AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

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Exhibit 10.40

[SVB SILICON VALLEY BANK LOGO]

(Working Capital Line of Credit)

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

        This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of June 30, 2008 (the "Effective Date") is among (a)  SILICON VALLEY BANK , a California corporation ("Bank"), with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 with a loan production office located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton, Massachusetts 02462 (FAX 617-969-5965) and (b)  NMS COMMUNICATIONS CORPORATION , a Delaware corporation ("NMS Borrower"), NMS COMMUNICATIONS INTERNATIONAL CORPORATION , a Delaware corporation ("International Borrower"), LIVEWIRE MOBILE, INC. , a Delaware corporation ("LiveWire Borrower"), and GROOVE MOBILE, INC. , a Delaware corporation ("Groove Borrower", and individually and collectively, jointly and severally with NMS Borrower, International Borrower, and LiveWire Borrower, "Borrower"), each with its respective principal place of business at 100 Crossing Boulevard, Framingham, Massachusetts 01702 (FAX 508-271-1300), and provides the terms on which Bank shall lend to Borrower, and Borrower shall repay Bank. This Agreement amends and restates that certain Loan and Security Agreement between Bank and NMS Borrower dated as of May 6, 2008. The parties agree as follows:

         1      ACCOUNTING AND OTHER TERMS     

        Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. The term "financial statements" includes the notes and schedules. The terms "including" and "includes" always mean "including (or includes) without limitation," in this or any Loan Document. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meanings provided by the Code, to the extent such terms are defined therein.

         2      LOAN AND TERMS OF PAYMENT     

         2.1      Promise to Pay.     Borrower hereby unconditionally promises to pay Bank the unpaid principal amount of all Advances hereunder with all interest, fees and finance charges due thereon as and when due in accordance with this Agreement.

         2.1.1      Financing of Accounts.     

        (a)    Availability.     Subject to the terms of this Agreement, Borrower may request that Bank finance specific Eligible Accounts. Bank may, in its good faith business discretion, finance such Eligible Accounts by extending credit to Borrower in an amount equal to the result of the Advance Rate multiplied by the face amount of the Eligible Account (the "Advance"). Bank may, in its sole discretion, change the percentage of the Advance Rate for a particular Eligible Account on a case by case basis. When Bank makes an Advance, the Eligible Account becomes a "Financed Receivable."

        (b)    Maximum Advances.     The aggregate face amount of all Financed Receivables outstanding at any time may not exceed the Facility Amount.

        (c)    Borrowing Procedure.     Borrower will deliver an Invoice Transmittal for each Eligible Account it offers. Bank may rely on information set forth in or provided with the Invoice Transmittal.

        (d)    Credit Quality; Confirmations.     Bank may, at its option, conduct a credit check of the Account Debtor for each Account requested by Borrower for financing hereunder in order to approve any such Account Debtor's credit before agreeing to finance such Account. Bank may also verify directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts (including confirmations of Borrower's representations in Section 5.3) by means of mail, telephone or otherwise, either in the name of Borrower or Bank from time to time in its sole discretion.

        (e)    Accounts Notification/Collection.     Bank may notify any Person owing Borrower money of Bank's security interest in the funds and verify and/or collect the amount of the Account.

        (f)     Early Termination.     This Agreement may be terminated prior to the Maturity Date as follows: (i) by Borrower, effective three Business Days after written notice of termination is given to Bank; or (ii) by Bank at any time after the occurrence of an Event of Default which has not been cured or otherwise waived in writing by Bank, without notice, effective immediately. If this Agreement is terminated (A) by Bank in accordance with clause (ii) in the foregoing sentence, or (B) by Borrower for any reason, Borrower shall pay to Bank a termination fee in an amount equal to Forty Thousand Dollars ($40,000.00) (the "Early Termination Fee"). The Early Termination Fee shall be due and payable on the effective date of such termination and thereafter shall bear interest at a rate equal to the highest rate applicable to any of the Obligations. Notwithstanding the foregoing, Bank agrees to waive the Early Termination Fee if Bank agrees to refinance and redocument this Agreement under another division of Bank (in its sole and exclusive discretion) prior to the Maturity Date.

        (g)    Maturity.     This Agreement shall terminate and all Obligations outstanding hereunder shall be immediately due and payable on the Maturity Date.

