PUMATECH INC
LOAN AND SECURITY AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>p13874ex10-1.txt
<DESCRIPTION>LOAN AND SECURITY AGREEMENT
<TEXT>

                                                                    EXHIBIT 10.1


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                                 PUMATECH, INC.


                           LOAN AND SECURITY AGREEMENT
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                                         46


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This LOAN AND SECURITY  AGREEMENT  ("Agreement") is entered into as of March 29,
2001, by and between IMPERIAL BANK ("Bank") and PUMATECH, INC. ("Borrower").

                                    RECITALS

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

                                    AGREEMENT

The parties agree as follows:

         1. DEFINITIONS AND CONSTRUCTION.

                  1.1  Definitions.  As used in this Agreement,  all capitalized
terms shall have the definitions set forth on Exhibit A.

                  1.2 Accounting  Terms.  All accounting  terms not specifically
defined  on  Exhibit  A shall  be  construed  in  accordance  with  GAAP and all
calculations  shall  be  made in  accordance  with  GAAP.  The  term  "financial
statements" shall include the accompanying notes and schedules.

         2. LOAN AND TERMS OF PAYMENT.

                  2.1 Credit Extensions.

                           (a) Promise to Pay. Borrower promises to pay to Bank,
in lawful money of the United States of America,  the aggregate unpaid principal
amount of all Credit Extensions made by Bank to Borrower, together with interest
on the unpaid principal amount of such Credit  Extensions at rates in accordance
with the terms hereof.  Notwithstanding  any other  provisions in this Agreement
the  maximum  amount of credit  extended  by Bank to  Borrower  shall not exceed
$10,000,000.

                           (b) Revolving Advances. Subject to and upon the terms
and conditions of this Agreement:

                                    (i) Non-Formula Amount. Borrower may request
Advances in an aggregate  outstanding  amount not to exceed  $2,500,000 less any
amounts  outstanding  under the  Letter of Credit  Sublimit  the  Merchant  Card
Services  Sublimit,  the Foreign Exchange  Sublimit and the Credit Card Services
Sublimit.

                                    (ii)  Formula   Amount  for  Advances  Above
$2,500,000.  Subject to Section 2.1(b)(vi),  Borrower may request Advances in an
aggregate  outstanding  amount over  $2,500,000  provided all Advances do not to
exceed the lesser of (A) the Committed Revolving Line or (B) the Borrowing Base,
less any amounts  outstanding  under the Letter of Credit  Sublimit the Merchant
Card  Services  Sublimit,  the  Foreign  Exchange  Sublimit  and the Credit Card
Services Sublimit.

                                    (iii) Repayment.  Amounts borrowed  pursuant
to this Section  2.1(b) shall be  immediately  due and payable on the  Revolving
Maturity Date.

                                    (iv)  Optional  Prepayments.  Subject to the
terms of this  Agreement,  Borrower may, at any time from time to time,  ratable
prepay  Loans in whole or in part,  (i) in the case of Prime Rate Loans,  at any
time and in any  amount,  and (ii) in the case of LIBOR Loans only at the end of
any applicable Interest Period.

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                                    (v) Notice of  Borrowing  Requirement.  Each
borrowing  of a  Prime  Rate  Loan  shall  be made on a  Business  Day and  each
borrowing of a LIBOR Loan shall be made on a LIBOR Business Day.

                                    (vi) Timing and Reporting  Requirements  for
Requests for Advances  Over  $2,500,000.  If the  aggregate  outstanding  amount
Credit Extensions  exceeds  $2,500,000,  Bank will have no obligation to make an
Advance unless Borrower has submitted the reports specified in Section 6.3(a) of
this Agreement within twenty (20) days prior to the request for such Advance.

                                    (vii)  Form of  Request.  Whenever  Borrower
desires an Advance,  Borrower  will notify Bank by  facsimile  transmission  and
telephone no later than 11:00 a.m.  Pacific Time, on the Business Day before the
Advance is to be made if the  Advance  is to be a Prime  Rate Loan.  For a LIBOR
Loan  Borrower  shall  irrevocably  notify Bank by  facsimile  transmission  and
telephone by 9:00 a.m. Pacific Time at least three (3) LIBOR Business Days prior
to the Advance is to be made. Each such telephone notification shall be promptly
confirmed by a Payment/Advance Form in substantially the form of Exhibit C. Bank
is authorized to make Advances  under this  Agreement,  based upon  instructions
received from a Responsible  Officer or a designee of a Responsible  Officer, or
without instructions if in Bank's discretion such Advances are necessary to meet
Obligations  which have become due and remain unpaid.  Bank shall be entitled to
rely on any telephonic notice given by a person who Bank reasonably  believes to
be a Responsible Officer or a designee thereof, and Borrower shall indemnify and
hold Bank  harmless for any damages or loss suffered by Bank as a result of such
reliance. Bank will credit the amount of Advances made under this Section 2.1(b)
to Borrower's  deposit  account  identified  by Borrower in the  Payment/Advance
Form.  After giving effect to any Advance,  there may not be more than three (3)
LIBOR Loans then outstanding.

                                    (viii) Letter of Credit Sublimit. Subject to
the  availability  under the Committed  Revolving  Line,  and in reliance on the
representations  and  warranties of Borrower set forth  herein,  at any time and
from time to time from the date hereof  through  the  Business  Day  immediately
prior to the  Revolving  Maturity  Date,  Bank  shall  issue for the  account of
Borrower  such standby  letters of credit  ("Letters of Credit") as Borrower may
request by delivering to Bank a duly executed  letter of credit  application  on
Bank's  standard  form;  provided,  however,  that the  outstanding  and undrawn
amounts  under all such  Letters of Credit (i) shall not at any time  exceed the
Letter of Credit Sublimit,  and (ii) shall be deemed to constitute  Advances for
the purpose of calculating  availability under the Committed Revolving Line. Any
drawn but  unreimbursed  amounts under any Letters of Credit shall be charged as
Advances  against the  Committed  Revolving  Line.  Unless  Borrower  shall have
deposited with Bank cash collateral in an amount sufficient to cover all undrawn
amounts  under each such Letter of Credit and Bank shall have agreed in writing,
no  Letter of  Credit  shall  have an  expiration  date  that is later  than the
Revolving  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 application and letter of credit  agreement.  Borrower
will pay any standard  issuance and other fees that Bank notifies  Borrower will
be charged for issuing and processing Letters of Credit.

                                    (ix)  Merchant   Card   Services   Sublimit.
Subject to the terms and  conditions  of this  Agreement,  Borrower  may request
merchant card services from Bank, (the "Merchant Card Services").  The aggregate
limit of the  merchant  credit  card  processing  reserves  shall not exceed the
Merchant Card Services Sublimit,  provided that availability under the Committed
Revolving Line shall be reduced by the aggregate  limits of the amounts advanced
for merchant credit card processing reserves. In addition, Bank may, in its sole
discretion,  charge as Advances  any amounts that become due or owing to Bank in
connection with the Merchant Card Services.  The terms and conditions (including
repayment and fees) of such Merchant Card Services shall be subject to the terms
and conditions of the Bank's standard forms of application and agreement for the
Merchant Card  Services,  which  Borrower  hereby  agrees to execute  before any
advances under Merchant Card Sublimit are made. Such services shall terminate on
the Revolving Maturity Date.

                                    (x) Foreign  Exchange  Sublimit.  Subject to
the terms  and  conditions  of this  Agreement,  Borrower  may  request  foreign
exchange services ("Foreign Exchange  Services") up to the amount of the Foreign
Exchange  Sublimit  for  issuance  of  forward  contracts  up  to a  maximum  of
$3,000,000. The availability under the Committed Revolving Line shall be reduced
by 10% of the  aggregate  amounts of issued  forward  contracts  with a due date
prior to the  Revolving  Maturity  Date.  In  addition,  Bank  may,  in its sole
discretion,  charge as

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Advances  any amounts  that become due or owing to Bank in  connection  with the
Foreign Exchange  Services.  The terms and conditions  (including  repayment and
fees) of such  Foreign  Exchange  Services  shall be  subject  to the  terms and
conditions of the Bank's  standard  forms of  application  and agreement for the
Foreign  Exchange  Services,  which Borrower hereby agrees to execute before any
advances  under  Foreign  Exchange  Sublimit  are  made.  After and  during  the
continuance  of an  Event  of  Default,  Bank  may,  in its  sole  and  absolute
discretion and in addition to all other Bank  remedies,  terminate any or all of
the Exchange Contracts. Borrower agrees to indemnify and hold harmless Bank from
and against all loss, costs and expense  (including  reasonable  attorneys fees)
associated with any such termination of any Exchange Contract.

                                    (xi) Credit Card Services Sublimit.  Subject
to the terms and conditions of this  Agreement,  Borrower may request  corporate
credit cards from Bank (the "Credit Card Services").  The aggregate limit of the
corporate  credit cards and shall not exceed the Credit Card Services  Sublimit,
provided that availability  under the Committed  Revolving Line shall be reduced
by the  aggregate  limits of the corporate  credit cards issued to Borrower.  In
addition, Bank may, in its sole discretion,  charge as Advances any amounts that
become due or owing to Bank in  connection  with the Credit Card  Services.  The
terms and conditions (including repayment and fees) of such Credit Card Services
shall be subject to the terms and  conditions  of the Bank's  standard  forms of
application  and agreement for the Credit Card Services,  which Borrower  hereby
agrees to execute. After and during the continuance of an Event of default, Bank
may,  in its sole and  absolute  discretion  and in  addition  to all other Bank
remedies,  terminate  all  such  corporate  credit  cards.  Borrower  agrees  to
indemnify and hold  harmless  Bank from and against all loss,  costs and expense
(including  reasonable  attorneys fees)  associated with any such termination of
any  corporate  credit card.  Such  services  shall  terminate on the  Revolving
Maturity Date.

                  2.2  Overadvances.  If the aggregate amount of the outstanding
Advances  exceeds the lesser of the  Committed  Revolving  Line or the Borrowing
Base at any time, Borrower shall pay to Bank, in cash, the amount of such excess
and no later than 12:00 p.m. on the next business day following the overadvance.

                  2.3 Interest Rates, Payments, and Calculations.

                           (a) Interest Rates.

                                    (i) Advances. Except as set forth in Section
2.3 (b), the Advances  shall bear  interest,  on the  outstanding  daily balance
thereof,  at a rate equal to either the Prime Rate or the LIBOR Rate as selected
by Borrower as provided in Section 2.1 above.

                                    (ii) If  Bank  determines  that no  adequate
basis  exists  for  determining  the LIBOR  Rate or that the LIBOR Rate will not
adequately  and fairly  reflect the cost to Bank of funding  loans,  or that any
applicable  law or  regulation  or  compliance  therewith  by Bank  prohibits or
restricts or makes  impossible  the charging of interest based on the LIBOR Rate
and Bank so  notifies  Borrower,  then until  Bank  notifies  Borrower  that the
circumstances  giving rise to such  suspension no longer exist,  interest  shall
accrue and be payable on the unpaid principal balance of this Agreement from the
date Bank so notifies Borrower until the Committed  Revolving Line Maturity Date
(whether by acceleration,  declaration, extension or otherwise) at a fluctuating
rate of interest equal to the Prime Rate of Bank.  Bank shall not be responsible
for any costs or expense incurred by Borrower as a result of such notification.

                           (b) Late Fee;  Default  Rate.  If any  payment is not
made within ten days after the date such payment is due, Borrower shall pay Bank
a late fee equal to the lesser of (i) 5% of the amount of such unpaid  amount or
(ii) the maximum  amount  permitted  to be charged  under  applicable  law.  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  percentage  points
above the interest rate  applicable  immediately  prior to the occurrence of the
Event of Default.

                           (c)  Payments.   All  accrued  but  unpaid   interest
hereunder shall be due and payable on the Interest  Payment Date during the term
hereof. Bank shall, at its option, charge such interest,  all Bank Expenses, and
all Periodic Payments against any of Borrower's  deposit accounts or against the
Committed  Revolving 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.

