall have the right, but not the obligation, to
take, at Borrower's sole expense, any actions that Borrower is required under
this Section 6.12 to take but which Borrower fails to take, after fifteen
(15) days' notice to Borrower. Borrower shall reimburse and indemnify Bank
for all reasonable costs and reasonable expenses incurred in the reasonable
exercise of its rights under this Section 6.12.

6.13 TERMS OF SALE. Borrower shall cause all sales of products
upon which Advances are based either to be (i) supported by one or more
irrevocable letters of credit in an amount and of a tenor, naming a
beneficiary and issued by a financial institution acceptable to Bank or (ii)
on open account to creditworthy buyers that have been preapproved in writing
by Bank and Exim Bank.

6.14 BORROWER AGREEMENT. Borrower shall comply with all of the
terms of the Borrower Agreement. In the event of any conflict or
inconsistency between any provision contained in the Borrower Agreement with
any provision contained in this Exim Agreement, the more strict provision,
with respect to Borrower, shall control.

6.15 NOTICE IN EVENT OF FILING OF ACTION FOR DEBTOR'S RELIEF.
Borrower shall notify Bank in writing within five (5) days of the occurrence
of any of the following: (1) Borrower begins or consents in any manner to any
proceeding or arrangement for its liquidation in whole or in part or to any
other proceeding or arrangement whereby any of its assets are subject
generally to the payment of its liabilities or whereby any receiver, trustee,
liquidator or the like is appointed for it or any substantial part of its
assets (including without limitation the filing by Borrower of a petition for
appointment as a debtor-in-possession under Title 11 of the U.S. Code); (2)
Borrower fails to obtain the dismissal or stay on appeal within thirty (30)
calendar days of the commencement of any proceeding arrangement referred to
in (1) above; (3) Borrower begins any other procedure for the relief of
financially distressed or insolvent debtors, or such procedure has been
commenced against it, whether voluntarily or involuntarily, and such
procedure has not been effectively terminated, dismissed or stayed within
.thirty (30) calendar days after the commencement thereof, or (4) Borrower
begins any procedure for its dissolution, or a procedure therefor has been
commenced against it.

6.16 PAYMENT IN DOLLARS. Borrower shall require payment in United
States Dollars for the products, unless Exim Bank otherwise agrees in writing.

6.17 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 Exim 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 Obligations, Borrower
will not do any of the following, or enter into any agreement to do any of
the following:

23.

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; (iii) Transfers of worn-out or obsolete
Equipment; or (iv) sale-leaseback transactions of Equipment as described in
clause; (e) of the defined term-"Permitted Indebtedness."

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 of greater than forty percent (40%). 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,
except such transactions that do not result in a change of more than 25% of
Borrower's Net Worth PROVIDED that immediately after giving effect to such
merger or consolidation, no Event of Default, or event which with the lapse
of time or giving of notice or both, would result in an Event of Default
shall have occurred and be continuing.

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. Notwithstanding the foregoing, Borrower may
redeem or repurchase its common stock and pay dividends on its preferred
stock, provided the sum of (i) the purchase price of any stock so redeemed or
repurchased and (ii) any such dividends paid on preferred stock does not
exceed, in the aggregate, $250,000 in any fiscal year.

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. 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

24.

favorable to Borrower than would be obtained in an arm's length transaction
with a nonaffiliated Person.

7.9 INTELLECTUAL PROPERTY AGREEMENTS. Borrower shall not permit
the inclusion in any material contract to which it becomes a party of any
provisions that could or might in any way prevent the creation of a security
interest in Borrower's rights and interests in any property included within
the definition of the Intellectual Property Collateral acquired under such
contracts.

7.10 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.

7.11 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
11 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.

7.12 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.

7.13 LOANS TO SHAREHOLDERS OR AFFILIATES. Without Exim Bank's
prior written consent, make any loans to any shareholder or entity affiliated
with Borrower. As used in this Section, the term "loan" does' not include
salary, rent paid to an affiliated entity owned by the shareholders, or to
other expenses incurred in the ordinary course of Borrower's business.

7.14 BORROWER AGREEMENT. Violate or otherwise fail to comply with
any provision of the Borrower Agreement.

7.15 EXIM GUARANTEE. Take any action, or permit any action to be
taken, that causes or, with the passage of time, could reasonably be expected
to cause, the Exim Guarantee to cease to be in full force and effect.

25.