        (h)    Suspension of Advances.     Borrower's ability to request that Bank finance Eligible Accounts hereunder will terminate if, in Bank's sole discretion, there has been a material adverse change in the general affairs, management, results of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations, or there has been any material adverse deviation by Borrower from the most recent business plan of Borrower presented to and accepted by Bank prior to the execution of this Agreement.

         2.2      Collections, Finance Charges, Remittances and Fees.     The Obligations shall be subject to the following fees and Finance Charges. Unpaid fees and Finance Charges may, in Bank's discretion, accrue interest and fees as described in Section 9.2 hereof.

         2.2.1      Collections.     Collections will be credited to the Financed Receivable Balance for such Financed Receivable, but if an Event of Default has occurred and is continuing, Bank may apply Collections to the Obligations in any order it chooses. If Bank receives a payment for both a Financed Receivable and a non-Financed Receivable, the funds will first be applied to the Financed Receivable and, if there is no Event of Default then existing, the excess will be remitted to Borrower, subject to Section 2.2.7.

         2.2.2      Facility Fee.     Except as otherwise agreed by Bank and Borrower in writing, a fully earned, non-refundable facility fee of Ninety Thousand Dollars ($90,000.00) is due upon the earlier of (a) December 31, 2008, or (b) the termination of this Agreement, or (c) the occurrence of an Event of Default (the " Facility Fee ").

         2.2.3      Finance Charges.     In computing Finance Charges on the Obligations under this Agreement, all Collections received by Bank shall be deemed applied by Bank on account of the Obligations three (3) Business Days after receipt of the Collections. Borrower will pay a finance charge (the "Finance Charge") on the Financed Receivable Balance which is equal to the Applicable Rate divided by 360 multiplied by the number of days each such Financed Receivable is outstanding multiplied by the outstanding Financed Receivable Balance. The Finance Charge is payable when the Advance made based on such Financed Receivable is payable in accordance with Section 2.3 hereof. During the occurrence and continuance of an Event of Default, the Applicable Rate will increase an additional four percent (4.0%) per annum effective immediately upon the occurrence of such Event of Default (the "Default Rate") and such increased rate shall remain in effect until such Event of Default has been cured or otherwise waived by Bank in writing.

         2.2.4      Collateral Handling Fee.     Borrower will pay to Bank a collateral handling fee equal to 0.375% per month of the Financed Receivable Balance for each Financed Receivable outstanding based

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upon a 360 day year (the "Collateral Handling Fee"). This fee is charged on a daily basis which is equal to the Collateral Handling Fee divided by 30, multiplied by the number of days each such Financed Receivable is outstanding, multiplied by the outstanding Financed Receivable Balance. The Collateral Handling Fee is payable when the Advance made based on such Financed Receivable is payable in accordance with Section 2.3 hereof. In computing Collateral Handling Fees under this Agreement, all Collections received by Bank shall be deemed applied by Bank on account of Obligations three (3) Business Days after receipt of the Collections. During the occurrence and continuance of an Event of Default, the Collateral Handling Fee will increase by an additional 0.50% effective immediately upon such Event of Default and such increased rate shall remain in effect until such Event of Default has been cured or otherwise waived by Bank in writing.

         2.2.5      Accounting.     After each Reconciliation Period, Bank will provide an accounting of the transactions for that Reconciliation Period, including the amount of all Financed Receivables, all Collections, Adjustments, Finance Charges, Collateral Handling Fee and the Facility Fee. If Borrower does not object to the accounting in writing within thirty (30) days after the date on which Borrower receives such accounting, it shall be considered accurate. All Finance Charges and other interest and fees are calculated on the basis of a 360 day year and actual days elapsed.

         2.2.6      Deductions.     Bank may deduct fees, Finance Charges, Advances which become due pursuant to Section 2.3, and other amounts due pursuant to this Agreement from any Advances made or Collections received by Bank.

         2.2.7      Lockbox; Account Collection Services.     

        (a)   As and when directed by Bank from time to time, at Bank's option and at the sole and exclusive discretion of Bank (regardless of whether an Event of Default has occurred), Borrower shall direct each Account Debtor (and each depository institution where proceeds of Accounts are on deposit) to remit payments with respect to the Accounts to a lockbox account established with Bank or to wire transfer payments to a cash collateral account that Bank controls (collectively, the " Lockbox "). It will be considered an immediate Event of Default if the Lockbox is not set-up and operational within forty-five (45) days from the date of such direction by Bank.