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

                           (e)  Maximum  Interest  Rate.  In no event  shall the
interest rate and other charges  hereunder  exceed the highest rate  permissible
under  any  law  which a  court  of  competent  jurisdiction  shall,  in a final
determination, deem applicable hereto. In the event that such a court determines
that Bank has  received  interest and other  charges  hereunder in excess of the
highest rate applicable hereto,  such excess shall be deemed received on account
of, and shall  automatically be applied to reduce,  the Obligations,  other than
interest,  in the inverse order of maturity,  and the provisions hereof shall be
deemed  amended to provide for the  highest  permissible  rate.  If there are no
Obligations outstanding, Lenders shall refund to Borrower such excess.

                           (f)  Conversion  and  Continuation  of Elections  for
Advances.

                                    (i)  By  following  the  same   notification
procedures set forth in Section 2.1(b)(vii) above,  Borrower may elect as of any
Business  Day,  in the case of Prime  Rate  Loans,  or as of the last day of the
applicable  Interest  Period in the case of LIBOR Loans (i) elect to convert any
Prime  Rate  Loans in an  amount  not  less  than  $1,000,000,  or that is in an
integral  multiple of $500,000 in excess thereof into LIBOR Loans; (ii) elect to
convert  any LIBOR Loans  expiring  on such day into Prime Rate Loans;  or (iii)
elect to continue any LIBOR Loans having Interest  Periods expiring on such day;
provided,  however,  that if an any time the aggregate  amount of LIBOR Loans is
reduced, by payment,  prepayment,  or otherwise to be less than $1,000,000,  the
right of Borrower to continue such Loans as, and convert such Loans into,  LIBOR
Loans shall be terminated during such period;  provided,  further,  that a LIBOR
Loan may only be  converted to a Prime Rate Loan or continued as a LIBOR Loan on
the expiration date of the Interest Period applicable thereto; provided further,
however,  that no outstanding Loan, or portion thereof,  may be continued as, or
be converted into, a LIBOR Loan in the event that, on the earlier of the date of
the  delivery of the Notice of  Conversion  or  Continuation  or the  telephonic
notice in respect  thereof,  any Event of Default or Unmatured  Event of Default
has occurred and is  continuing;  provided  further,  however,  that if Borrower
fails to deliver the  appropriate  Notice of Conversion or  Continuation  or the
telephonic  notice in respect  thereof  pursuant to the required  notice  period
before the  expiration of the Interest  Period of a LIBOR Loan,  such LIBOR Loan
shall  automatically  be  converted  to a Prime  Rate  Loan;  provided  further,
however,  that no  outstanding  portion  of a Loan may be  continued  as,  or be
converted into, a LIBOR Loan in the event that,  after giving effect to any such
conversion  or  continuation,  there  would be more than  three (3) LIBOR  Loans
outstanding.

                                    (ii) Borrower shall give  telephonic  notice
of any proposed continuation or conversion pursuant to this Section 2.3 followed
by a Notice of  Conversion  or  Continuation,  given by  facsimile  or  personal
service,  delivered to Bank at the address set forth herein,  no later than 9:00
a.m., California time, on the Business Day which is the proposed conversion date
(in the case of a conversion  to a Prime Rate Loan) and no later than 9:00 a.m.,
California  time,  three (3) LIBOR  Business  Days in  advance  of the  proposed
conversion  or  continuation  date  (in  the  case  of  a  conversion  to,  or a
continuation  of, a LIBOR Loan). If such Notice of Conversion or Continuation is
received by Bank not later than 9:00 a.m.,  California time, on a LIBOR Business
Day,  such day shall be treated as the first LIBOR  Business Day of the required
notice  period.  In any other event,  such notice will be treated as having been
received at the opening of business of the next LIBOR  Business Day. A Notice of
Conversion  or  Continuation  shall  specify:  (1) the  proposed  conversion  or
continuation  date (which  shall be a Business Day or a LIBOR  Business  Day, as
applicable);  (2) the  aggregate  amount of the Loan or Loans to be converted or
continued; (3) the nature of the proposed conversion or continuation; and (4) in
the case of a  conversion  to or  continuation  of a LIBOR Loan,  the  requested
Interest Period

                                    (iii) Bank shall not incur any  liability to
Borrower  in acting  upon any  telephonic  notice  referred  to above which Bank
believes in good faith to have been given by a  Responsible  Officer of Borrower
or for  otherwise  acting in good faith under this  Section  2.3.  Any Notice of
Conversion or Continuation  (or telephonic  notice in respect  thereof) shall be
irrevocable  and  Borrower  shall be bound to convert or continue in  accordance
therewith.

                  2.4  LIBOR  Costs.  Borrower  shall  reimburse  Bank  for  any
increase in Bank's  costs (which shall  include,  but not be limited to,  taxes,
other than taxes imposed on the overall net income of Bank, fees or

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charges),  or any loss or expense (including,  without  limitation,  any loss or
expense  incurred by reason of the liquidation or  re-employment  of deposits or
other  funds  acquired  by Bank to fund or maintain  outstanding  the  principal
amount of the Loans)  incurred by it directly or indirectly  resulting  from the
making of any LIBOR Loans due to: (a) the modification,  adoption,  or enactment
of any law,  rule,  regulation  or treaty or the  interpretation  thereof by any
governmental or other  authority  (whether or not having the force of law) which
becomes effective after the date hereof; (b) the modification or new application
of  any  law,  regulation  or  treaty  or  the  interpretation  thereof  by  any
governmental or other  authority  (whether or not having the force of law) which
becomes effective after the date hereof; (c) compliance by Bank with any request
or directive  (whether or not having the force of law) of any monetary or fiscal
agency  or  authority  which  becomes  effective  after  the  date  hereof;  (d)
violations by Borrower of the terms of this Agreement;  or (e) any prepayment of
a LIBOR Loan at any time  prior to the end of the  applicable  Interest  Period,
including pursuant to Section 9.1.

                  The  amount  of such  costs,  losses,  or  expenses  shall  be
determined solely by Bank based upon the assumption that Bank funded one hundred
percent  (100%) of each LIBOR Loan in the LIBOR market.  In  attributing  Bank's
general costs relating to its eurocurrency  operations to any transaction  under
this  Agreement or averaging  any costs over a period of time,  Bank may use any
reasonable  attribution  or averaging  methods  which it deems  appropriate  and
practical.  Bank shall  notify  Borrower  of the amount  Bank  pursuant  to this
Section 2.4 in respect of any LIBOR Loan as soon as practicable but in any event
within  forty-five  (45) days after the last day of the Interest  Period of such
LIBOR Loan,  and Borrower  shall pay to Bank the amount due within  fifteen (15)
days of its receipt of such  notice.  A  certificate  as to the amounts  payable
pursuant to the foregoing  sentence  together with whatever detail is reasonably
available to Bank shall be submitted  by Bank to  Borrower.  Such  determination
shall,  if not objected to within ten (10) days, be conclusive  and binding upon
Borrower in the absence of manifest error. If Bank claims increased costs, loss,
or expenses  pursuant to this Section 2.4,  then Bank, if requested by Borrower,
shall  use  reasonable  efforts  to take such  steps  that  Borrower  reasonably
requests, including designating different Lending Offices, as would eliminate or
reduce the amount of such  increased  costs,  losses,  or  expenses,  so long as
taking such steps would not, in the  reasonable  judgment of Bank,  otherwise be
disadvantageous  to Bank.  Any recovery by Bank or its Lending Office of amounts
previously  borne by  Borrower  pursuant  to this  Section 2.4 shall be promptly
remitted, without interest, to Borrower by Bank.

                  2.5 Illegality; Impossibility. Notwithstanding anything herein
to the contrary,  if Bank determines (which  determination  shall be conclusive)
that any law, rule, regulation,  treaty or directive,  or any change therein, or
any change in the  interpretation or administration  thereof by any Governmental
Authority,  central bank or comparable agency charged with the interpretation or
administration  thereof,  or compliance by Bank (or its Lending Office) with any
request  or  directive  (whether  or not  having  the  force of law) of any such
authority,  central  bank  or  comparable  agency  shall  make  it  unlawful  or
impossible for Bank (or its Lending  Office) to fund or maintain a LIBOR Loan in
the LIBOR  market or to continue  such funding or  maintaining,  then Bank shall
give notice of such  circumstances  to Borrower  and (a) in the case of each and
every LIBOR Loan which is  outstanding,  Borrower  shall,  if requested by Bank,
prepay  such  LIBOR  Loan(s) on or before the date  specified  in such  request,
together  with  interest  accrued  thereon,  and the date so specified  shall be
deemed  to be the  last day of the  Interest  Period  of that  LIBOR  Loan,  and
concurrent  with any such  prepayment,  Bank  shall  make a Prime  Rate  Loan to
Borrower in the  principal  amount  equal to the  principal  amount of the LIBOR
Loans so prepaid,  and (b) Bank shall not be obligated to make any further LIBOR
Loans until Bank determines that it would no longer be unlawful or impossible to
do so.

                  2.6 Disaster. Notwithstanding anything herein to the contrary,
if Bank determines  (which  determination  shall be conclusive) that (a) Bank is
unable to  determine  the LIBOR Rate with  respect to any Notice of Borrowing or
Notice of Conversion or Continuation selecting the LIBOR Rate because quotations
of  interest  rates for the  relevant  deposits  are not being  provided  in the
relevant  amounts or for the relative  maturities or (b) the LIBOR Rate will not
adequately  reflect the cost to Bank of making or funding LIBOR Loans,  then (i)
the right of  Borrower  to select the LIBOR Rate shall be  suspended  until Bank
notifies  Borrower  that the  circumstances  causing such  suspension  no longer
exist,  and (ii)  Borrower  shall repay in full the then  outstanding  principal
balance of all LIBOR Loans,  together with interest accrued thereon, on the last
day of the Interest Period applicable to each such LIBOR Loan.

                  2.7  Increased  Risk-Based  Capital  Cost.  If the  amount  of
capital  required or expected to be maintained by Bank or any Person directly or
indirectly  owning or  controlling  Bank  (each a  "Control  Person"),  shall

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be  affected  by:  (i)  the  introduction  or  phasing  in of any  law,  rule or
regulation  after the date hereof;  (ii) any change after the date hereof in the
interpretation  of any existing  law,  rule or regulation by any central bank or
United States or foreign governmental  authority charged with the administration
thereof;  or (iii) compliance by Bank or such Control Person with any directive,
guideline  or  request  from  any  central  bank or  United  States  or  foreign
governmental  authority  (whether or not having the force of law) promulgated or
made after the date hereof, and Bank shall have reasonably  determined that such
introduction, phasing in, change or compliance shall have had or will thereafter
have the  effect of  reducing  (x) the rate of return on Bank's or such  Control
Person's  capital,  or (y) the asset value to Bank or such Control Person of the
Loans made or  maintained  by Bank,  in either  case to a level below that which
Bank or such Control  Person could have achieved or would  thereafter be able to
achieve but for such  introduction,  phasing  in,  change or  compliance  (after
taking into account Bank's or such Control Person's policies regarding capital),
in  either  case by an  amount  which  Agent in its  reasonable  judgment  deems
material,  then, on demand by Bank,  Borrower  shall pay to Bank or such Control
Person such  additional  amount or amounts as shall be  sufficient to compensate
Bank or such Control Person, as the case may be, for such reduction.

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

                  2.9 Fees. Borrower shall pay to Bank the following:

                           (a) Facility Fee. On the Closing Date, a Facility Fee
equal to $15,000.00, which shall be nonrefundable;

                           (b) Bank  Expenses.  On the  Closing  Date,  all Bank
Expenses incurred through the Closing Date, including reasonable attorneys' fees
and  expenses  and,  after  the  Closing  Date,  all  Bank  Expenses,  including
reasonable  attorneys' fees and expenses, as and when they become due. Provided,
however,  attorneys' fees incurred  through the Closing Date shall be limited to
$3,500.00 for the first draft plus 50% of the negotiation fees.

                  2.10  Term.  This  Agreement  shall  become  effective  on the
Closing  Date and,  subject to Section  12.8,  shall  continue in full force and
effect for a term ending on the Revolving Maturity Date.

