SECOND AMENDED AND RESTATED EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT

Exhibit 10.12

SECOND AMENDED AND RESTATED
EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT

THIS SECOND AMENDED AND RESTATED EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT dated December 31, 2008 (this " EXIM Agreement "), between SILICON VALLEY BANK (" Bank "), whose address is 3003 Tasman Drive, Santa Clara, California 95054 and SOCKET MOBILE, INC., a Delaware corporation (" Borrower "), whose address is 39700 Eureka Drive, Newark, California 94560 provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties agree as follows:

RECITALS

A. Borrower and Bank have entered into that certain Amended and Restated Loan and Security Agreement (EXIM Program) dated March 24, 2008 (as the same has been amended, restated, or otherwise modified from time to time, the " Original EXIM Agreement ") pursuant to which Bank has agreed to extend and make available to Borrower certain credit facilities.

B. Borrower and Bank have agreed to amend and restate the Original EXIM Agreement in its entirety pursuant to the terms of this EXIM Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Bank and Borrower agree that the Original EXIM Agreement is amended and restated in its entirety as follows:

1. ACCOUNTING AND OTHER TERMS

Accounting terms not defined in this EXIM Agreement will be construed following GAAP Calculations and determinations must be made following GAAP. The term "financial statements" includes the notes and schedules. The terms "including" and "includes" always mean "including (or includes) without limitation" in this or any Loan Document. This EXIM Agreement shall be construed to impart upon Bank a duty to act reasonably at all times.

2. LOAN AND TERMS OF PAYMENT

2.1 Advances.

Borrower will pay Bank the unpaid principal amount of all Advances and interest on the unpaid principal amount of the Advances. Borrower acknowledges and agrees that as of the Closing Date it has no offsets or defenses against the Bank under the Original EXIM Agreement

2.1.1 Revolving Advances.

(a) Availability . Subject to the terms of this EXIM Agreement, Borrower may request that Bank finance specific EXIM Eligible Foreign Accounts. Bank may, in its sole discretion in each instance, finance EXIM Eligible Foreign 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 outstanding amount of all Advances, outstanding at any time may not exceed One Million Five Hundred Thousand Dollars ($1,500,000). Notwithstanding any other term or provision of this EXIM Agreement, the aggregate amount of Advances hereunder together with the aggregate amount of loan advances under the Domestic Loan Agreement shall not at any event exceed Two Million Five Hundred Thousand Dollars ($2,500,000).

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(c) Borrowing Procedure . To obtain an Advance, Borrower will deliver an Invoice Transmittal for each EXIM Eligible Foreign Account it offers and submit purchase orders and Export Orders in connection with such Advance. Bank may rely on information set forth in or provided with the Invoice Transmittal. Bank will credit Advances to Borrower's deposit account.

(d) Maturity . This Agreement shall terminate and all Obligations outstanding hereunder shall be immediately due and payable on the EXIM Maturity Date, when all Advances and other amounts due under this EXIM Agreement are immediately payable.

(e) 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 5.2) by means of mail, telephone or otherwise, either in the name of Borrower or Bank from time to time in its sole discretion.

(f) 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.

(g) Bank's Discretion . Notwithstanding anything to the contrary contained herein, this EXIM Agreement may be terminated by Borrower or Bank at any time, and Bank is not obligated to finance any EXIM Eligible Foreign Accounts. Bank and Borrower hereby acknowledge and agree that Bank's agreement to finance EXIM Eligible Foreign Accounts hereunder is discretionary in each instance. Accordingly, there shall not be any recourse to Bank, nor liability of Bank, on account of any delay in Bank's making of, and/or any decline by Bank to make, any loan or advance requested hereunder. If this EXIM Agreement is terminated by Bank or Borrower for any reason, Borrower shall pay to Bank a termination fee in an amount equal to one percent (1.0%) of the EXIM Facility Amount (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 re-document this EXIM Agreement under another division of Bank (in its sole and exclusive discretion) prior to the EXIM Maturity Date.