8. EVENTS OF DEFAULT

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

8.1 PAYMENT DEFAULT. If Borrower fails to pay the principal of,
or any interest on, any Advances 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; CROSS DEFAULT. If Borrower fails or
neglects to perform, keep, or observe any material term, provision,
condition, covenant, or agreement contained in this Agreement, in any of the
Exim Loan Documents, the Domestic Loan Documents, the Borrower Agreement or
in any other present or future agreement between Borrower and Bank, or an
Event of Default occurs under any of the Domestic Loan Documents or the
Borrower Agreement;

8.3 MATERIAL ADVERSE CHANGE. If there occurs a material adverse
change in Borrower's business or financial condition 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 thirty (30) 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 thirty (30) days after Borrower receives notice
thereof, provided that none of the foregoing shall constitute an Event of
Default where such action or event is stayed or an adequate bond has been
posted pending a good faith contest by Borrower (provided that no Advances
will be required to be made during such cure period);

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 thirty (30) days (provided that no Advances 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 the
exercise of a right by such third party or parties to accelerate the maturity
of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand
Dollars ($250,000) or that could have a Material Adverse Effect.

26.

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 One Hundred
Fifty Thousand Dollars ($150,000) shall be rendered against Borrower and
shall remain unsatisfied and unstayed for a period of thirty (30) days
(provided that no Advances will be made prior to the satisfaction or stay of
such judgment);

8.9 MISREPRESENTATIONS. If any material misrepresentation or
material misstatement exists now or as of any date made or deemed made 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; or

8.10 EXIM GUARANTEE. If the Exim Guarantee ceases for any reason
to be in full force and effect, or if the Exim Bank declares the Exim
Guarantee void or revokes or purports to revoke any obligations under the
Exim Guarantee.

9. BANK'S RIGHTS AND REMEDIES

9.1 RIGHTS AND REMEDIES. Upon the occurrence of an Event of
Default, Bank may, at is election, without notice and without demand, do any
one or more of the following:

(a) Declare all Obligations, whether evidenced by this Exim
Agreement, by any of the other Exim Loan Documents, or otherwise, immediately
due and payable;

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

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

(d) 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;

(e) Notify customers of Borrower or other third parties to
pay any amounts owing to Borrower directly to Bank;

27.

(f) 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;

(g) 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;

(h) 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;

(i) Sell the Collateral at either a public or private sale,
or both, by way of one or more contra**s or transactions, for cash or on
terms, in such manner and at such places (including Borrower's premises) as
Bank determines is commercially reasonable;

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

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

9.2 EXIM DIRECTION. Upon the occurrence of an Event of Default,
Exim Bank shall have a right to: (i).direct Bank to exercise the remedies
specified in section 9.1 and (ii) request that Bank accelerate the maturity
of any other loans to Borrower as to which Bank has a right to accelerate.

9.3 EXIM NOTIFICATION. Bank shall have the right to immediately
notify Exim Bank in writing if it has knowledge of the occurrence of any of
the following events: (1) any failure to pay any amount due under this Loan
Exim Agreement or the Note; (2) the Borrowing Base is less than the sum of
outstanding Advances hereunder; (3) any failure to pay when due any amount
payable to Bank by the Borrower under any loan(s) extended by Bank to
Borrower;

28.

(4) the filing of an action for debtor's relief by, against, or on behalf of
Borrower; or (5) any threatened or pending material litigation against
Borrower, or any material dispute involving Borrower.

In the event that it sends such a notification to Exim Bank, Bank
shall have the right thereafter to send Exim Bank a written report on the
status of the events covered by said notification on each Business Day which
occurs every thirty (30) calendar days after the date of said notification,
until such time as Bank files a claim with Exim Bank or said default or other
events have been cured. Bank shall not have any obligation to make any
Advances or to issue any Letters of Credit following said notification to
Exim Bank, unless Exim Bank gives its written approval thereto. If directed
to do so by Exim Bank, Bank shall have a right promptly to exercise any
rights it may have against Borrower to demand the immediate repayment of all
amounts outstanding under the Exim Loan Documents.

9.4 POWER OF ATTORNEY. 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; (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; (f) to
modify, in its sole discretion, any intellectual property security agreement
entered into between Borrower and Bank without first obtaining Borrower's
approval of or signature to such modification by amending Exhibit A, Exhibit
B and Exhibit C, thereof, as appropriate, to include reference to any right,
title or interest in any Copyrights, Patents or Trademarks acquired by
Borrower after the execution hereof or to delete any reference to any right,
title or interest in any Copyrights, Patents or Trademarks in which Borrower
no longer has or claims any right, title or interest; (g) to file, in its
sole discretion, one or more financing or continuation statements and
amendments thereto, relative to any of the Collateral without the signature
of Borrower where permitted by law; and (h) to transfer the Intellectual
Property Collateral into the name of Bank or a third party to the extent
permitted under the California Uniform Commercial Code 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.