         3. CONDITIONS OF LOANS.

                  3.1  Conditions  Precedent to Initial  Credit  Extension.  The
obligation  of Bank to make the  initial  Credit  Extension  is  subject  to the
condition  precedent  that  Bank  shall  have  received,  in form and  substance
satisfactory to Bank, including,  where applicable, all requisite signatures and
acknowledgments, the following:

                           (a) this Agreement;

                           (b) an officer's certificate of Borrower with respect
to incumbency  and  resolutions  authorizing  the execution and delivery of this
Agreement;

                           (c)  promissory  note in the form attached  hereto as
Exhibit F;

                           (d) financing statements (Form UCC-1);

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                           (e) agreement to provide insurance;

                           (f)  payment of the fees and Bank  Expenses  then due
specified in Section 2.9;

                           (g) an audit of the Collateral,  the results of which
shall be satisfactory to Bank;

                           (h) current  financial  statements in accordance with
Section 6.3; and

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

                  3.2  Conditions  Precedent  to  all  Credit  Extensions.   The
obligation of Bank to make each Credit  Extension,  including the initial Credit
Extension, is further subject to the following conditions:

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

                           (b) the fact that  immediately  before and after such
Credit  Extension no Event of Default or Unmatured  Event of Default  shall have
occurred or be continuing; and

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

         4. CREATION OF SECURITY INTEREST.

                  4.1 Grant of Security Interest. Borrower grants and pledges to
Bank a continuing  security  interest in all  presently  existing and  hereafter
acquired  or  arising  Collateral  to  secure  prompt  repayment  of any and all
Obligations  and to  secure  prompt  performance  by  Borrower  of  each  of its
covenants  and  duties  under  the Loan  Documents.  Except  as set forth in the
Schedule,  such security interest  constitutes a valid,  first priority security
interest in the  presently  existing  Collateral,  and will  constitute a valid,
first priority security interest in later-acquired  Collateral.  Notwithstanding
any  termination,  Bank's Lien on the  Collateral  shall remain in effect for so
long as any Obligations are outstanding.

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

                  4.3  Right to  Inspect.  Bank  (through  any of its  officers,
employees,  or agents) shall have the right, upon reasonable prior notice,  from
time to time during  Borrower's  usual  business  hours but no more than twice a
year  (unless an Event of Default has occurred  and is  continuing),  to inspect
Borrower's Books and to make copies thereof and to check, test, and appraise the
Collateral  in order to verify  Borrower's  financial  condition  or the amount,
condition of, or any other matter relating to, the Collateral.

         5. REPRESENTATIONS AND WARRANTIES.

         Borrower represents and warrants as follows:

                  5.1 Due  Organization  and  Qualification.  Borrower  and each
Subsidiary  is a  corporation  duly  existing  under  the  laws of its  state of
incorporation  and  qualified  and licensed to do business in any state in which

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the conduct of its business or its ownership of property  requires that it be so
qualified, except where the failure to do so would not reasonably be expected to
cause a Material Adverse Effect.

                  5.2 Due Authorization;  No Conflict. The execution,  delivery,
and performance of the Loan Documents are within  Borrower's  powers,  have been
duly  authorized,  and are not in conflict  with nor  constitute a breach of any
provision  contained in Borrower's Articles of Incorporation or Bylaws, nor will
they  constitute  an event of  default  under any  material  agreement  by which
Borrower is bound. Borrower is not in default under any agreement by which it is
bound,  except to the extent such default  would not  reasonably  be expected to
cause a Material Adverse Effect.

                  5.3  Enforceability.  Upon their  execution  and  delivery  in
accordance  with the terms hereof,  this  Agreement,  and the Loan  Documents to
which Borrower is a party will constitute  legal,  valid and binding  agreements
and  obligations of Borrower  enforceable  against  Borrower in accordance  with
their respective terms,  except as enforceability  may be limited by bankruptcy,
insolvency,  and similar laws and equitable principles affecting the enforcement
of creditors' rights generally.

                  5.4  Collateral.  Borrower  has good title to the  Collateral,
free and clear of Liens,  except for Permitted Liens. The Eligible  Accounts are
bona fide  existing  obligations.  The  property  giving  rise to such  Eligible
Accounts  has been  delivered to the account  debtor or its 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 whose  accounts  are included in any  Borrowing  Base  Certificate  as an
Eligible  Account.  All  Inventory  is in all  material  respects  of  good  and
merchantable quality,  free from all material defects,  except for Inventory for
which adequate reserves have been made.

                  5.5  Intellectual  Property  Collateral.  Borrower is the sole
owner of the Intellectual  Property  Collateral,  except for licenses granted by
Borrower to its  customers  in the ordinary  course of business.  To the best of
Borrower's  knowledge,  each of the Copyrights,  Trademarks and 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
to Borrower that any part of the Intellectual  Property  Collateral violates the
rights of any third party  except to the extent such claim would not  reasonably
be  expected  to cause a  Material  Adverse  Effect.  Except as set forth in the
Schedule,  Borrower's rights as a licensee of intellectual  property do not give
rise to more than 5% of its gross revenue in any given month,  including without
limitation revenue derived from the sale, licensing, rendering or disposition of
any product or service.

                  5.6  Name;  Location  of Chief  Executive  Office.  Except  as
disclosed in the Schedule,  Borrower has not done business  under any name other
than that specified on the signature page hereof.  The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.

                  5.7 Litigation. Except as set forth in the Schedule, there are
no actions or  proceedings  pending or, to the  knowledge of Borrower  after due
inquiry,  threatened, by or against Borrower or any of Borrower's Assets, or any
Subsidiary   or  any  of  such   Subsidiary's   Assets,   before  any  court  or
administrative  agency in which a likely adverse  decision  would  reasonably be
expected to have a Material  Adverse  Effect,  or a material  adverse  effect on
Borrower's interest or Bank's security interest in the Collateral.

                  5.8 No Material  Adverse Change in Financial  Statements.  All
consolidated  financial  statements  related to Borrower and any Subsidiary that
are  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.

                  5.9  Solvency.  Borrower and each  Subsidiary  is Solvent.  No
transfer  of  property  is  being  made by  Borrower  or any  Subsidiary  and no
obligation is being incurred by Borrower any  Subsidiary in connection  with the
transactions  contemplated  by this  Agreement  or the Loan  Documents  with the
intent to hinder,  delay,  or defraud  either  present  or future  creditors  of
Borrower any Subsidiary.

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<PAGE>

                  5.10 Compliance with Laws and  Regulations.  Borrower and each
Subsidiary  have 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  T and U of the  Board  of
Governors of the Federal Reserve System).  Borrower has complied in all material
respects  with all the  provisions  of the  Federal  Fair Labor  Standards  Act.
Borrower  is  in  compliance  with  all  environmental  laws,   regulations  and
ordinances except where the failure to comply is not reasonably likely to have a
Material  Adverse  Effect.  Borrower  has  not  violated  any  statutes,   laws,
ordinances or rules  applicable to it,  violation of which could have a Material
Adverse  Effect.  Borrower and each  Subsidiary have filed or caused to be filed
all tax  returns  required  to be filed,  and have paid,  or have made  adequate
provision  for the payment of, all taxes  reflected  therein  except those being
contested in good faith with adequate  reserves  under GAAP or where the failure
to file such returns or pay such taxes would not  reasonably be expected to have
a Material Adverse Effect.

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

                  5.12  Government  Consents.  Borrower and each Subsidiary have
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, except where the failure to do so would not reasonably be expected to
cause a Material Adverse Effect.

                  5.13 Inbound  Licenses.  Except as disclosed on the  Schedule,
Borrower is not a party to, nor is bound by, any license or other agreement that
prohibits or otherwise  restricts  Borrower from granting a security interest in
Borrower's interest in such license or agreement or any other property.

                  5.14 Full  Disclosure.  No  representation,  warranty or other
statement made by Borrower in any certificate or written statement  furnished to
Bank taken together with all such certificates and written statements  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,  it being recognized by Bank that the
projections  and  forecasts  provided  by  Borrower in good faith and based upon
reasonable  assumptions  are not to be viewed as facts and that  actual  results
during the period or periods  covered by any such  projections and forecasts may
differ from the projected or forecasted results.

         6. AFFIRMATIVE COVENANTS.

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

                  6.1  Punctual  Payments.   Punctually  pay  the  interest  and
principal  on the  Loans,  the  Fees and all  Expenses  and any  other  fees and
liabilities  due under this  Agreement  and the Loan  Documents at the times and
place and in the manner specified in this Agreement or the Loan Documents.

                  6.2 Good Standing and  Government  Compliance.  Borrower shall
maintain  its  and  each  of  its  Subsidiaries'   corporate  existence  in  its
jurisdiction of incorporation and maintain qualification in each jurisdiction in
which the failure to so qualify could have a Material  Adverse Effect.  Borrower
shall  meet,  and shall  cause each  Subsidiary  to meet,  the  minimum  funding
requirements  of ERISA with respect to any  employee  benefit  plans  subject to
ERISA,  except where the failure to meet such requirements  would not reasonably
be expected to have a Material Adverse Effect.  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, and shall maintain, and
shall  cause  each of its  Subsidiaries  to  maintain,  in force  all  licenses,
approvals  and  agreements,  the loss of which or failure  to comply  with which
would  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.

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<PAGE>

                  6.3  Financial  Statements,  Reports,  Certificates.  Borrower
shall deliver to Bank: (a) as soon as available, but in any event within 50 days
after the end of each fiscal quarter,  a company prepared  consolidated  balance
sheet and income  statement  prepared  in  accordance  with  GAAP,  consistently
applied,  covering Borrower's  consolidated  operations during such period, in a
form reasonably  acceptable to Bank and certified by a Responsible  Officer; (b)
as  soon  as  available,  but in any  event  within  95  days  after  the end of
Borrower's fiscal year, unqualified audited consolidated financial statements of
Borrower prepared in accordance with GAAP,  consistently applied,  together with
an opinion which is unqualified or otherwise  consented to in writing by Bank on
such financial  statements of an independent  certified  public  accounting firm
reasonably acceptable to Bank; (c) 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 Forms 10-K and 10-Q filed with
the Securities and Exchange Commission within 5 days of issuance or with respect
to 10-Q reports 50 days from the end of the applicable  quarter and 10-K reports
95 days from the end of the  applicable  year end; (d) 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 $500,000 or more;  and (e) such budgets,  sales  projections,
operating plans or other financial information generally prepared by Borrower in
the  ordinary  course of business as Bank may  reasonably  request  from time to
time;  and (f) within 50 days of the last day of each fiscal  quarter,  a report
signed by Borrower,  in form reasonably acceptable to Bank, listing any Patents,
Copyrights or Trademarks  issued to Borrower  that are deemed  unenforceable  or
invalid.

                           (a) If total Advances  exceed  $2,500,000:  Within 15
days  after  the  last  day of each  month,  Borrower  shall  deliver  to Bank a
Borrowing Base Certificate signed by a Responsible  Officer in substantially the
form of Exhibit D hereto, together with aged listings of accounts receivable and
accounts payable and a Deferred Revenue report.

                           (b)  Bank  shall  have a right  from  time to time to
conduct annual audits of Borrower in a manner satisfactory to Bank at Borrower's
expense,  provided that such audits may be conducted  every 6 months if Advances
exceed $2,500,000. Provided, however, Borrower shall only be responsible for the
cost of one  audit per year  unless  an Event of  Default  has  occurred  and is
continuing.  If an Event of Default  has  occurred  and is  continuing  Bank may
conduct  such  additional  audits  as Bank in its sole and  absolute  discretion
requests.

                           (c) Borrower  shall deliver its Annual Report to Bank
within 120 days of Borrower's fiscal year end.

                           (d)  Borrower   shall   deliver  a  Bank   Compliance
Certificate  to  Bank  within  50 days of the  end of  each  fiscal  quarter  in
substantially the form of Exhibit E hereto.