        (b)   Until such Lockbox is established, the proceeds of the Accounts shall be paid by the Account Debtors to an address consented to by Bank (and Bank hereby consents to proceeds being paid to Borrower at the address set forth in the preamble of this Agreement). Upon receipt by Borrower of such proceeds, Borrower shall immediately transfer and deliver same to Bank, along with a detailed cash receipts journal. Provided no Event of Default exists, within three (3) days of receipt of such amounts by Bank, Bank will turn over to Borrower the proceeds of the Accounts other than Collections with respect to Financed Receivables and the amount of Collections in excess of the amounts for which Bank has made an Advance to Borrower, less any amounts due to Bank, such as the Finance Charge, the Facility Fee, payments due to Bank, other fees and expenses, or otherwise; provided, however, Bank may hold such excess amount with respect to Financed Receivables as a reserve until the end of the applicable Reconciliation Period if Bank, in its discretion, determines that other Financed Receivable(s) may no longer qualify as an Eligible Account at any time prior to the end of the subject Reconciliation Period. This Section does not impose any affirmative duty on Bank to perform any act other than as specifically set forth herein. All Accounts and the proceeds thereof are Collateral and if an Event of Default has occurred and is continuing, Bank may apply the proceeds of such Accounts to the Obligations.

         2.2.8      Bank Expenses.     Borrower shall pay all Bank Expenses incurred through and after the Effective Date, when due.

         2.3      Repayment of Obligations; Adjustments.     

         2.3.1      Repayment.     Borrower will repay each Advance on the earliest of: (a) the date on which payment is received of the Financed Receivable with respect to which the Advance was made, (b) the

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date on which the Financed Receivable is no longer an Eligible Account, (c) the date on which any Adjustment is asserted to the Financed Receivable (but only to the extent of the Adjustment if the Financed Receivable remains otherwise an Eligible Account), (d) the date on which there is a breach of any warranty or representation set forth in Section 5.3, or a breach of any covenant in this Agreement or (e) the Maturity Date (including any early termination). Each payment will also include all accrued Finance Charges and Collateral Handling Fees with respect to such Advance and all other amounts then due and payable hereunder.

         2.3.2      Repayment on Event of Default.     When an Event of Default has occurred and is continuing, Borrower will, if Bank demands (or, upon the occurrence and continuance of an Event of Default under Section 8.5, immediately without notice or demand from Bank) repay all of the Advances. The demand may, at Bank's option, include the Advance for each Financed Receivable then outstanding and all accrued Finance Charges, the Early Termination Fee, Collateral Handling Fee, the Facility Fee, reasonable attorneys' and professional fees, court costs and expenses, and any other Obligations.

         2.3.3      Debit of Accounts.     Bank may debit any of Borrower's deposit accounts for payments or any amounts Borrower owes Bank hereunder. Bank shall promptly notify Borrower when it debits Borrower's accounts. These debits shall not constitute a set-off.

         2.3.4      Adjustments.     If, at any time during the term of this Agreement, any Account Debtor asserts an Adjustment, Borrower issues a credit memorandum, or any of the representations and warranties in Section 5.3 or covenants in this Agreement are no longer true in all material respects, Borrower will promptly advise Bank.

         2.4      Power of Attorney.     Borrower irrevocably appoints Bank and its successors and assigns as attorney-in-fact and authorizes Bank, to: (a) following the occurrence of an Event of Default, (i) sell, assign, transfer, pledge, compromise, or discharge all or any part of the Financed Receivables; (ii) demand, collect, sue, and give releases to any Account Debtor for monies due and compromise, prosecute, or defend any action, claim, case or proceeding about the Financed Receivables, including filing a claim or voting a claim in any bankruptcy case in Bank's or Borrower's name, as Bank chooses; and (iii) prepare, file and sign Borrower's name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics' lien or similar document; and (b) regardless of whether there has been an Event of Default, (i) notify all Account Debtors to pay Bank directly; (ii) receive, open, and dispose of mail addressed to Borrower; (iii) endorse Borrower's name on checks or other instruments (to the extent necessary to pay amounts owed pursuant to this Agreement); and (iv) execute on Borrower's behalf any instruments, documents, financing statements to perfect Bank's interests in the Financed Receivables and Collateral and do all acts and things necessary or expedient, as determined solely and exclusively by Bank, to protect or preserve, Bank's rights and remedies under this Agreement, as directed by Bank.