9.5 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. Upon
the occurrence and during the continuance of an Event of Default, 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.

9.6 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 of 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. Bank shall have a non-exclusive, royalty-free license
to use the Intellectual Property Collateral to the extent reasonably
necessary to permit Bank to exercise its rights and remedies upon the
occurrence of an Event of Default.

9.7 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
ca.use; (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, except for any loss, damage or destruction caused by
Bank's gross negligence or wilful misconduct.

9.8 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.

9.9 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. WAIVERS: INDEMNIFICATION

10.1 DEMAND: PROTEST. Borrower waives demand, protest, notice of
protest, notice of 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.

10.2 BANK'S LIABILITY FOR COLLATERAL. Bank shall not in any way or
manner be liable or responsible for: (a) the safekeeping of tile 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.

10.3 INDEMNIFICATION. Borrower shall defend, indemnify and hold
harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any
other party in connection with the transactions contemplated by this Exim
Agreement, and (b) all losses or Exim 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 Exim Agreement, or otherwise (including without limitation
reasonable attorneys fees and expenses), except for losses caused by Bank's
gross negligence or willful misconduct.

11. NOTICES

Unless otherwise provided in this Exim Agreement, al notices or
demands by any party relating to this Exim 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
certified mail, postage prepaid, return receipt requested, or by
telefacsimile to Borrower or to Bank, as tile case may be, at the address set
forth below:

If to Bank: Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxxxx XxXxxxxx
FAX: (000) 000-0000

If to Borrower: InVision Technologies, Inc.
0000 X. Xxxxx Xxx.
Xxxxxx Xxxx, XX 00000
Attn: Xxxx XxXxxxx
FAX: (000) 000-0000

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

31.

12. CHOICE OF LAW AND VENUE: JURY TRIAL WAIVER

This Exim Agreement shall be government 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
tile exclusive jurisdiction of the state and Federal courts located in the
County of Santa Xxxxx, State of California. BORROWER AND BANK 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 EXIM 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.

13. GENERAL PROVISIONS

13.1 SUCCESSORS AND ASSIGNS. This Exim 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 Exim 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 rights and benefits hereunder.

13.2 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 the Loan
Documents; 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 the
Loan Documents, or otherwise (including without limitation reasonable
attorneys fees and expenses), except for losses caused by Bank's gross
negligence or willful misconduct.

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

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

13.5 AMENDMENTS IN WRITING. This Exim Agreement cannot be changed
or terminated orally. Without the prior written consent of Exim Bank, no
material amendment of or deviation from the terms of this Exim Agreement or
the Note shall be made that would adversely affect the interests of Exim
Bank under the Exim Guarantee, including without limitation the rescheduling
of any payment terms provided for in this Exim Agreement. All prior
agreements, understandings, representations, warranties, and negotiations
between the

32.

parties hereto with respect to the subject matter of this Exim Agreement, if
any, are merged into this Exim Agreement.

13.6 COUNTERPARTS. This Exim 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 Exim Agreement.

13.7 SURVIVAL. All covenants, representations and warranties made
in this Exim Agreement shall continue in full force and effect so long as any
Obligations (excluding Obligations under Sections 2.6 and 10.3 to the extent
they remain inchoate at the time that outstanding payment Obligations are
paid in full) remain outstanding. The obligations of Borrower to indemnify
Bank with respect to the expenses, damages, losses, costs and liabilities
described in Section 10.3 shall survive until all applicable statute of
limitations periods with respect to actions that may be brought against Bank
have run.

13.8 CONFIDENTIALITY. In handling any confidential information
Bank shall exercise the same degree of care that it exercises with respect to
its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received
pursuant to this Agreement except that disclosure of such information may be
made (i) to the subsidiaries or affiliates of Bank in connection with their
present or prospective business relations with Borrower, (ii) to prospective
transferees or purchasers of any interest in the Loans, provided that they
have entered into a Comparable confidentiality agreement in favor of Borrower
and have delivered a copy to Borrower, (iii) as required by law, regulations,
rule or order, subpoena, judicial order or similar order, (iv) as'. may be
required in connection with the examination, audit or similar investigation
of Bank and (v) as Bank may determine in connection with the enforcement of
any remedies hereunder. Confidential information hereunder shall not include
information that either: (a) is in the public domain or in the knowledge or
possession of Bank when disclosed to Bank, or becomes part of the public
domain after disclosure to Bank through no fault of Bank; or (b) is disclosed
to Bank by a third party, provided Bank does not have actual knowledge that
such third party is prohibited from disclosing such information.