                  6.4 Inventory;  Returns.  Borrower shall keep all Inventory in
good and  merchantable  condition,  free from all  material  defects  except for
Inventory for which adequate reserves have been made. 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 on
the  Closing  Date.  Borrower  shall  promptly  notify  Bank of all  returns and
recoveries  and of all disputes and claims  involving  more than $100,000 in the
aggregate over any 12 month period. Provided,  however, inventory returns caused
by exchanging new product for older product shall be excluded.

                  6.5 Taxes.  Borrower shall make, and 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, including, but
not limited to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state
disability,  and will execute and deliver to Bank, on demand, proof satisfactory
to Bank  indicating  that  Borrower or a  Subsidiary  has made such  payments or
deposits and any  appropriate  certificates  attesting to the payment or deposit
thereof; 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.

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                  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  liability  and  other  insurance  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 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,  and all liability  insurance  policies  shall show Bank as an additional
insured and specify  that the insurer  must give at least 20 days notice to Bank
before canceling its policy for any reason. Upon Bank's request,  Borrower shall
deliver to Bank  certified  copies of the policies of insurance  and evidence of
all premium  payments.  If no Event of Default has occurred  and is  continuing,
proceeds  payable  under any casualty  policy will,  at  Borrower's  option,  be
payable to Borrower to replace the property subject to the claim,  provided that
any such replacement  property shall be deemed Collateral in which Bank has been
granted a first priority security interest.  If an Event of Default has occurred
and is continuing,  all proceeds  payable under any such policy shall, at Bank's
option, be payable to Bank to be applied on account of the Obligations.

                  6.7 Primary  Depository.  Borrower  shall maintain its primary
depository and operating accounts with Bank or Bank's Affiliates.

                  6.8 Financial  Covenants.  Borrower shall maintain,  as of the
last day of each fiscal quarter unless stated otherwise:

                           (a) Modified  Quick Ratio. A ratio of Quick Assets to
Current Liabilities less Deferred Revenue of at least 2.50 to 1.00.

                           (b) Tangible  Net Worth.  A Tangible Net Worth of not
less than $45,000,000.

                  6.9 Intellectual Property Rights.

                           (a)   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.

                           (b)  Borrower  shall  make  commercially   reasonable
efforts to (i) protect,  defend and maintain the validity and  enforceability of
the Trademarks, Patents and Copyrights, (ii) use commercially reasonable 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 material  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.

                           (c) Bank may audit Borrower's  Intellectual  Property
Collateral to confirm  compliance with this Section 6.9, provided such audit may
not occur more often than once per year, unless an Event of Default has occurred
and is continuing.  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 6.9 to take but which Borrower  fails to take,  after 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 6.9.

                  6.10 Funding  Losses.  Borrower shall  reimburse Bank and hold
Bank  harmless  from any funding loss or expense which Bank may sustain or incur
as a consequence  of Borrower's  election to use LIBOR Loans,  including but not
limited to (a) the failure of Borrower to make on a timely  basis in  accordance
with the terms  hereof  any  payment of  principal  of any LIBOR  Loan;  (b) the
failure of Borrower to borrow,  continue  or convert a Loan after  Borrower  has
given  (or is  deemed  to have  given)  a Notice  of  Borrowing  or a Notice  of

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Conversion/Continuation;  or (c) the automatic conversion of any LIBOR Loan to a
Prime  Rate  Loan on a day  that is not the last  day of the  relevant  Interest
Period;  including  any such loss or expense  arising  from the  liquidation  or
reemployment  of funds  obtained by it to maintain  its LIBOR Loans or from fees
payable to  terminate  the  deposits  from which  such  funds were  obtained  in
accordance with the terms thereof . For purposes of calculating  amounts payable
by Borrower  to Bank under this  Section or  otherwise  related to a LIBOR Loan,
each LIBOR Loan made by Bank (and related  reserve,  special  deposit or similar
requirement) shall be conclusively  deemed to have been funded at the LIBOR Rate
for such LIBOR Loan by a matching  deposit or other  borrowing in the  interbank
eurodollar  market for a comparable amount and a comparable  period,  whether or
not such LIBOR Loan is in fact so funded.

                  6.11 Notice to Bank.  Borrower  shall,  promptly upon Borrower
acquiring knowledge thereof, give written notice to Bank of:

                           (a)  all   litigation   affecting   Borrower  or  any
Subsidiary where the amount in controversy is in excess of Five Hundred Thousand
Dollars ($500,000);

                           (b) any dispute which may exist  between  Borrower or
any Subsidiary, on the one hand, and any Governmental Authority, on the other;

                           (c) any labor controversy resulting in or threatening
to result in a strike against Borrower or any Subsidiary;

                           (d) any  proposal by any  Governmental  Authority  to
acquire the Assets or business of Borrower or any Subsidiary, or to compete with
Borrower or any Subsidiary;

                           (e) any  reportable  event under Section  4043(c)(5),
(6) or (13) of ERISA with  respect to any Plan,  any  decision to  terminate  or
withdraw  from a Plan,  any finding  made with  respect to a Plan under  Section
4041(c) or (e) of ERISA,  the  commencement  of any proceeding with respect to a
Plan under  Section  4042 of ERISA,  or any material  increase in the  actuarial
present  value of unfunded  vested  benefits  under all Plans over the preceding
year;

                           (f) any  Event  of  Default  or  Unmatured  Event  of
Default; and

                           (g) any  other  matter  which has  resulted  or could
reasonably be expected to result in a Material Adverse Effect.

                  6.12 Additional Collateral. With respect to any Assets (or any
interest  therein) acquired after the Closing Date by Borrower or any Subsidiary
that are of a type covered by the Lien created by any of the Loan  Documents but
which are not so subject,  promptly  (and in any event  within  thirty (30) days
after  the  acquisition  thereof):  (i)  execute  and  deliver,  or  cause  such
Subsidiary to execute and deliver,  to Bank such amendments to the relevant Loan
Documents or such other  documents as Bank shall deem  necessary or advisable to
grant to Bank a Lien on such Assets (or such  interest  therein),  (ii) take all
actions, or cause such Subsidiary to take all actions, necessary or advisable to
cause such Lien to be duly  perfected in  accordance  with all  applicable  law,
including,  without  limitation,  the  filing of  financing  statements  in such
jurisdictions as may be requested by Bank,  (iii) if requested by Bank,  deliver
to Bank legal  opinions  relating to the matters  described  in the  immediately
preceding  clauses (i) and (ii),  which opinions shall be in form and substance,
and from  counsel,  reasonably  satisfactory  to Bank,  and (iv) if requested by
Bank, deliver to Bank evidence of insurance as required by Section 6.6.

                  6.13  Inbound  Licensors.  Prior  to  becoming  bound  by  any
material  license or agreement  where Borrower is the licensee,  Borrower shall:
(a) provide  written  notice to Bank of the  material  terms of such  license or
agreement  with a description  of its likely  impact on  Borrower's  business or
financial condition;  and (b) in good faith use commercially  reasonable efforts
to obtain the  consent of, or waiver by, any person  whose  consent or waiver is
necessary  for  Borrower's  interest in such  licenses or contract  rights to be
deemed  Collateral  and for Bank to have a  security  interest  in it that might
otherwise be restricted by the terms of the  applicable  license or agreement or
by  operation  of law,  whether  now  existing  or entered  into in the  future,
provided,  however,  that the failure to obtain any such consent or waiver shall
not constitute a default under this Agreement.

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

         7. NEGATIVE COVENANTS.

         Borrower  covenants  and agrees that,  so long as any credit  hereunder
shall be available and until payment in full of the  outstanding  Obligations or
for so long as Bank may  have any  commitment  to make  any  Credit  Extensions,
Borrower will not do any of the following  without Bank's prior written consent,
which shall not be unreasonably withheld:

                  7.1 Dispositions.  Convey, sell, lease,  transfer or otherwise
dispose of (collectively,  to "Transfer"),  or permit any of its Subsidiaries to
Transfer,  all or any part of its  business or  property,  other than  Permitted
Transfers.

                  7.2 Change in Business; Change in Control or Executive Office.
Engage in any  business,  or  permit  any of its  Subsidiaries  to engage in any
business,  other than or  reasonably  related or  incidental  to the  businesses
currently engaged in by Borrower. Borrower will not have a Change in Control and
will not, without 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  (other than mergers or consolidations of a Subsidiary into another
Subsidiary or into Borrower),  or acquire,  or permit any of its Subsidiaries to
acquire,  all or  substantially  all of the capital stock or property of another
Person except where (i) acquisitions where the cash consideration component does
not exceed $10,000,000 per acquisition and total aggregate consideration for all
such  acquisitions  is less  than  $75,000,000  and  the  total  aggregate  cash
consideration for all such acquisitions does not exceed  $20,000,000 and (ii) no
Event of Default has occurred,  is continuing or would exist after giving effect
to the transaction or transactions.

                  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.  Indebtedness  in the form of real property  leases and
equipment leases are not prohibited by this Section 7.4.

                  7.5 Encumbrances. Create, incur, assume or allow 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,  or covenant to any other
Person that  Borrower  in the future  will  refrain  from  creating,  incurring,
assuming or allowing any Lien with respect to any of Borrower's property.

                  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,  except that  Borrower  may (i)  repurchase  the stock of
former employees pursuant to stock repurchase agreements as long as (a) an Event
of Default  does not exist  prior to such  repurchase  or would not exist  after
giving  effect  to such  repurchase  and (b) does  not  exceed  $500,000  in the
aggregate,  (ii)  repurchase  the stock of former  employees  pursuant  to stock
repurchase  agreements by the  cancellation of indebtedness  owed by such former
employees  to Borrower  regardless  of whether an Event of Default  exists,  and
(iii) pay non-cash capital stock dividends.

                  7.7  Investments.  Directly or  indirectly  acquire or own, or
make  any  loan  or  Investment  in or to  any  Person,  or  permit  any  of its
Subsidiaries  so to do, other than Permitted  Investments,  except  Borrower may
make loans to employees up to $500,000 in the aggregate.

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

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

                  7.10  Inventory  and  Equipment.  Store the  Inventory  or the
Equipment 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  and Equipment
only at the location  set forth in Section 10 and such other  locations of which
Borrower  gives Bank prior  written  notice and as to which  Borrower  signs and
files a financing statement where needed to perfect Bank's security interest.

                  7.11  Compliance.  Become or be 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 Credit  Extension 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 would 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, or permit any of its Subsidiaries to do any of the foregoing.

         8. EVENTS OF DEFAULT.

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

                  8.1  Payment  Default.  If  Borrower  fails  to pay any of the
Obligations and such failure continues for 3 calendar days or more after the due
date,  provided that within such 3-day cure period, the failure to pay shall not
be deemed an Event of Default, but no Credit Extensions will be made;

                  8.2  Covenant  Default.  If  Borrower  fails  to  perform  any
obligation under Article 6 or violates any of the covenants contained in Article
7 of this  Agreement,  or fails or  neglects  to perform  or  observe  any other
material term, provision,  condition,  covenant contained in this Agreement,  in
any of the Loan Documents,  or in any other present or future agreement  between
Borrower  and Bank and as to any  default  under  such  other  term,  provision,
condition or covenant that can be cured,  has failed to cure such default within
ten days after  Borrower  receives  notice  thereof or any  officer of  Borrower
becomes aware  thereof;  provided,  however,  that if the default  cannot by its
nature be cured within the ten day period or cannot after  diligent  attempts by
Borrower be cured  within such ten day period,  and such default is likely to be
cured  within  a  reasonable  time,  then  Borrower  shall  have  an  additional
reasonable  period  (which  shall not in any case  exceed 30 days) to attempt to
cure such default,  and within such  reasonable  time period the failure to have
cured  such  default  shall  not be  deemed  an Event of  Default  but no Credit
Extensions will be made;

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

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

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Default where such action or event is stayed or an adequate bond has been posted
pending a good faith  contest by Borrower  (provided  that no Credit  Extensions
will be required to be made during such cure period);

                  8.5  Insolvency.  If  Borrower  becomes  insolvent,  or  if an
Insolvency  Proceeding is commenced by Borrower,  or if an Insolvency Proceeding
is  commenced  against  Borrower and is not  dismissed or stayed  within 45 days
(provided that no Credit  Extensions will be made prior to the dismissal of such
Insolvency Proceeding);

                  8.6 Other  Agreements.  If there is a default in any agreement
to which Borrower is a party with a third party or parties  resulting in a right
by such third party or parties,  whether or not  exercised,  to  accelerate  the
maturity  of any  Indebtedness  in an amount in excess of $500,000 or that could
have a Material Adverse Effect;

                  8.7  Subordinated  Debt.  If  Borrower  makes any  payment  on
account of Subordinated  Debt, except to the extent the 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 $500,000 shall
be rendered  against  Borrower and shall remain  unsatisfied  and unstayed for a
period of 10 days (provided that no Credit  Extensions will be made prior to the
satisfaction or stay of the judgment); or

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

                  8.10  Guaranty.  If any  guaranty  of all or a portion  of the
Obligations  ceases  for any  reason  to be in full  force  and  effect,  or any
guarantor fails to perform any obligation under any guaranty of all or a portion
of the Obligations,  or any guarantor revokes or purports to revoke any guaranty
of the Obligations,  or any material  misrepresentation or material misstatement
exists now or  hereafter  in any  warranty  or  representation  set forth in any
guaranty of all or a portion of the Obligations or in any certificate  delivered
to Bank in connection with such guaranty.