2.1.2 Certain Receivables Billed/Payable Outside of the United States.

All accounts owing to Borrower or any affiliate of the Borrower that are billed and payable outside of the United States are not eligible for borrowing hereunder. However, such accounts may possibly be considered eligible, in the sole discretion of Bank, for borrowing under this credit facility only if all of the following conditions are satisfied: (a) each such loan party is a borrower under this EXIM Agreement; (b) all proceeds relating to any and all such accounts are remitted to the United States on a monthly basis (subject to certain de minimus retention for local expenses); (c) all such accounts are derived from eligible exports originating from the United States; (d) Bank obtains a perfected first priority security interest in all assets of the applicable borrowing entity or entities in the foreign location all as determined to be acceptable to Bank in its sole discretion; (e) the Bank obtains a legal opinion from counsel to the applicable borrowing entity or entities in the foreign location as to such matters as the Bank shall in its discretion determine are necessary or desirable, including, without limitation, that the collateral lien position of the Bank is fully enforceable; (f) such accounts are denominated in United States Dollars or other currencies acceptable to Bank and the EXIM Bank; (g) not more than 50% of the Eligible Accounts hereunder may consist of those that are billed and payable outside of the United States; (h) the advance rate for any such Accounts may not in any event exceed 70%; and (i) such other terms and conditions as to advance rate and other matters as are acceptable to Bank and EXIM Bank in their sole discretion.

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2.1.3 Domestic Loan Agreement.

Bank and Borrower are parties to that certain Second Amended and Restated Loan and Security Agreement, dated the Closing Date (the " Domestic Loan Agreement "). Both this EXIM Agreement and the Domestic Loan Agreement shall continue in full forced and effect, and all rights and remedies under this EXIM Agreement and Domestic Loan Agreement are cumulative. The term "Obligations" as used in the Agreement and in the Domestic Loan Agreement shall include, without limitation, the obligation to pay when due all Credit Extensions made pursuant to this EXIM Agreement (the " EXIM Loans ") and all interest thereof and the obligation to apply when due all Credit Extensions made pursuant to the Domestic Loan Agreement (the " Domestic Loans ") and all interest thereon. Without limiting the generality of the foregoing, all "Collateral" as defined in this EXIM Agreement and defined in the Domestic Loan Agreement shall secure all EXIM Loans and all Domestic Loans and all interest thereon, and all other Obligations. Any Event of Default under this EXIM Agreement shall also constitute an Event of Default under the Domestic Loan Agreement and any Event of Default under the Domestic Loan Agreement shall constitute an Event of Default under this EXIM Agreement. In the event Bank assigns its right under the Domestic Loan Agreement or its rights under this EXIM Agreement to any third party, including without limitation, EXIM Bank, whether before or after the occurrence of any Event of Default, Bank shall have the right (but not any obligation), it its sole discretion, to allocate and apportion Collateral to this EXIM Agreement and/or to specify the priorities of the respective security interests in such Collateral between itself and the assignee, all without notice to, or consent of, Borrower.

2.2 Collections, Interest Rate, Lockbox.

(a) Collections . Collections will be credited to the Financed Receivable Balance for such Financed Receivable, but if there is an Event of Default, 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(d).

(b) Finance Charges . In computing Finance Charges on the Obligations under this EXIM 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. Because the Advance Rate may differ based on the type of EXIM Eligible Account, the Bank will from time to time, adjust the Finance Charge on Advances made at an Advance Rate of 60% so that the effective Finance Charge on such Advances is reasonably equivalent to the Finance Charge which applies to Advances based on an 80% Advance Rate. After an Event of Default, the Applicable Rate will increase an additional five percent (5.0%) per annum effective immediately upon the occurrence of such Event of Default.

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(c) Lockbox . 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 on the Closing Date.

(d) Account Collection Services . 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 or an event that with notice or lapse of time will be an Event of Default, 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 occurs, Bank may apply the proceeds of such Accounts to the Obligations.

2.3 Repayment of Obligations; Adjustments.

(a) Repayment . Borrower will repay each Advance on the earliest of: (i) the date on which payment is received of the Financed Receivable with respect to which the Advance was made, (ii) the date on which the Financed Receivable is no longer an EXIM Eligible Foreign Account, (iii) 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), (iv) the date on which there is a breach of any warranty or representation set forth in Section 5.2 , or a breach of any covenant in this EXIM Agreement or (v) the EXIM Maturity Date (including any early termination). Each payment will also include all accrued Finance Charges, Collateral Handling Fees and all other amounts then due and payable hereunder or under the Domestic Loan Agreement.

(b) Repayment on Event of Default . When there is an Event of Default, Borrower will, if Bank demands (or, upon the occurrence of an Event of Default under Section 8, 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, Collateral Handling Fee, the Early Termination Fee, attorneys' and professional fees, court costs and expenses, and any other Obligations.

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(c) 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.

(d) Adjustments . If, at any time during the term of this EXIM Agreement, any Account Debtor asserts an Adjustment, Borrower issues a credit memorandum, or any of the representations and warranties in Section 5 or covenants in this EXIM Agreement are no longer true in all material respects, Borrower will promptly advise Bank.

2.4 Fees.

Borrower will pay:

(a) Bank Expenses . All Bank Expenses incurred through and after the date of this EXIM Agreement, (including reasonable attorneys' fees and expenses) payable when due.