33.

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

INVISION TECHNOLOGIES, INC.

By:
-------------------------------------
Title:
----------------------------------

SILICON VALLEY BANK

By:
-------------------------------------
Title:
----------------------------------

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 he 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, service marks,
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 (other than
securities of foreign Subsidiaries), 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.

36.

EXHIBIT B

REVOLVING PROMISSORY NOTE
(EXPORT-IMPORT LINE)

4,500,000 Santa Clara, California
February 20, 1997

FOR VALUE RECEIVED, the undersigned, InVision Technologies, Inc. (the
"Borrower"), promises to pay to the order of Silicon Valley Bank ("Bank"), at
such place as the holder hereof may designate, in lawful money of the United
States of America, the aggregate unpaid principal amount of all advances
("Advances") made by Bank to Borrower under the terms of this Note, up to a
maximum principal amount of Four Million Five Hundred Thousand Dollars
($4,500,000). Borrower shall also pay interest on the aggregate unpaid
principal amount of such Advances at the rates and in accordance with the
terms of the Export-Import Bank Loan and Security Agreement between Borrower
and Bank of even date herewith, as amended from time to time (the "Loan
Agreement") on the nineteenth day of each month after an Advance has been
made. The entire principal amount and all accrued interest shall be due and
payable on February 19, 1998, or on such earlier date, as provided for in the
Loan Agreement.

Borrower irrevocably waives the right to direct the application of any
and all payments at any time hereafter received by Bank from or on behalf of
Borrower, and Borrower irrevocably agrees that Bank shall have the
continuing exclusive right to apply any and all such payments against the
then due and owing obligations of Borrower as Bank may deem advisable. In the
absence of a specific determination by Bank with respect thereto, all
payments shall be applied in the following order: (a) then due and payable
fees and expenses; (b) then due and payable interest payments and mandatory
prepayments; and (c) then due and payable principal payments and optional
prepayments.

Bank is hereby authorized by borrower to endorse on Bank's books and
records each Advance made by Bank under this Note and the amount of each
payment or prepayment of principal of each such Advance received by Bank; it
being understood, however, that failure to make any such endorsement (or any
errors in notation) shall not affect the obligations of Borrower with respect
to Advances made hereunder, and payments of principal by Borrower shall be
credited to Borrower notwithstanding the; failure to make a notation (or any
errors in notation) thereof on such books and records.

Borrower promises to pay Bank all reasonable costs and reasonable
expenses of collection of this Note and to pay all reasonable attorneys' fees
incurred in such collection or in any suit or action to collect this Note or
in any appeal thereof. Borrower waives presentment, demand, protest, notice
of protest, notice of dishonor, notice of nonpayment, and any and all other
notices and demands in connection with the delivery, acceptance, performance,
default or enforcement of this Note, as well as any applicable statute of
limitations. No delay by Bank in exercising any power or right hereunder
shall operate as a waiver of any power or right. Time is of the essence as to
all obligations hereunder.

37.

This Note is issued pursuant to the Loan Agreement, which shall govern
the rights and obligations of Borrower with respect to all obligations
hereunder.

This Note shall be deemed to be made under, and shall be construed in
accordance with and governed by, the laws of the State of California,
excluding conflicts of laws principles.

38.

EXHIBIT C

LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., CALIFORNIA TIME

TO: CENTRAL CLIENT SERVICE DIVISION DATE:
-----------------------------------

FAX#: (000) 000-0000] TIME:
-----------------------------------

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

FROM:
---------------------------------------------------------------------------
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
know to me.

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

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

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

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

39.