         9. BANK'S RIGHTS AND REMEDIES.

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

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

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

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

                           (d)  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

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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;

                           (e) 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;

                           (f) 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;

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

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

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

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

                  9.3 Accounts Collection.  At any time after the occurrence and
during the continuation of an Event of Default, Bank may notify any Person owing
funds to  Borrower  of Bank's  security  interest  in such  funds and verify the
amount of such Account. Borrower shall collect all amounts owing to Borrower for
Bank, receive in trust all payments as Bank's trustee,  and immediately  deliver
such  payments  to Bank in their  original  form as  received  from the  account
debtor, with proper endorsements for deposit.

                  9.4 Bank  Expenses.  If  Borrower  fails to pay any amounts or
furnish any  required  proof of payment  due to third  persons or  entities,  as
required under the terms of this  Agreement,  then Bank may do any or all

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of the following after  reasonable  notice to Borrower:  (a) make payment of the
same or any part thereof;  (b) set up such reserves under the Revolving Facility
as Bank  deems  necessary  to  protect  Bank from the  exposure  created by such
failure;  or (c) obtain and maintain insurance policies of the type discussed in
Section 6.6 of this Agreement, and take any action with respect to such policies
as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute
Bank Expenses,  shall be immediately due and payable, and shall bear interest at
the then  applicable  rate  hereinabove  provided,  and shall be  secured by the
Collateral.  Any payments made by Bank shall not constitute an agreement by Bank
to make  similar  payments  in the  future  or a waiver  by Bank of any Event of
Default under this Agreement.

                  9.5 Bank's Liability for Collateral.  So long as Bank complies
with Section 9207 of the Code,  Bank shall not in any way or manner be liable or
responsible  for: (a) the safekeeping of the Collateral;  (b) any loss or damage
thereto  occurring or arising in any manner or fashion  from any cause;  (c) any
diminution  in the value  thereof;  or (d) any act or  default  of any  carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower.

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

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

         10. NOTICES.

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

                  If to Borrower:         PUMATECH, INC.
                                          2550 North First Street, Suite 500
                                          San Jose, CA 95131
                                          Attn:  Kelly Hicks
                                          FAX:  (408) 321-3886


                  If to Bank:             Imperial Bank
                                          5 Palo Alto Square, Suite 800
                                          3000 El Camino Real
                                          Palo Alto, CA 94306
                                          Attn:  Kenneth W. LeDeit
                                          FAX:  (650) 213-1710

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                  with a copy to:         Imperial Bank
                                          5 Palo Alto Square, Suite 800
                                          3000 El Camino Real
                                          Palo Alto, CA 94306
                                          Attn:  Laura Blakely
                                          FAX:  (650) 846-6830

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

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

This  Agreement  shall be governed by, and  construed in  accordance  with,  the
internal  laws of the  State of  California,  without  regard to  principles  of
conflicts of law. Subject to Article 13 each of Borrower and Bank hereby submits
to the exclusive  jurisdiction  of the state and Federal  courts  located in the
County of Santa Clara, State of California.  BORROWER AND BANK EACH HEREBY WAIVE
THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED
UPON OR  ARISING  OUT OF ANY OF THE LOAN  DOCUMENTS  OR ANY OF THE  TRANSACTIONS
CONTEMPLATED  THEREIN,  INCLUDING CONTRACT CLAIMS,  TORT CLAIMS,  BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH PARTY RECOGNIZES AND
AGREES THAT THE FOREGOING  WAIVER  CONSTITUTES A MATERIAL  INDUCEMENT  FOR IT TO
ENTER  INTO THIS  AGREEMENT.  EACH PARTY  REPRESENTS  AND  WARRANTS  THAT IT HAS
REVIEWED  THIS  WAIVER  WITH  ITS  LEGAL  COUNSEL  AND  THAT  IT  KNOWINGLY  AND
VOLUNTARILY  WAIVES  ITS JURY TRIAL  RIGHTS  FOLLOWING  CONSULTATION  WITH LEGAL
COUNSEL.

         12. GENERAL PROVISIONS.

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

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

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

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

                  12.5 Amendments in Writing,  Integration. All amendments to or
terminations  of  this  Agreement  must be in  writing.  All  prior  agreements,
understandings,   representations,  warranties,  and  negotiations  between  the
parties hereto with respect to the subject matter of this Agreement, if any, are
merged into this Agreement and the Loan Documents.

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                  12.6 Exhibits and Schedules. All of the exhibits and schedules
attached hereto shall be deemed incorporated herein by reference

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

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

                  12.9  Construction.  Unless  the  context  of  this  Agreement
clearly requires otherwise, references to the plural include the singular and to
the  singular  include the plural,  references  to any gender  include any other
gender, the part includes the whole, the term including is not limiting, and the
term or has, except where otherwise indicated, the inclusive meaning represented
by the phrase and/or. The words hereof, herein, hereby,  hereunder,  and similar
terms  in this  Agreement  refer  to this  Agreement  as a whole  and not to any
particular provision of this Agreement.  Article, section,  subsection,  clause,
exhibit  and  schedule  references  are  to  this  Agreement,  unless  otherwise
specified.  Any reference in this Agreement or any of the Loan Documents to this
Agreement  or  any  of  the  Loan  Documents  includes  any  and  all  permitted
alterations,  amendments,  changes,  extensions,  modifications,   renewals,  or
supplements thereto or thereof, as applicable.

                  12.10  No   Presumption   Against  Any  Party.   Neither  this
Agreement,  any of  the  Loan  Documents,  any  other  document,  agreement,  or
instrument entered into in connection herewith, nor any uncertainty or ambiguity
herein or therein shall be construed or resolved using any  presumption  against
any party hereto,  whether under any rule of construction  or otherwise.  On the
contrary,  this  Agreement,   the  Loan  Documents,  and  the  other  documents,
instruments,  and  agreements  entered  into in  connection  herewith  have been
reviewed  by each of the parties and their  counsel and shall be  construed  and
interpreted  according  to the  ordinary  meanings  of the  words  used so as to
accomplish fairly the purposes and intentions of all parties hereto.

                  12.11 Independence of Provisions. All agreements and covenants
hereunder, under the Loan Documents, and the other documents,  instruments,  and
agreements entered into in connection herewith shall be given independent effect
such that if a particular  action or condition is prohibited by the terms of any
such  agreement  or covenant,  the fact that such action or  condition  would be
permitted  within the limitations of another  agreement or covenant shall not be
construed as allowing such action to be taken or condition to exist.

                  12.12   Confidentiality.    In   handling   any   confidential
information  Bank and all employees  and agents of Bank shall  exercise the same
degree  of  care  that  Bank  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.

                  12.13  Expenses.  Borrower shall pay within 30 days of closing
all of Bank's reasonable  out-of-pocket costs in connection with this Agreement,
including in conducting its due diligence, preparing the documentation,  closing
the transaction and perfecting its security  interests  except that with respect
to Bank's outside  counsel fees,  Borrower shall pay the first $3,500 and 50% of
Bank's outside counsel costs above $3,500.

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<PAGE>

         13. JUDICIAL REFERENCE.

                  (a) Other than (i) nonjudicial  foreclosure and all matters in
connection  therewith regarding security interests in real or personal property;
or (ii) the  appointment  of a receiver,  or the  exercise of other  provisional
remedies  (any and all of which may be initiated  pursuant to  applicable  law),
each  controversy,  dispute  or claim  between  the  parties  arising  out of or
relating to this document, which controversy, dispute or claim is not settled in
writing  within thirty (30) days after the "Claim Date"  (defined as the date on
which a party  subject  to this  Agreement  gives  written  notice  to all other
parties  that a  controversy,  dispute  or claim  exists),  will be settled by a
reference  proceeding in California in accordance with the provisions of Section
638 et seq.  of the  California  Code of Civil  Procedure,  or  their  successor
section ("CCP"),  which shall constitute the exclusive remedy for the settlement
of any  controversy,  dispute  or claim  concerning  this  Agreement,  including
whether  such  controversy,  dispute  or  claim  is  subject  to  the  reference
proceeding  and except as set forth  above,  the parties  waive their  rights to
initiate any legal  proceedings  against each other in any court or jurisdiction
other than Santa Clara  County  (the  "Court").  The referee  shall be a retired
Judge of the Court  selected by mutual  agreement  of the  parties,  and if they
cannot so agree within  forty-five  (45) days after the Claim Date,  the referee
shall  be  promptly  selected  by the  Presiding  Judge  of the  Court  (or  his
representative).  The referee  shall be appointed  to sit as a temporary  judge,
with all of the powers for a temporary  judge,  as  authorized  by law, and upon
selection  should take and  subscribe  to the oath of office as provided  for in
Rule 244 of the  California  Rules of the  Court  (or any  subsequently  enacted
Rule). Each party shall have one peremptory challenge pursuant to CCP ss. 170.6.
The referee  shall (a) be requested  to set the matter for hearing  within sixty
(60) days after the date of  selection  of the  referee  and (b) try any and all
issues of law or fact and report a statement of decision upon them, if possible,
within ninety (90) days of the Claim Date. Any decision  rendered by the referee
will be final,  binding and conclusive and judgment shall be entered pursuant to
CCP ss. 644 in any court in the State of  California  having  jurisdiction.  Any
party may apply for a reference  proceeding  at any time after  thirty (30) days
following notice to any other party of the nature of the controversy, dispute or
claim, by filing a petition for a hearing and/or trial. All discovery  permitted
by this Agreement  shall be completed no later than fifteen (15) days before the
first  hearing  date  established  by the  referee.  The referee may extend such
period in the event of a party's  refusal  to  provide  requested  discovery  or
unavailability  of a  witness  due to  absence  or  illness.  No party  shall be
entitled to  "priority"  in conducting  discovery.  Depositions  may be taken by
either party upon seven (7) days written  notice,  and request for production or
inspection  of  documents  which  cannot be  resolved  by the  parties  shall be
submitted to the referee as provided herein,  the Superior Court is empowered to
issue temporary and/or provisions remedies, as appropriate.

                  (b)  Except  as  expressly  set forth in this  Agreement,  the
referee  shall  determine  the  manner  in which  the  reference  proceeding  is
conducted  including  the  time  and  place  of  all  hearings,   the  order  of
presentation of evidence, and all other questions that arise with respect to the
course of the  reference  proceeding.  All  proceedings  and hearings  conducted
before  the  referee,  except  for  trial,  shall be  conducted  without a court
reporter  except that when any party so requests,  a court reporter will be used
at any hearing  conducted  before the  referee.  The party making such a request
shall have the  obligation  to arrange for and pay for the court  reporter.  The
costs of the court reporter at the trial shall be borne equally by the parties.