         3      CONDITIONS OF LOANS     

         3.1      Conditions Precedent to Initial Advance.     Bank's agreement to make the initial Advance is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:

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

        (b)   a legal opinion of each Borrower's counsel (authority/enforceability), in form and substance reasonably acceptable to Bank;

        (c)   evidence reasonably satisfactory to Bank that the insurance policies required by Section 6.4 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank;

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        (d)   company prepared consolidated and consolidating balance sheet and income statement covering Borrower and each of its Subsidiary's operations certified by a Responsible Officer and in a form reasonably acceptable to Bank for the months ended April 30, 2008 and May 31, 2008;

        (e)   payment of the fees and Bank Expenses then due and payable; and

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

         3.2      Conditions Precedent to all Advances.     Bank's agreement to make each Advance, including the initial Advance, is subject to the following:

        (a)   receipt of the Invoice Transmittal;

        (b)   Bank shall have (at its option) conducted the confirmations and verifications as described in Section 2.1.1 (d);

        (c)   (i) each of the representations and warranties in Section 5 (other than those representations and warranties in Section 5.3) shall be true, accurate and complete in all material respects on the date of the Invoice Transmittal and on the effective date of each Advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and (ii) no Event of Default shall have occurred and be continuing, or result from the Advance. Each Advance is Borrower's representation and warranty on that date that the representations and warranties in Section 5 (other than those representations and warranties in Section 5.3) remain true, accurate and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

        (d)   (i) each of the representations and warranties in Section 5.3 shall be true, accurate and complete on the date of the Invoice Transmittal and on the effective date of each Advance; and (ii) no Event of Default shall have occurred and be continuing, or result from the Advance. Each Advance is Borrower's representation and warranty on that date that the representations and warranties in Section 5.3 remain true, accurate and complete.

         4      CREATION OF SECURITY INTEREST     

         4.1      Grant of Security Interest.     Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations and the performance of each of Borrower's duties under the Loan Documents, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Borrower represents, warrants, and covenants that the security interest granted herein shall be a first priority security interest in the Collateral. If Borrower shall at any time, acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to Bank.

        If this Agreement is terminated, Bank's Lien in the Collateral shall terminate when the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time this Agreement has been terminated, Bank shall, at Borrower's sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.

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         4.2      Authorization to File Financing Statements.     Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank's interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code. Any such financing statements may indicate the Collateral in a manner consistent with Exhibit A hereto or words of similar effect, or as being of an equal or lesser scope, or with greater detail, all in Bank's discretion.

         5      REPRESENTATIONS AND WARRANTIES     

        Borrower represents and warrants as follows:

         5.1      Due Organization and Authorization.     Borrower and each of its Subsidiaries are duly existing and in good standing as Registered Organizations in their respective jurisdictions of formation and are qualified and licensed to do business and are in good standing in any jurisdiction in which the conduct of their respective business or ownership of property requires that they be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower's business. Each Borrower has previously delivered to Bank a Perfection Certificate. Borrower represents and warrants to Bank that (a) Borrower's exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower's organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower's place of business, or, if more than one, its chief executive office as well as Borrower's mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower's organizational identification number.

        The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower's organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any its Subsidiaries or any of their property or assets may be bound or affected, (iv) other than filing this Agreement with the U.S. Securities and Exchange Commission, require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect) or (v) constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could have a material adverse effect on Borrower's business.

         5.2      Collateral.     Borrower has good title, has rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. All Inventory is in all material respects of good and marketable quality, free from material defects.

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        The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate and except with respect to mobile equipment in possession of employees with an aggregate value note exceeding Fifty Thousand Dollars ($50,000.00). None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2, except for mobile equipment in possession of employees with an aggregate value not exceeding Fifty Thousand Dollars ($50,000.00). In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee (except with respect to mobile equipment in possession of employees with an aggregate value not exceeding Fifty Thousand Dollars ($50,000.00), then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its reasonable discretion.