EXHIBIT D

BORROWING BASE CERTIFICATE

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

Borrower: InVision Technologies, Inc. Lender: Silicon Valley Bank

Commitment Amount: $4,500,000

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

FOREIGN ACCOUNTS RECEIVABLE FROM EXPORT ACTIVITIES

1. Foreign Accounts Receivable Book Value as of_____ $
------------------------
2. Additions (please explain on reverse) $
------------------------
3. TOTAL FOREIGN ACCOUNTS RECEIVABLE $
------------------------

ACCOUNTS RECEIVABLE DEDUCTIONS

4. Term in excess of 90 days $
------------------------
5. Amounts over 90 days (unless insured, then 90 days) $
------------------------
6. Balance of 50% over 90 day accounts $
------------------------
7. Credit Balances over 120 days
8. Accounts not payable in the U.S. Dollars or
payable in other than U.S. Dollars $
------------------------
9. Non-approved Government and Military Accounts $
------------------------
10. Contra Accounts $
------------------------
11. Promotion, Demo or Consignment Accounts $
------------------------
12. Intercompany/Employee and Affiliate Accounts $
------------------------
13. Accounts in the form of L/Cs, if subject items
have not yet been shipped by Borrower $
------------------------
14. Accounts arising from Inventory not originally
located in and shipped from the U.S. $
------------------------
15. Accounts arising from the sale of defense articles or items $
------------------------
16. Accounts of buyers located in or from countries
in which shipment is prohibited or no coverage available $
------------------------
17. Amounts due and collectable outside U.S. $
------------------------
18. Other exclusions $
------------------------
19. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $
------------------------
20. Eligible Accounts (No. 3 minus No. 19)
21. Loan Value of Accounts (90% of No. 20) $
------------------------

FOREIGN INVENTORY

22. Foreign Inventory Value as of ________ $
------------------------
23. Additions (please explain on reverse) $
------------------------
24. TOTAL FOREIGN INVENTORY $
------------------------
40.

FOREIGN INVENTORY DEDUCTIONS

25. Outside U.S. $
------------------------
26. Consignment $
------------------------
27. Proprietary Software $
------------------------
28. Damaged/Defective $
------------------------
29. Previously Exported $
------------------------
30. Defense Articles/Services $
------------------------
31. Prohibited County $
------------------------
32. No Coverage County $
------------------------
33. Ineligible A/R $
------------------------
34. Advance Payments/Deposits $
------------------------
35. TOTAL DEDUCTIONS $
------------------------
36. Eligible Inventory (No. 23 minus No. 35) $
------------------------
37. Loan Value of Inventory (70% of No. 36) $
------------------------

BALANCES
38. Maximum Loan Amount $
------------------------
39. Total Available [Lesser of (No. 21 plus No. 37) or No. 38] $
------------------------
40. Present balance owing on Line of Credit $
------------------------
41. Outstanding under Sublimits $
------------------------
42. RESERVE POSITION (No. 39 - (No. 40 + No. 41)) $
------------------------

The undersigned represents, and warrants that the foregoing is true, complete
and correct, and that the information reflected in this Schedule complies
with the representations and warranties set forth in the Borrower Agreement,
executed by Borrower and acknowledged by Lender, and the Export-Import Bank
Loan and Security Agreement, executed by Borrower and acknowledged by Lender
dated February 20, 1997, as may be amended from time to time, as if all
representations and warranties were made as of the date hereof, and that
Borrower is, and shall remain, in full compliance with its agreements,
covenants, and obligations under such agreement. Such representations and
warranties include, without limitation, the following: Borrower is using
disbursements only for the purpose of enabling Borrower to finance the cost
of manufacturing, producing, purchasing or selling items intended for export.
Borrower is not using disbursements for the purpose of: (a) servicing any of
Borrower's unrelated pre-existing or future indebtedness; (b) acquiring fixed
assets or capital goods for the use of Borrower's business; (c) acquiring,
equipping, equipping or renting commercial space outside the United States;
(d) supporting research and development, (e) paying salaries of non-U.S.
citizens or non-U.S. permanent residents who are located in the offices of
the United States, or (f)serving as a retainage or warranty bond.
Additionally, disbursements are not being used to finance the manufacture,
purchase or sale of any of the following: (a) Items to be sold to a buyer
located in a country in which the Export Import Bank of the United States is
legally prohibited from doing business; (b) that part of the cost of the
items which is not U.S. Content unless such

41.

part is not greater than fifty percent (50%) of the cost of the items and is
incorporated into the items in the United States; (c) defense articles or
defense services or items directly or indirectly destined for use by military
organizations designed primarily for military use (regardless of the nature
or actual use of the items); or (d) any items to be used in the construction,
alteration, operation or maintenance of nuclear power, enrichment,
reprocessing, research or heavy water production facilities.

Sincerely,

InVision Technologies, Inc.