                  (c) The referee  shall be required to determine  all issues in
accordance  with  existing  case  law and the  statutory  laws of the  State  of
California.  The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding.  The referee shall
be  empowered  to  enter  equitable  as well as legal  relief,  to  provide  all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the  reference  proceeding  which  shall  dispose of all of the claims of the
parties  that are the subject of the  reference.  The parties  hereto  expressly
reserve the right to contest or appeal from the final judgment or any appealable
order  or  appealable  judgment  entered  by the  referee.  The  parties  hereto
expressly reserve the right to findings of fact,  conclusions of laws, a written
statement  of  decision,  and the right to move for a new  trial or a  different
judgment,  which new trial,  if granted,  is also to be a  reference  proceeding
under this provision.

                  (d) In the event that the enabling  legislation which provides
for appointment of a referee is repealed (and no successor  statute is enacted),
any dispute  between the  parties  that would  otherwise  be  determined  by the
reference  procedure  herein  described  will  be  resolved  and  determined  by
arbitration.  The arbitration will be conducted by a retired judge of the Court,
in accordance with the California  Arbitration  Act, ss. 1280 through

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<PAGE>

ss. 1294.2 of the CCP as amended from time to time. The limitations with respect
to  discovery  as set  forth  hereinabove  shall  apply to any such  arbitration
proceeding.

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

                                            PUMATECH, INC.


                                            By:  /s/ KELLY J. HICKS
                                                 ------------------

                                            Title: Chief Financial Officer


                                            IMPERIAL BANK


                                            By: /s/ KENNETH W. LEDEIT
                                                ---------------------

                                            Title: FVP / Manager Venture Banking
                                                   Emerging Group Division


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Imperial Bank - Loan                  Page 21
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<PAGE>

                                   EXHIBIT A

DEFINITIONS

"Account  Debtor"  means any  "account  debtor,"  as such term is defined in the
applicable section of the UCC.

"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  or  cash  advances  under  the
Revolving Facility.

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

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

"Base  LIBOR"  applicable  to any  Interest  Period  for a LIBOR  Loan means the
offered  rate per annum  (rounded  upward to the  nearest  one-hundredth  of one
percent (.01%)), if any, to first-class banks in the LIBOR market quoted by Bank
at 9:00 a.m. California time, two (2) LIBOR Business Days prior to the first day
of such  Interest  Period for Dollar  deposits  of an amount  comparable  to the
principal  amount of the LIBOR Loan for which the LIBOR Rate is being determined
with maturities comparable to the Interest Period for which such LIBOR Rate will
apply.

"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"  means  an  amount  equal  to 80%  of  Eligible  Accounts,  as
determined by Bank with reference to the most recent  Borrowing Base Certificate
delivered by Borrower.

"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.

"Change in Control"  shall mean a  transaction  in which any "person" or "group"
(within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934)  becomes  the  "beneficial  owner" (as  defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of a sufficient number
of shares of all  classes  of stock  then  outstanding  of  Borrower  ordinarily
entitled  to vote in the  election of  directors,  empowering  such  "person" or
"group" to elect a majority of the Board of Directors  of Borrower,  who did not
have such power before such transaction.

"Closing Date" means the date of this Agreement.

"Code" means the California Uniform Commercial Code.

"Collateral"  means the property  described on Exhibit B attached hereto and all
Negotiable  Collateral and  Intellectual  Property  Collateral to the extent not
described  on  Exhibit  B,  except  to  the  extent  any  such  property  (i) is
nonassignable  by its terms  without  the  consent  of the  licensor  thereof or
another  party  (but  only  to  the  extent  such  prohibition  on  transfer  is
enforceable under applicable law, including, without limitation, Section 9318(4)
of the

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and Security Agreement
<PAGE>

Code),  or (ii) the  granting  of a security  interest  therein is  contrary  to
applicable  law,  provided  that upon the cessation of any such  restriction  or
prohibition, such property shall automatically become part of the Collateral.

"Committed  Revolving  Line"  means  a  Credit  Extension  of up to  $10,000,000
(inclusive of any amounts  outstanding under the Letter of Credit Sublimit,  the
Merchant Card Service Sublimit,  the Foreign Exchange  Sublimit,  and the Credit
Card Services Sublimit).

"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.

"Credit Card Services  Sublimit" means a sublimit under the Committed  Revolving
Line not to exceed $100,000 for corporate credit cards.

"Credit  Extension"  means each Advance or any other extension of credit by Bank
for the benefit of Borrower  hereunder  including  but not limited to the credit
described in Section 2.1.

"Current Assets" means, as of any applicable  date, all amounts that should,  in
accordance with GAAP, be included as current assets on the consolidated  balance
sheet of Borrower and its Subsidiaries as at such date.

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

"Deferred  Revenue" means all amounts  received in advance of performance  under
maintenance  or other types of contracts  and not yet  recognized  as revenue in
accordance with GAAP.

"Dollars" means lawful currency of the United States of America.

"Eligible  Accounts"  means those  Accounts which are due and payable by debtors
that arise in the ordinary course of Borrower's business that comply with all of
Borrower's  representations  and  warranties  to Bank set forth in Section  5.4;
provided,  that Bank may change the standards of eligibility by giving  Borrower
30 days prior  written  notice.  Unless  otherwise  agreed to by Bank,  Eligible
Accounts shall not include the following:

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

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Imperial Bank - Loan                  Page 2
and Security Agreement
<PAGE>

(b)      Accounts due from an account  debtor if more than  twenty-five  percent
         (25%) of the aggregate  amount of Accounts of such account  debtor have
         at that time  remained  unpaid for more than  ninety (90) days from the
         applicable invoice date;

(c)      Accounts with respect to an account  debtor,  25% of whose Accounts the
         account debtor has failed to pay within 90 days of invoice date;

(d)      Accounts  with  respect  to which the  account  debtor  is an  officer,
         employee, or agent of Borrower;

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

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

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

(h)      Accounts with respect to which the account  debtor is the United States
         or any department,  agency,  or  instrumentality  of the United States,
         except for Accounts of the United  States if the payee has assigned its
         payment rights to Bank and the assignment has been  acknowledged  under
         the Assignment of Claims Act of 1940 (31 U.S.C. 3727);

(i)      Accounts with respect to which Borrower is liable to the account debtor
         for goods sold or services  rendered by the account debtor to Borrower,
         but only to the  extent  of any  amounts  owing to the  account  debtor
         against  amounts owed to Borrower  (excluding  all amounts  received in
         advance of performance under maintenance contracts);

(j)      Accounts with respect to an account debtor,  including Subsidiaries and
         Affiliates,  whose  total  obligations  to  Borrower  exceed 25% of all
         Accounts,  to the extent  such  obligations  exceed the  aforementioned
         percentage, except as approved in writing by Bank;

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

(l)      Accounts  the  collection  of which Bank  reasonably  determines  after
         inquiry and consultation with Borrower to be doubtful.

"Eligible  Foreign  Accounts"  means  Accounts with respect to which the account
debtor does not have its  principal  place of business in the United  States and
that (i) are  supported  by one or more  letters of credit in an amount and of a
tenor, and issued by a financial  institution,  acceptable to Bank, or (ii) that
Bank approves on a case-by-case basis.

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

"Event of Default" has the meaning assigned in Article 8.

"Foreign  Exchange  Sublimit"  means the sublimit under the Committed  Revolving
Line not to exceed $300,000.

"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

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<PAGE>

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 all of Borrower's  right,  title, and
interest in and to the following:

(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;

(c)      Any and all design  rights  which may be  available  to Borrower 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 sue 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.

"Interest  Payment  Date" means:  (i) with respect to each Prime Rate Loan,  the
first  Business Day of each and every month  commencing the first such day after
the making of such Loan,  and the Maturity  Date;  and (ii) with respect to each
LIBOR Loan, the earlier of: (1) the last day of the Interest Period with respect
thereto, or (2) if the Interest Period has a duration of more than three months,
every LIBOR  Business Day that occurs  during such  Interest  Period every three
months from the first day of such Interest Period.

"Interest  Period"  means,  as to any LIBOR Loan,  the period  commencing on the
Borrowing    Date   on   which   such   Loan   is    disbursed,    or   on   the
Conversion/Continuation Date on which the Loan is converted into or continued as
a LIBOR Loan, and ending on the date one, two, three or six months thereafter as
selected   by  the   Borrower   in  its  Notice  of   Borrowing   or  Notice  of
Conversion/Continuation, as the case may be; provided, however, that:

(a)      if any  Interest  Period  would  otherwise  end on a day  that is not a
         Business Day,  that Interest  Period shall be extended to the following
         Business Day unless the result of such extension would be to carry such
         Interest  Period  into  another  calendar  month,  in which  event such
         Interest Period shall end on the preceding Business Day;

(b)      any Interest Period  pertaining to a LIBOR Loan that begins on the last
         Business  Day of a  calendar  month (or on a day for which  there is no
         numerically  corresponding day in the calendar month at the end of such
         Interest  Period)  shall end on the last  Business  Day of the calendar
         month at the end of such Interest Period; and

(c)      Prior to the Revolving  Maturity Date, no Interest  Period for any Loan
         shall extend beyond the Revolving Maturity Date any after the Revolving
         Maturity Date, no Interest  Period for any Loan shall extend beyond the
         Maturity Date.

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<PAGE>

"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.

"Lending  Office"  means Bank's  office  located at its address set forth on the
signature  pages  hereof,  or such  other  office  of  Bank as it may  hereafter
designate as its Lending Office by notice to Borrower.

"Letter of Credit Sublimit" means a sublimit under the Committed  Revolving Line
not to exceed $5,000,000.

"LIBOR Business Day" means any Business Day on which major  commercial banks are
open for international  business  (including dealings in Dollar deposits) in Los
Angeles, California and London, England.

"LIBOR Lending Rate Margin" means 2.50 percentage points (250 basis points).

"LIBOR Loan" means any Loan that bears interest based on the LIBOR Rate.

"LIBOR Rate" with respect to a LIBOR Loan, the rate per annum  (rounded  upwards
if  necessary  to  the  nearest  whole  one-hundredth  of one  percent  (.01%)),
determined  as the sum of: (a) the  quotient of: (i) Base LIBOR for the relevant
Interest  Period of such LIBOR  Loan;  divided  by (ii) the number  equal to one
hundred  percent (100%) minus the LIBOR Reserve  Percentage with respect to such
Interest Period; plus (b) the LIBOR Lending Rate Margin. The LIBOR Rate shall be
adjusted  automatically on the effective date of any change in the LIBOR Reserve
Percentage,  such  adjustment  to affect  any  LIBOR  Loan  outstanding  on such
effective  date  to  the  extent  such  change  is  applied   retroactively   to
eurocurrency  funding  of a member  bank in the  Federal  Reserve  System.  Each
determination  of a LIBOR  Rate by Bank,  including,  but not  limited  to,  any
determination   as  to  the   applicability   or  allocability  of  reserves  to
eurocurrency  liabilities  or as to  the  amount  of  such  reserves,  shall  be
conclusive and final in the absence of manifest error.

"LIBOR Reserve Percentage" means, for any Interest Period of any LIBOR Loan, the
daily  average  of the  stated  maximum  rate  (rounded  upward  to the  nearest
one-hundredth of one percent  (.01%)),  as determined by Bank in accordance with
its usual procedures (which  determination shall be conclusive in the absence of
manifest  error),  at which  reserves are required to be maintained  during such
Interest  Period  by  Bank  (including  supplemental,  marginal,  and  emergency
reserves) under Regulation D by Bank against  Eurocurrency  liabilities (as such
term is defined in  Regulation  D), but without  benefit or credit of proration,
exemptions,  or offsets  that might  otherwise be available to Bank from time to
time under Regulation D. Without limiting the generality of the foregoing, LIBOR
Reserve Percentage shall include any other reserves required to be maintained by
Bank against (i) any category of liabilities that includes deposits by reference
to which  the  LIBOR  Rate for a LIBOR  Loan is  being  determined  and (ii) any
category of extension of credit or other assets that includes LIBOR Loans.

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

"Loan" means an extension of credit by a Bank to the Borrower  under Article II,
and may be a LIBOR Loan or a Prime Rate Loan (each, a "Type" of Loan).

"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.

--------------------------------------------------------------------------------
Imperial Bank - Loan                  Page 5
and Security Agreement
<PAGE>

"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.