        Except as noted on the Perfection Certificate, Borrower is not a party to, nor is bound by, any material license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower's interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Bank's right to sell any Collateral. Without prior consent from Bank, Borrower shall not enter into, or become bound by, any such license or agreement which is reasonably likely to have a material impact on Borrower's business or financial condition. Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed "Collateral" and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

         5.3      Financed Receivables.     Borrower represents and warrants for each Financed Receivable:

        (a)   Such Financed Receivable is an Eligible Account;

        (b)   Borrower is the owner of and has the legal right to sell, transfer, assign and encumber such Financed Receivable;

        (c)   The correct amount is on the Invoice Transmittal and is not disputed;

        (d)   Payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the Invoice Transmittal date;

        (e)   Such Financed Receivable is based on an actual sale and delivery of goods and/or services rendered, is due to Borrower, is not past due or in default, has not been previously sold, assigned, transferred, or pledged and is free of any liens, security interests and encumbrances other than Permitted Liens;

        (f)    There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount;

        (g)   Borrower reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings;

        (h)   Borrower has not filed or had filed against it Insolvency Proceedings and does not anticipate any filing;

        (i)    Bank has the right to endorse and/or require Borrower to endorse all payments received on Financed Receivables and all proceeds of Collateral; and

        (j)    No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank in connection with this Agreement, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank in connection with this Agreement, contains any untrue statement of a

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material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements, in light of the circumstances in which they were made, not misleading (it being recognized by Bank that projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

         5.4      Litigation.     There are no actions or proceedings pending or, to the knowledge of Borrower's Responsible Officers, threatened in writing by or against Borrower or any Subsidiary in which an adverse decision could reasonably be expected to cause a Material Adverse Change.

         5.5      No Material Deterioration in Financial Statements.     All consolidated financial statements for Borrower and any Subsidiaries delivered to Bank fairly present in all material respects Borrower's consolidated financial condition and Borrower's consolidated results of operations. There has not been any material deterioration in Borrower's consolidated financial condition since the date of the most recent financial statements submitted to Bank.

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

         5.7      Regulatory Compliance.     Borrower is not an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Neither Borrower nor any of its Subsidiaries is a "holding company" or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company" as each term is defined and used in the Public Utility Holding Company Act of 2005. Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to cause a Material Adverse Change. None of Borrower's or any Subsidiary's properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower's knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Government Authorities that are necessary to continue their respective businesses as currently conducted.

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

         5.9      Tax Returns and Payments; Pension Contributions.     Borrower and each Subsidiary have timely filed all required tax returns and reports, and Borrower and each Subsidiary have timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each Subsidiary. Borrower may defer payment of any contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writing of the commencement of, and any material development in, the proceedings, (c) posts bonds or takes any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a "Permitted Lien". Borrower is unaware of any claims or adjustments proposed for any of Borrower's prior tax years which could result in additional taxes becoming due and payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any

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liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

         5.10      Excluded Entities.     (a) The aggregate value of cash and Cash Equivalents held by Excluded Entities does not and will not exceed, in the aggregate, Fifty Thousand Dollars ($50,000.00); and (b) the aggregate value of the tangible property held by each individual Excluded Entity does not exceed, in the aggregate, Two Hundred Thousand Dollars ($200,000.00) per Excluded Entity.

         5.11      Full Disclosure.     No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank in connection with this Agreement, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank in connection with this Agreement, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements, in light of the circumstances in which they were made, not misleading (it being recognized by Bank that projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

         6      AFFIRMATIVE COVENANTS     

        Borrower shall do all of the following:

         6.1      Government Compliance.     

        (a)   Except as permitted under Section 7.3, maintain its and all its Subsidiaries' legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower's business or operations. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, noncompliance with which could have a material adverse effect on Borrower's business.

        (b)   Obtain all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in all of its property. Borrower shall promptly provide copies of any such obtained Governmental Approvals to Bank.

         6.2      Financial Statements, Reports, Certificates.     

        (a)   Deliver to Bank: (i) as soon as available, but no later than thirty (30) days after the last day of each month in which Obligations are outstanding in which any Advance has been requested (or, if no such Obligations are outstanding or Advances requested, within forty-five (45) days of the end of the current fiscal quarter), a company prepared consolidated and consolidating balance sheet and income statement covering Borrower and each of its Subsidiary's operations during the period certified by a Responsible Officer and in a form acceptable to Bank; (ii) within five (5) days of filing, copies of all statements, reports and notices made available to Borrower's security holders or to any holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission; provided that Borrower shall be required to deliver to Bank a 10-Q at least once per quarter and a 10-K at least once per year; (iii) a prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of One Hundred Fifty Thousand Dollars ($150,000.00) or more; (iv) prompt notice of any material change in the composition of the Intellectual Property Collateral, or the registration of any copyright, including any subsequent ownership right of Borrower in or to any copyright, patent or trademark not shown in the IP Agreement or knowledge of an event that materially adversely affects the value of the Intellectual Property Collateral; (v) as soon as available, but no later than forty-five (45) days following Borrower's fiscal year end, and contemporaneously with any updates thereto, board-approved financial projections for the then-current fiscal year; and (vi) budgets, sales projections, operating plans and other financial information reasonably requested by Bank.