By:
------------------------------
Name:
----------------------------
Title:
---------------------------
Date:
----------------------------

BANK USE ONLY

Received by:
----------------------------
Date:
-----------------------------------
Verified By:
----------------------------

42.

EXHIBIT E

COMPLIANCE CERTIFICATE

TO: SILICON VALLEY BANK

FROM: INVISION TECHNOLOGIES, INC.

The undersigned authorized officer of InVision Technologies, 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

Quarterly financial statements Quarterly within 30 days Yes No
Annual (CPA Audited) FYE within 90 days Yes No
A/R & A/P Agings Monthly within 20 days Yes No
A/R Audit Initial and Semi-Annual Yes No

FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES

Maintain on a Quarterly Basis:
Minimum Adj. Quick Ratio 1.25:1.0 _______:1.0(1) Yes No
Minimum Tangible Net Worth $8,000,000 $ (2) Yes No
Maximum Debt/Tangible Net Worth 1.0:1.0 _______:1.0(1) Yes No

Profitability: Quarterly(3) $1 $ Yes No

1 excluding deferred revenue and customer deposits
2 plus 75% of new equity proceeds
3 May incur one quarterly loss per year not to exceed
$600,000

Comments Regarding Exceptions: See Attached.
BANK USE ONLY

Sincerely, Received by:
-------------------------
Authorized Signer
--------------------------------
Signature Date:
--------------------------------
--------------------------------
Title Verified:
----------------------------
-------------------------------- Authorized Signer
Date
Date:
--------------------------------

Compliance Status: Yes No

43.

DISCLOSURE SCHEDULE TO LOAN AND SECURITY AGREEMENT BETWEEN
INVISION TECHNOLOGIES, INC. AND SILICON VALLEY BANK

LIENS
-----

Secured Party UCC File No. Date
------------- ----------- -----

Telogy, Inc. 0000000000 Dec. 2, 1994

Yale-Northern California, Inc. 9504860580 Feb. 10, 1995
Citicorp Dealer Finance

Instituto Bancario San Paolo di
Torino, SpA 9600260210 Dec. 28, 1995
(To be terminated on or prior to Closing Date)

Anaconda Partners, L.P. 9600260218 Dec. 28, 1995
(To be terminated on or prior to Closing Date)

Leasing Technologies
International, Inc. 0000000000 May 13, 1996

Leasing Technologies
International, Inc. 9633160900 Nov. 25, 1996

European American Bank 9626960074 Sep. 20, 1996

INVESTMENTS
-----------

Investments in subsidiaries: Imatron Federal Systems, Inc. and Invision
International, Inc.

INDEBTEDNESS
------------
Lender
-------
Telogy, Inc.

Yale-Northern California, Inc.
Citicorp Dealer Finance

Leasing Technologies
International, Inc.

Equipment purchased from Hyster to be financed.

OTHER
-----

Invision's Intellectual Property rights are subject to FAA contracts.

Revolving Promissory Note
(Export-Import Line)

$4,500,000 Santa Clara, California
February 20, 1997

FOR VALUE RECEIVED, the undersigned, InVision Technologies, Inc. (the
"Borrower"), promises to pay to the order of Silicon Valley Bank ("Bank"), at
such place as the holder hereof may designate, in lawful! money of the United
States of America, the aggregate unpaid principal amount of all advances
("Advances") made by Bank to Borrower under the terms of this Note, up to a
maximum principal amount of Four Million Five Hundred Thousand Dollars
($4,500,000). Borrower shall also pay interest on the aggregate unpaid
principal amount of such Advances at the rates and in accordance with the
terms of the Export-Import Bank Loan and Security Agreement between Borrower
and Bank of even date herewith, as amended from time to time (the "Loan
Agreement") on the nineteenth day of each month after an Advance has been
made. The entire principal amount and all accrued interest shall be due and
payable on February 19, 1998, or on such earlier date, as provided for in the
Loan Agreement.

Borrower irrevocably waives the right to direct the application of any and
all payments at any time hereafter received by Bank from or on behalf of
Borrower, and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of
a specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses;
(b) then due and payable interest payments and mandatory prepayments; and (c)
then due and payable principal payments and optional prepayments.

Bank is hereby authorized by Borrower to endorse on Bank's books and
records each Advance made by Bank under this Note and the amount of each
payment or prepayment of principal of each such Advance received by Bank; it
being understood, however, that failure to make any such endorsement (or any
errors in notation) shall not affect the obligations of Borrower with respect
to Advances made hereunder, and payments of principal by Borrower shall be
credited to Borrower notwithstanding the failure to make a notation (or any
errors in notation) thereof on such books and records.