"Merchant Card Services Sublimit" means a sublimit under the Committed Revolving
Line not to exceed $2,000,000.

"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.

"Notice  of  Borrowing"  means a notice in  substantially  the form of Exhibit C
attached hereto.

"Notice of Conversion/Continuation"  means a notice in substantially the form of
Exhibit F attached hereto.

"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.

"Other  Taxes"  means any present or future  stamp or  documentary  taxes or any
other excise or property  taxes,  charges or similar levies which arise from any
payment made hereunder or from the execution,  delivery or  registration  of, or
otherwise with respect to, this Agreement or any other Loan Documents.

"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;

(c)      Indebtedness not to exceed $500,000 in the aggregate  secured by a lien
         described in clause (c) of the defined term "Permitted Liens," provided
         such Indebtedness does not exceed the lesser of the cost or fair market
         value of the equipment financed with such Indebtedness;

(d)      Subordinated Debt; and

(e)      Extensions,  refinancings  and  renewals  of  any  items  of  Permitted
         Indebtedness,  provided that the  principal  amount is not increased or
         the terms 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;

(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 year from the date of  acquisition  thereof,  (ii)
         commercial  paper  maturing  no more  than  one  year  from the date of
         creation  thereof and  currently  having

--------------------------------------------------------------------------------
Imperial Bank - Loan                  Page 6
and Security Agreement
<PAGE>

         rating of at least A-2 or P-2 from either Standard & Poor's Corporation
         or Moody's  Investors  Service,  (iii) Bank's  certificates  of deposit
         maturing no more than one year from the date of investment therein, and
         (iv) Bank's money market accounts;

(c)      Repurchases  of stock from former  employees  or  directors of Borrower
         under the terms of applicable repurchase agreements (i) in an aggregate
         amount not to exceed  $100,000  in the  aggregate  in any fiscal  year,
         provided that no Event of Default has occurred,  is continuing or would
         exist after  giving  effect to the  repurchases,  or (ii) in any amount
         where the  consideration  for the  repurchase  is the  cancellation  of
         indebtedness  owed by such former  employees to Borrower  regardless of
         whether an Event of Default exists;

(d)      Investments accepted in connection with Permitted Transfers;

(e)      Investments of Subsidiaries in or to other Subsidiaries or Borrower and
         Investments by Borrower in  Subsidiaries  not to exceed $100,000 in the
         aggregate in any fiscal year;

(f)      Investments  consisting of (i) travel advances and employee  relocation
         loans and other employee  loans and advances in the ordinary  course of
         business,  and (ii) loans to employees,  officers or directors relating
         to the purchase of equity  securities  of Borrower or its  Subsidiaries
         pursuant  to  employee  stock  purchase  plan  agreements  approved  by
         Borrower's Board of Directors;

(g)      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  Borrower's
         business;

(h)      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
         subparagraph  (h) shall not apply to  Investments  of  Borrower  in any
         Subsidiary; and

(i)      Joint  ventures  or  strategic  alliances  in the  ordinary  course  of
         Borrower's  business  consisting  of  the  non-exclusive  licensing  of
         technology, the development of technology or the providing of technical
         support,  provided that any cash  Investments by Borrower do not exceed
         $100,000 in the aggregate in any fiscal year.

(j)      Investments  consistent with Borrower's written investment policy which
         has been approved by Bank in writing.

"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  and for  which  Borrower  maintains  adequate
         reserves,  provided  the  same  have no  priority  over  any of  Bank's
         security interests;

(c)      Liens  not to  exceed  $500,000  in the  aggregate  (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 incurred in connection with the extension, renewal or refinancing
         of the  indebtedness  secured by Liens of the type described in clauses
         (a)  through  (d)  above,  provided  that  any  extension,  renewal  or

--------------------------------------------------------------------------------
Imperial Bank - Loan                  Page 7
and Security Agreement
<PAGE>

         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;

(e)      Liens arising from judgments,  decrees or attachments in  circumstances
         not constituting an Event of Default under Sections 8.4 or 8.8;

(f)      Liens in favor of other  financial  institutions  arising in connection
         with Borrower's  deposit accounts held at such  institutions,  provided
         that Bank has a perfected security interest in the amounts held in such
         deposit accounts; and
(g)      Other  Liens not  described  above  arising in the  ordinary  course of
         business  and not  having or not  reasonably  likely to have a Material
         Adverse Effect on borrower and its Subsidiaries taken as a whole.

"Permitted Transfer" means the conveyance,  sale, lease, transfer or disposition
by Borrower or any Subsidiary of:

(a)      Inventory in the ordinary course of business;

(b)      licenses  and  similar  arrangements  for  the use of the  property  of
         Borrower or its Subsidiaries in the ordinary course of business;

(c)      surplus, worn-out or obsolete Equipment; or

(d)      other  assets  of  Borrower  or its  Subsidiaries  which  do not in the
         aggregate exceed $100,000 during any fiscal year.

"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.  Each time the Bank changes its Prime Rate,
the per annum  interest  rate of this  Agreement  shall change  immediately  and
contemporaneously with such change in the Prime Rate.

"Prime Rate Loan" means a Loan that bears interest based on the Prime Rate.

"Quick  Assets"  means,  at any date as of which  the  amount  thereof  shall be
determined, the unrestricted cash and cash-equivalents,  net 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
Operating Officer, the Chief Financial Officer and the Controller of Borrower.

"Revolving Facility" means the facility under which Borrower may request Bank to
issue Advances, as specified in Section 2.1(b) hereof.

"Revolving Maturity Date" means March 28, 2002.

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

"Solvent"  means,  with  respect  to any  Person  on the date any  determination
thereof is to be made,  that on such date: (a) the present fair valuation of the
Assets of such  Person is  greater  than such  Person's  probable  liability  in
respect of  existing  debts;  (b) such  Person  does not intend to, and does not
believe that it will,  incur debts beyond such  Person's  ability to pay as such
debts mature;  and (c) such Person is not engaged in business or a  transaction,
and is not about to engage in business or a transaction,  which would leave such
Person with Assets remaining which would

--------------------------------------------------------------------------------
Imperial Bank - Loan                  Page 8
and Security Agreement
<PAGE>

constitute  unreasonably  small capital after giving effect to the nature of the
particular business or transaction. For purposes of this definition (i) the fair
valuation  of any  property  or assets  means  the  amount  realizable  within a
reasonable  time,  either  through  collection  or sale of such  Assets at their
regular market value,  which is the amount  obtainable by a capable and diligent
Person from an  interested  buyer  willing to purchase  such  property or assets
within a reasonable time under ordinary  circumstances;  and (ii) the term debts
includes any payment obligation,  whether or not reduced to judgment,  equitable
or legal, matured or unmatured, liquidated.

"Subordinated  Debt" means any debt incurred by Borrower that is subordinated to
the debt owing by Borrower to Bank on terms  reasonably  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, at the time as of which any determination is being made,
is 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 sum of the capital stock and  additional  paid-in  capital plus
retained   earnings  (or  minus   accumulated   deficit)  of  Borrower  and  its
Subsidiaries minus intangible assets,  plus Subordinated Debt, on a consolidated
basis determined in accordance with GAAP.

"Taxes" means any and all present or future taxes, levies, imposts,  deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Bank and the Agent, a tax imposed on or measured by the overall
net income  (including  a  franchise  tax based on net  income) of a Bank or its
Lending  Offices by the  United  States and by the  jurisdictions  or  political
subdivision or taxing authority thereof in which such Bank's principal office or
Lending  Offices  are  located  or  are  resident  or  in  which  such  Bank  is
incorporated.

"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.

"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 Borrower connected with
and symbolized by such trademarks.

"UCC" means the California  Uniform  Commercial  Code as amended or supplemented
time to time,  including  revised  Division 9 of the Uniform  Commercial  Code -
Secured  Transactions,  added by Stats. 1999, c.991 (S.B. 45), ss. 35, operative
July 1, 2001.

"Unmatured  Event of Default" means any condition or event which with the giving
of notice or lapse of time or both  would,  unless  cured or  waived,  become an
Event of Default.

--------------------------------------------------------------------------------
Imperial Bank - Loan                  Page 9
and Security Agreement
<PAGE>

DEBTOR                     PUMATECH, INC.

SECURED PARTY:             IMPERIAL BANK

                                    EXHIBIT B

COLLATERAL                          DESCRIPTION                       ATTACHMENT
TO LOAN AND SECURITY AGREEMENT

All personal property of Borrower (herein referred to as "Borrower" or "Debtor")
whether presently existing or hereafter created,  written, produced or acquired,
including, but not limited to:

(a)  all accounts (including health-care-insurance  receivables),  chattel paper
     (including  tangible  and  electronic  chattel  paper),  deposit  accounts,
     documents,  equipment  (including all  accessions  and additions  thereto),
     general   intangibles   (including   payment   intangibles  and  software),
     instruments, inventory (including all goods held for sale or lease or to be
     furnished  under  a  contract  of  service,   and  including   returns  and
     repossessions),  investment property  (including  securities and securities
     entitlements),  letter of credit rights,  money,  and all of Debtor's books
     and records with respect to any of the  foregoing,  and the  computers  and
     equipment containing said books and records;

(b)  all  common  law and  statutory  copyrights  and  copyright  registrations,
     applications for registration,  now existing or hereafter  arising,  in the
     United States of America or in any foreign jurisdiction,  obtained or to be
     obtained on or in connection with any of the forgoing, or any parts thereof
     or any  underlying or component  elements of any of the forgoing,  together
     with the  right to  copyright  and all  rights  to  renew  or  extend  such
     copyrights  and the right (but not the  obligation) of Secured Party to sue
     in its own name  and/or in the name of the  Debtor  for past,  present  and
     future infringements of copyright;

(c)  all  trademarks,  service  marks,  trade  names and  service  names and the
     goodwill associated therewith, together with the right to trademark and all
     rights  to renew or  extend  such  trademarks  and the  right  (but not the
     obligation)  of Secured  Party to sue in its own name and/or in the name of
     the Debtor for past, present and future infringements of trademark;

(d)  all (i) patents and patent  applications  filed in the United States Patent
     and Trademark Office or any similar office of any foreign jurisdiction, and
     interests under patent license agreements,  including,  without limitation,
     the  inventions  and  improvements  described  and  claimed  therein,  (ii)
     licenses  pertaining to any patent  whether Debtor is licensor or licensee,
     (iii)  income,  royalties,   damages,   payments,   accounts  and  accounts
     receivable  now or  hereafter  due and/or  payable  under and with  respect
     thereto,  including,  without  limitation,  damages and  payments for past,
     present  or  future  infringements   thereof,   (iv)  right  (but  not  the
     obligation)  to sue in the name of  Debtor  and/or  in the name of  Secured
     Party for past,  present  and  future  infringements  thereof,  (v)  rights
     corresponding  thereto  throughout the world in all  jurisdictions in which
     such patents have been issued or applied for, and (vi) reissues, divisions,
     continuations,  renewals, extensions and continuations-in-part with respect
     to any of the foregoing; and

(e)  any and all cash proceeds and/or noncash  proceeds of any of the foregoing,
     including,  without  limitation,  insurance  proceeds,  and all  supporting
     obligations  and the  security  therefor or for any right to  payment.  All
     terms  above  have the  meanings  given to them in the  California  Uniform
     Commercial  Code, as amended or supplemented  from time to time,  including
     revised  Division 9 of the Uniform  Commercial  Code-Secured  Transactions,
     added by Stats. 1999, c.991 (S.B. 45), Section 35, operative July 1, 2001.