(b) EXIM Bank Expenses . On the Closing Date, EXIM Bank Expenses incurred through the date hereof.

(c) Collateral Handling Fee . Borrower will pay to Bank a collateral handling fee equal to .70% per month of the Financed Receivable Balance for each Financed Receivable outstanding based 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 EXIM 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. After an Event of Default, the Collateral Handling Fee will increase an additional 0.50% effective immediately upon such Event of Default.

2.5 Use of Proceeds.

Borrower will use the proceeds of the Advances only for the purposes specified in the Borrower Agreement. Borrower will not use the proceeds of the Advances for any purpose prohibited by the Borrower Agreement.

2.6 EXIM Guarantee.

To facilitate the financing of EXIM Eligible Foreign Accounts, the EXIM Bank has agreed to guarantee the EXIM Advances made under this EXIM Agreement, pursuant to a Master Guarantee Agreement, Loan Authorization Agreement and (to the extent applicable) Delegated Authority Letter Agreement (collectively, the " EXIM Guarantee "). If, at any time after the EXIM Guarantee has been entered into by Bank, for any reason other than due to any action or inaction of Borrower under the EXIM Guarantee, (a) the EXIM Guarantee shall cease to be in full force and effect, or (b) if the EXIM Bank declares the EXIM Guarantee void or revokes any obligations thereunder or denies liability thereunder, and any Overadvance results from either of the foregoing, Bank shall provide notice of such Overadvance to Borrower, and Borrower shall immediately pay the amount of the excess to Bank. If, at any time after the EXIM Guarantee has been entered into by Bank, for any reason other than the one described in the foregoing sentence, (x) the EXIM Guarantee shall cease to be in full force and effect, or (y) the EXIM Bank declares the EXIM Guarantee void or revokes any obligations thereunder or denies liability thereunder, any such event shall constitute an Event of Default under this EXIM Agreement. Nothing in any confidentiality agreement in this EXIM Agreement or in any other agreement shall restrict Bank's right to make disclosures and provide information to the EXIM Bank in connection with the EXIM Guarantee.

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2.7 EXIM Borrower Agreement.

Borrower shall execute and deliver a Borrower Agreement, in the form specified by the EXIM Bank, in favor of Bank and the EXIM Bank, together with an amendment thereto approved by the EXIM Bank to conform certain terms of such Borrower Agreement to the terms of this EXIM Agreement (as amended, the " Borrower Agreement "). When the Borrower Agreement is entered into by Borrower and the EXIM Bank and delivered to Bank, this EXIM Agreement shall be subject to all of the terms and conditions of the Borrower Agreement, all of which are hereby incorporated herein by this reference. From and after the time Borrower and the EXIM Bank have entered into the Borrower Agreement and delivered the same to Bank, Borrower expressly agrees to perform all of the obligations and comply with all of the affirmative and negative covenants and all other terms and conditions set forth in the Borrower Agreement as though the same were expressly set forth herein. In the event of any conflict between the terms of the Borrower Agreement (if then in effect) and the other terms of this EXIM Agreement, whichever terms are more restrictive shall apply. Borrower acknowledges and agrees that it has received a copy of the Loan Authorization Agreement which is referred to in the Borrower Agreement. If the Borrower Agreement is entered into by Borrower and the EXIM Bank and delivered to Bank, Borrower agrees to be bound by the terms of the Loan Authorization Agreement, including, without limitation, by any additions or revisions made prior to its execution on behalf of EXIM Bank. Upon the execution of the Loan Authorization Agreement by EXIM Bank and Bank, it shall become an attachment to the Borrower Agreement. Borrower shall reimburse Bank for all fees and all out of pocket costs and expenses incurred by Bank with respect to the EXIM Guaranty and the Borrower Agreement, including without limitation all facility fees and usage fees, and Bank is authorized to debit any of Borrower's deposit accounts with Bank for such fees, costs and expenses when paid by Bank.

3. CONDITIONS OF LOANS

3.1 Conditions Precedent to Initial Advance.

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

3.2 Conditions Precedent to all Advances.

Bank's obligations 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(e) and

(c) each of the representations and warranties in Section 5 shall be true on the date of the Invoice Transmittal and on the effective date of each Advance (except for those representations and warranties that relate specifically to an earlier date) and 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 remain true (except for those representations and warranties that relate specifically to an earlier date); and

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(d) the EXIM Guarantee will be in full force and effect.

4. CREATION OF SECURITY INTEREST

4.1 Grant of Security Interest.

Borrower grants Bank a continuing security interest in all presently existing and later acquired Collateral to secure all Obligations and performance of each of Borrower'