Borrower promises to pay Bank all reasonable costs and reasonable expenses
of collection of this Note and to pay all reasonable attorneys' fees incurred
in such collection or in any suit or action to collect this Note or in any
appeal thereof. Borrower waives presentment, demand, protest, notice of
protest, notice of dishonor, notice of nonpayment, and any and all other
notices and demands in connection with the, delivery, acceptance,
performance, default or enforcement of this Note, as well as any applicable
statute of limitations. No delay by Bank in exercising any power or right
hereunder shall operate as a waiver of any power or right. Time is of the
essence as to all obligations hereunder.

This Note is issued pursuant to the .Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.

This Note shall be deemed to be made under, and shall be construed in
accordance with and governed by, the laws of the State of California,
excluding conflicts of laws principles.

INVISION TECHNOLOGIES, INC.

By: /s/
----------------------------------
Title:
----------------------------------

TABLE OF CONTENTS

PAGE

1. DEFINITIONS AND CONSTRUCTION. . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms . . . . . . . . . . . . . . . . . . . . 11

2. LOAN AND TERMS OF PAYMENT . . . . . . . . . . . . . . . . . . . 11
2.1 Revolving Advances . . . . . . . . . . . . . . . . . . . 11
2.2 Overadvances . . . . . . . . . . . . . . . . . . . . . . 13
2.3 Interest Rates, Payments, and Calculations . . . . . . . 13
2.4 Crediting Payments . . . . . . . . . . . . . . . . . . . 13
2.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 Increased Costs. . . . . . . . . . . . . . . . . . . . . 14
2.7 Term . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . 15

3. CONDITIONS OF LOANS . . . . . . . . . . . . . . . . . . . . . . 15
3.1 Conditions Precedent to Initial Advance. . . . . . . . . 15
3.2 Conditions Precedent to all Advances . . . . . . . . . . 16

4. CREATION OF SECURITY INTEREST . . . . . . . . . . . . . . . . . 16
4.1 Grant of Security Interest . . . . . . . . . . . . . . . 16
4.2 Delivery of Additional Documentation Required. . . . . . 17
4.3 Right to Inspect . . . . . . . . . . . . . . . . . . . . 17

5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 17
5.1 Due Organization and Qualification . . . . . . . . . . . 17
5.2 Due Authorization: No Conflict . . . . . . . . . . . . . 17
5.3 No Prior Encumbrances. . . . . . . . . . . . . . . . . . 17
5.4 Bona Fide Eligible-Accounts. . . . . . . . . . . . . . . 17
5.5 Merchantable Inventory . . . . . . . . . . . . . . . . . 17
5.6 Intellectual Property. . . . . . . . . . . . . . . . . . 18
5.7 Name: Location of Chief Executive Office . . . . . . . . 18
5.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . 18
5.9 No Material Adverse Change in Financial Statements . . . 18
5.10 Solvency . . . . . . . . . . . . . . . . . . . . . . . . 18
5.11 Regulatory Compliance. . . . . . . . . . . . . . . . . . 18
5.12 Environmental Condition. . . . . . . . . . . . . . . . . 19
5.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 19
5.15 Government Consents. . . . . . . . . . . . . . . . . . . 19
5.16 Frill Disclosure . . . . . . . . . . . . . . . . . . . . 19

6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 19
6.1 Good Standing. . . . . . . . . . . . . . . . . . . . . . 19
6.2 Government Compliance. . . . . . . . . . . . . . . . . . 20
6.3 Financial Statements, Reports, Certificates. . . . . . . 20
6.4 Inventory; Returns . . . . . . . . . . . . . . . . . . . 21
6.5 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.6 Insurance. . . . . . . . . . . . . . . . . . . . . . . . 21
6.7 Principal Depository . . . . . . . . . . . . . . . . . . 21
6.8 Adjusted Quick Ratio . . . . . . . . . . . . . . . . . . 22
6.9 Debt-Net Worth Ratio . . . . . . . . . . . . . . . . . . 22
6.10 Tangible Net Worth . . . . . . . . . . . . . . . . . . . 22