                                       10
<PAGE>

                                    EXHIBIT C

LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

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

TO:  [_______________]                                       DATE:  ____________

FAX #:  [_______________]                                    TIME:  ____________

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

--------------------------------------------------------------------------------
FROM:   [BORROWER]
      --------------------------------------------------------------------------
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)                      $_________________________
REQUESTED LOAN TYPE
-------------------
PRIME RATE LOAN  _____
LIBOR RATE LOAN  _____
Borrower  represents  and  warrants  that  after  giving  effect to the  Advance
requested herein, there shall not be more than three (3) LIBOR Loans outstanding
OTHER INSTRUCTIONS:
                    ------------------------------------------------------------

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

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

--------------------------------------------------------------------------------
BANK USE ONLY
TELEPHONE REQUEST:
-----------------

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


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



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


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


                                       11
<PAGE>
                                    EXHIBIT D
<TABLE>
BORROWING BASE CERTIFICATE
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
Borrower:  Pumatech, Inc.                                                                            Lender:  Imperial Bank

Commitment Amount:  $10,000,000
-------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                                                                      <C>                 <C>
ACCOUNTS RECEIVABLE
         1.       Accounts Receivable Book Value as of ___                                                     $___________
         2.       Additions (please explain on reverse)                                                        $___________
         3.       TOTAL ACCOUNTS RECEIVABLE                                                                    $___________

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
         4.       Amounts over 90 days due                                                 $___________
         5.       Balance of 25% over 90 day accounts                                      $___________
         6.       Concentration Limits
         7.       Foreign Accounts                                                         $___________
         8.       Governmental Accounts                                                    $___________
         9.       Contra Accounts                                                          $___________
         10.      Demo Accounts                                                            $___________
         11.      Intercompany/Employee Accounts                                           $___________
         12.      Other (please explain on reverse)                                        $___________
         13.      TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS                                                         $___________
         14.      Eligible Accounts (#3 minus #13)                                                             $___________
         15.      LOAN VALUE OF ACCOUNTS (__% of #14)                                                          $___________

BALANCES
         16.      Maximum Loan Amount                                                                          $___________
         17.      Total Funds Available [Lesser of #16 or #15]                                                 $___________
         18.      Present balance owing on Line of Credit                                                      $___________
         19.      Outstanding under Sublimits (Letters of Credit and Credit Card Services)                     $___________
         20.      RESERVE POSITION (#17 minus #18 and #19)                                                     $___________
</TABLE>

The undersigned represents and warrants that the foregoing is true, complete and
correct in all material  respects,  and that the  information  reflected in this
Borrowing Base Certificate  complies with the representations and warranties set
forth in the Loan and Security  Agreement  between the  undersigned and Imperial
Bank.

Pumatech, Inc.


By:
   ------------------------------------
             Authorized Signer


                                       12

<PAGE>
                                    EXHIBIT E
                             COMPLIANCE CERTIFICATE

TO:               IMPERIAL BANK

FROM:             PUMATECH, INC.

The undersigned  authorized  officer of Pumatech,  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,
including without limitation the ongoing  registration of intellectual  property
rights in  accordance  with  Section  6.9,  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.
<TABLE>
<CAPTION>
        Reporting Covenant                                        Required                                      Complies
        ------------------                                        --------                                      --------
<S>                                                               <C>                      <C>                  <C>        <C>
        Quarterly financial statements                            Quarterly within 50 days                      Yes        No
        Annual (CPA Audited)                                      FYE within 95 days                            Yes        No
        10K and 10Q                                               Within 50 and 95 days                         Yes        No
        A/R & A/P Agings, Borrowing Base Cert.                    Monthly within 20 days                        Yes        No

        Financial Covenant                                        Required                 Actual               Complies
        ------------------                                        --------                 ------               --------

        Maintain on a Quarterly Basis:
             Minimum Modified Quick Ratio                         2.50:1.00                _____:1.00           Yes        No
             Minimum Tangible Net Worth                           $45,000,000              $________            Yes        No
</TABLE>


<TABLE>
<CAPTION>
<S>                                                              <C>                             <C>       <C>
Comments Regarding Exceptions:  See Attached.                    ---------------------------------------------------

                                                                 BANK USE ONLY

Sincerely,                                                       Received by: ______________________________________
                                                                 AUTHORIZED SIGNER

                                                                 Date: _____________________________________________

------------------------------------------------------------     Verified: _________________________________________
SIGNATURE
                                                                 AUTHORIZED SIGNER

------------------------------------------------------------
TITLE                                                            Date: _____________________________________________


------------------------------------------------------------     Compliance Status               Yes        No
DATE

                                                                 ---------------------------------------------------
</TABLE>

                                       13
<PAGE>
                                    EXHIBIT F

                                 PROMISSORY NOTE

$ 10,000,000                                               Palo Alto, California
                                                                  March 29, 2001

         On the Maturity Date, the undersigned,  for value received, promises to
pay to the order of  Imperial  Bank,  as agent  pursuant  to the Loan  Agreement
referred to below, for Imperial Bank ("Payee"),  at the office of Imperial Bank,
located  at 5 Palo Alto  Square,  Suite  800,  3000 El Camino  Real,  Palo Alto,
California  95131,  the  principal  sum equal to the  lesser of (a) Ten  Million
Dollars  ($10,000,000)  representing  Payee's  Commitment  or (b) the  aggregate
unpaid principal  amount of all Loans made by Payee to the undersigned  pursuant
to that certain Loan and Security Agreement,  dated as of March 29, 2001, and as
from time to time amended, modified or supplemented,  the "Loan Agreement"),  by
and between the undersigned  and the Payee.  Terms defined in the Loan Agreement
and not otherwise  defined herein shall have the same  respective  meanings when
used herein.

         The unpaid principal balance hereof from time to time outstanding shall
bear interest from the date of disbursement until the Maturity Date at the rates
specified in the Loan  Agreement.  Interest on the Loan shall be paid in arrears
on each Interest  Payment Date.  Interest  shall also be paid on the date of any
prepayment for the portion of the Loan so prepaid,  and upon payment  (including
prepayment)  in full thereof and,  during the existence of any Event of Default,
interest  shall be paid on demand of the Payee.  Interest  shall be computed for
the actual number of days elapsed as provided in the Loan Agreement.

         Payments of both  principal and interest are to be made in  immediately
available funds in lawful money of the United States of America.

         This Note evidences  indebtedness incurred under, and is subject to the
terms and provisions of, the Loan Agreement,  to which Loan Agreement  reference
is hereby made for a statement  of said terms and  provisions,  including  those
under  which this Note may be paid prior to its due date or under  which its due
date may be accelerated, and for a description of the security for this Note.

         This Note is made under and governed by the internal  laws of the State
of California.

                                             PUMATECH, INC.



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


                                       14
<PAGE>
                             SCHEDULE OF EXCEPTIONS

Permitted Indebtedness  (Exhibit A)



Permitted Investments  (Exhibit A)



Permitted Liens  (Exhibit A)



Prior Names  (Section 5.6)



Litigation  (Section 5.6)

                                       15
<PAGE>
                         CORPORATE RESOLUTIONS TO BORROW

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

Borrower:         Pumatech, Inc.
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         I, the  undersigned  officer of  Pumatech,  Inc.  (the  "Corporation"),
HEREBY  CERTIFY  that the  Corporation  is organized  and existing  under and by
virtue of the laws of the State of Delaware.

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

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

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

NAMES                      POSITION                  ACTUAL SIGNATURES
-----                      --------                  -----------------

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

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

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

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


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

         Borrow Money.  To borrow from time to time from Imperial Bank ("Bank"),
on such terms as may be agreed upon between the officers,  employees,  or agents
of the  Corporation  and  Bank,  such sum or sums of money as in their  judgment
should be borrowed, without limitation, including, without limitation, such sums
as are specified in that certain Loan and Security  Agreement  dated as of March
29, 2001, (the "Loan Agreement").

         Execute  Loan  Documents.  To  execute  and  deliver  to Bank  the Loan
Agreement and any other agreement  entered into between  Corporation and Bank in
connection with the Loan Agreement, all as amended or extended from time to time
(collectively,  with the Loan  Agreement,  the  "Loan  Documents"),  and also to
execute and  deliver to Bank one or more  renewals,  extensions,  modifications,
refinancings,  consolidations,  or substitutions for the Loan Documents,  or any
portion thereof.

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

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

         Warrants.  To issue a warrant or warrants to purchase the Corporation's
capital stock.

         Letters  of  Credit;  Foreign  Exchange.  To  execute  letter of credit
applications, foreign exchange agreements and other related documents pertaining
to Bank's issuance of letters of credit and foreign exchange contracts.

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

                                       1
<PAGE>
         BE IT FURTHER  RESOLVED,  that any and all acts authorized  pursuant to
these  resolutions and performed  prior to the passage of these  resolutions are
hereby ratified and approved,  that these Resolutions shall remain in full force
and effect and Bank may rely on these  Resolutions until written notice of their
revocation  shall have been  delivered to and received by Bank.  Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

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

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



                                            CERTIFIED AND ATTESTED BY:


                                            X
                                              ----------------------------------


                                       2
<PAGE>

                                  IMPERIAL BANK
                                   Member FDIC

                         ITEMIZATION OF AMOUNT FINANCED
                            DISBURSEMENT INSTRUCTIONS


Name(s):  Pumatech, Inc.                                   Date:  March 29, 2001

     $           credited to deposit account No.  ____________ when Advances are
                 requested  or disbursed  to Borrower by cashiers  check or wire
                 transfer

Amounts paid to others on your behalf:
     $           to Imperial Bank for Loan Fee
     $           to Imperial Bank for Document Fee
     $           to Imperial Bank for accounts receivable audit (estimate)
     $           to Bank counsel fees and expenses
     $           to _______________
     $           to _______________
     $           TOTAL (AMOUNT FINANCED)

Upon  consummation  of this  transaction,  this  document will also serve as the
authorization for Imperial Bank to disburse the loan proceeds as stated above.


----------------------------------        --------------------------------------
Signature                                 Signature


<PAGE>
                         AGREEMENT TO PROVIDE INSURANCE

TO:      IMPERIAL BANK                                 Date:  March 29, 2001
         9920 S. La Cienega, Ste. 628
         Inglewood, CA 90301                           Borrower:  Pumatech, Inc.

         In consideration of a loan in the amount of $10,000,000.00,  secured by
         all tangible personal property including inventory and equipment.

         I/We agree to obtain  adequate  insurance  coverage  to remain in force
during the term of the loan.

         I/We also agree to advise the below named agent to add Imperial Bank as
         lender's loss payable on the new or existing  insurance policy,  and to
         furnish Bank at above  address with a copy of said  policy/endorsements
         and any subsequent renewal policies.

         I/We understand that the policy must contain:

         1.       Fire and extended coverage in an amount sufficient to cover:

                  (a)      The amount of the loan, OR

                  (b)      All existing encumbrances, whichever is greater,

                  But not in excess of the replacement value of the improvements
on the real property.

         2.       Lender's  "Loss  Payable"  Endorsement  Form 438 BFU  in favor
                  of Imperial Bank, or any other form acceptable to Bank.

INSURANCE INFORMATION

         Insurance Co./Agent                        Telephone No.:

         Agent's Address:

                           Signature of Obligor:
                                                 -------------------------------

                           Signature of Obligor:
                                                 -------------------------------

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


                  -------------------------------------------------
                  FOR BANK USE ONLY
                  INSURANCE VERIFICATION: Date:
                                              ---------------------
                  Person Spoken to:
                                   --------------------------------
                  Policy Number:
                                   --------------------------------
                  Effective From:              To:
                                  -------------   -----------------
                  Verified by:
                              -------------------------------------

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


<PAGE>



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IMPERIAL BANK
California's Business Banks   AUTOMATIC DEBIT AUTHORIZATION
Member FDIC

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--------------------------------------- ----------------------------------------
To:  Imperial Bank

Re:  Loan # ___________________________________

You are hereby authorized and instructed to charge account No. _________________
in the name of Pumatech, Inc.
--------------------------------------------------------------------------------
for principal and interest  payments due on above  referenced  loan as set forth
below and credit the loan referenced above.

         __X__ Debit each  interest  payment as it becomes due  according to the
         terms of the note and any renewals or amendments thereof.

         __X__ Debit each  principal  payment is at becomes due according to the
         terms of the note and any renewals or amendments thereof.

This  Authorization  is to remain in full  force and  effect  until  revoked  in
writing.

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

-------------------------------------------- -----------------------------------
   Borrower Signature                        Date
-------------------------------------------- -----------------------------------

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</TEXT>
</DOCUMENT>