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        (b)   Deliver to Bank with the financial statements required pursuant to Section 6.2(a)(i) above, a Compliance Certificate signed by a Responsible Officer in the form of Exhibit B , together with an aged listing of accounts receivable and accounts payable by invoice date on a consolidated and consolidating basis, in form acceptable to Bank.

        (c)   Allow Bank to audit Borrower's Collateral, including, but not limited to, Borrower's Accounts at Borrower's expense, upon reasonable notice to Borrower; provided, however, prior to the occurrence of an Event of Default, Borrower shall be obligated to pay for not more than one (1) audit per year. Borrower hereby acknowledges that the first such audit will occur on or prior to July 31, 2008. After the occurrence of an Event of Default, Bank may audit Borrower's Collateral, including, but not limited to, Borrower's Accounts at Borrower's expense and at Bank's sole and exclusive discretion and without notification and authorization from Borrower.

        (d)   Upon Bank's request, provide a written report respecting any Financed Receivable, if payment of any Financed Receivable does not occur by its due date and include the reasons for the delay.

        (e)   Deliver to Bank with the financial statements required pursuant to Section 6.2(a)(i) above, a Deferred Revenue report, in form reasonably acceptable to Bank.

         6.3      Taxes.     Borrower shall make, and cause each Subsidiary to make, timely payment of all federal, state, and local taxes or assessments (other than taxes and assessments which Borrower is contesting in good faith, with adequate reserves maintained in accordance with GAAP) and will deliver to Bank, on demand, appropriate certificates attesting to such payments.

         6.4      Insurance.     Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower's industry and location, and as Bank may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are satisfactory to Bank, it being agreed that the insurance maintained by Borrower as of the Effective Date is satisfactory to Bank as of the Effective Date. All property policies shall have a lender's loss payable endorsement showing Bank as the sole lender loss payee and waive subrogation against Bank, and all liability policies shall show, or have endorsements showing, Bank as an additional insured .All policies (or the loss payable and additional insured endorsements) shall provide that the insurer must give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy. At Bank's reasonable request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Bank's option, be payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.4 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.4, and take any action under the policies Bank deems prudent.

         6.5      Accounts.     

        (a)   To permit Bank to monitor Borrower's financial performance and condition, Borrower, and all Borrower's Subsidiaries, shall maintain Borrower's and such Subsidiaries', primary depository and operating accounts and securities accounts with Bank and Bank's affiliates and a majority of Borrower's and such Subsidiaries' cash or securities in excess of that amount used for Borrower's or such Subsidiaries' operations shall be maintained or administered through Bank and Bank's affiliates. Subject to the foregoing, Borrower and its Subsidiaries may maintain accounts with financial institutions outside of the United States with financial institutions other than Bank and Bank's affiliates. Any Guarantor shall maintain all depository and operating accounts with Bank, and, with respect to securities accounts, with an affiliate of Bank.

        (b)   Borrower shall identify to Bank, in writing, any deposit or securities account opened by Borrower with any institution other than Bank. In addition, for each such account that Borrower or Guarantor at any time opens or maintains, Borrower shall, at Bank's request and option, pursuant to

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an agreement in form and substance acceptable to Bank, cause the depository bank or securities intermediary to agree that such account is the collateral of Bank pursuant to the terms hereunder, which control agreement may not be terminated without the prior written consent of Bank. The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower's employees.

         6.6      Inventory; Returns.     Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its Account Debtors shall follow Borrower's customary practices as they exist at the Effective Date. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve more than One Hundred Fifty Thousand Dollars ($150,000.00).

         6.7      Protection of Intellectual Property Rights.     Borrower shall protect, defend and maintain the validity and enforceability of its intellectual property material to Borrower's business.

         6.8      Litigation Cooperation.     From the date hereof and continuing through the termination of this