TABLE OF CONTENTS
(CONTINUED)
PAGE

6.11 Profitability. . . . . . . . . . . . . . . . . . . . . . 22
6.12 Registration of Intellectual Property Rights . . . . . . 22
6.13 Terms of Sale. . . . . . . . . . . . . . . . . . . . . . 23
6.14 Borrower Agreement . . . . . . . . . . . . . . . . . . . 23
6.15 Notice in Event of Filing of Action for Debtor's Relief. 23
6.16 Payment in Dollars . . . . . . . . . . . . . . . . . . . 23
6.17 Further Assurances . . . . . . . . . . . . . . . . . . . 23

7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 23
7.1 Dispositions . . . . . . . . . . . . . . . . . . . . . . 24
7.2 Change in Business . . . . . . . . . . . . . . . . . . . 24
7.3 Mergers or Acquisitions. . . . . . . . . . . . . . . . . 24
7.4 Indebtedness . . . . . . . . . . . . . . . . . . . . . . 24
7.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . 24
7.6 Distributions. . . . . . . . . . . . . . . . . . . . . . 24
7.7 Investments. . . . . . . . . . . . . . . . . . . . . . . 24
7.8 Transactions with Affiliates . . . . . . . . . . . . . . 24
7.9 Intellectual Property Agreements . . . . . . . . . . . . 25
7.10 Subordinated Debt. . . . . . . . . . . . . . . . . . . . 25
7.11 Inventory. . . . . . . . . . . . . . . . . . . . . . . . 25
7.12 Compliance . . . . . . . . . . . . . . . . . . . . . . . 25
7.13 Loans to Shareholders or Affiliates. . . . . . . . . . . 25
7.14 Borrower Agreement . . . . . . . . . . . . . . . . . . . 25
7.15 Exim Guarantee . . . . . . . . . . . . . . . . . . . . . 25

8. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 26
8.1 Payment Default. . . . . . . . . . . . . . . . . . . . . 26
8.2 Covenant Default; Cross Default. . . . . . . . . . . . . 26
8.3 Material Adverse Change. . . . . . . . . . . . . . . . . 26
8.4 Attachment . . . . . . . . . . . . . . . . . . . . . . . 26
8.5 Insolvency . . . . . . . . . . . . . . . . . . . . . . . 26
8.6 Other Agreements . . . . . . . . . . . . . . . . . . . . 26
8.7 Subordinated Debt. . . . . . . . . . . . . . . . . . . . 27
8.8 Judgments. . . . . . . . . . . . . . . . . . . . . . . . 27
8.9 Misrepresentations . . . . . . . . . . . . . . . . . . . 27
8.10 Exim Guarantee . . . . . . . . . . . . . . . . . . . . . 27

9. BANK'S RIGHTS AND REMEDIES . . . . . . . . . . . . . . . . . . . 27
9.1 Rights and Remedies. . . . . . . . . . . . . . . . . . . 27
9.2 Exim Direction . . . . . . . . . . . . . . . . . . . . . 28
9.3 Exim Notification. . . . . . . . . . . . . . . . . . . . 28
9.4 Power of Attorney. . . . . . . . . . . . . . . . . . . . 29
9.5 Accounts Collection. . . . . . . . . . . . . . . . . . . 29
9.6 Bank Expenses. . . . . . . . . . . . . . . . . . . . . . 30
9.7 Bank's Liability for Collateral. . . . . . . . . . . . . 30
9.8 Remedies Cumulative. . . . . . . . . . . . . . . . . . . 30
9.9 Demand; Protest. . . . . . . . . . . . . . . . . . . . . 30

10. WAIVERS: INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 30
10.1 Demand: Protest. . . . . . . . . . . . . . . . . . . . . 30

ii.

TABLE OF CONTENTS
(CONTINUED)
PAGE

10.2 Bank's Liability for Collateral. . . . . . . . . . . . . 31
10.3 Indemnification. . . . . . . . . . . . . . . . . . . . . 31

11. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

12. CHOICE OF LAW AND VENUE: JURY TRIAL WAIVER . . . . . . . . . . . 32

13. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 32
13.1 Successors and Assigns . . . . . . . . . . . . . . . . . 32
13.2 Indemnification. . . . . . . . . . . . . . . . . . . . . 32
13.3 Time of Essence. . . . . . . . . . . . . . . . . . . . . 32
13.4 Severability of Provisions . . . . . . . . . . . . . . . 32
13.5 Amendments in Writing. . . . . . . . . . . . . . . . . . 32
13.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . 33
13.7 Survival . . . . . . . . . . . . . . . . . . . . . . . . 33
13.8 Confidentiality. . . . . . . . . . . . . . . . . . . . . 33

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Table of Contents

EXPORT-IMPORT BANK

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