C COR NET CORP
FINANCING AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>exhibit10q1.txt
<DESCRIPTION>FINANCING AGREEMENT
<TEXT>
                                                                      Exhibit 10

                                                          FIN.  AGT. - COP MODEL
                                                                   MULTIBORROWER
                                                     LIBOR & CAP.EX. & T/L & R/C

                                                                  EXECUTION COPY








                               FINANCING AGREEMENT




                       The CIT Group/Business Credit, Inc.

                                   (as Lender)


                                       And



                                C-COR.net Corp.,
                      Broadband Management Solutions, LLC,
                         Broadband Capital Corporation,
                          Broadband Royalty Corporation
                                       And
                        Broadband Network Services, Inc.
                                 (as Borrowers)


                             Dated: November 7, 2002








<PAGE>


                                TABLE OF CONTENTS
                                                                            Page
SECTION 1.        Definitions..................................................3
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SECTION 2.        Conditions Precedent........................................15
                  --------------------
SECTION 3.        Revolving Loans.............................................19
                  ---------------
SECTION 4.        [Intentionally left blank]..................................24
                  --------------------------
SECTION 5.        Letters of Credit...........................................24
                  -----------------
SECTION 6.        Collateral..................................................26
                  ----------
SECTION 7.        Representations, Warranties and Covenants...................30
                  -----------------------------------------
SECTION 8.        Interest, Fees and Expenses.................................42
                  ---------------------------
SECTION 9.        Powers......................................................45
                  ------
SECTION 10.       Events of Default and Remedies..............................46
                  ------------------------------
SECTION 11.       Termination.................................................50
                  -----------
SECTION 12.       Miscellaneous...............................................50
                  -------------

SCHEDULES
---------

Schedule 1 - Collateral Information
Schedule 2 - Real Estate Subject to Mortgages
Schedule 3 - Assigned Life Insurance Policies
Schedule 4 - Fiscal Quarters
Schedule 5 - Existing Guaranties
Schedule 6 - Existing Litigation


<PAGE>



         THE CIT  GROUP/BUSINESS  CREDIT,  INC.,  a New York  corporation,  with
offices  located at Two Wachovia  Center,  23rd Floor,  301 South Tryon  Street,
Charlotte,  North Carolina 28202 (hereinafter  "CIT"), is pleased to confirm the
terms and conditions under which CIT shall make revolving loans,  term loans and
other financial  accommodations  to C-COR.NET CORP., a Pennsylvania  corporation
with a principal place of business at 60 Decibel Road,  State College,  PA 16801
(herein  "C-COR"),  BROADBAND  MANAGEMENT  SOLUTIONS,  LLC, a  Delaware  limited
liability  company with a principal  place of business at 5673 Gibraltar  Drive,
Pleasanton,   CA  94588  (herein  "Broadband  Management"),   BROADBAND  CAPITAL
CORPORATION,  a Delaware  corporation with a principal place of business at 1105
North  Market  Street,  Suite  1300,  Wilmington,  DE 19899  (herein  "Broadband
Capital"),   BROADBAND  ROYALTY  CORPORATION,  a  Delaware  corporation  with  a
principal place of business at 1105 North Market Street, Suite 1300, Wilmington,
DE 19899(herein  "Broadband  Royalty") and BROADBAND NETWORK  SERVICES,  INC., a
Delaware  corporation with a principal place of business at 141 Union Boulevard,
Suite 475, Lakewood,  CO 80228 (herein "Broadband Network") (each individually a
"Company" and collectively, the "Companies").

SECTION 1.             Definitions.
                       -----------

Accounts shall mean all of each of the  Companies' now existing and future:  (a)
--------
accounts (as defined in the UCC), and any and all other receivables  (whether or
not  specifically  listed on  schedules  furnished to CIT),  including,  without
limitation,  all  accounts  created  by,  or  arising  from,  all of each of the
Companies'  sales,  leases,  rentals of goods or renditions of services to their
customers, including but not limited to, those accounts arising under any of the
Companies'  trade names or styles,  or through any of the Companies'  divisions;
(b) any and all  instruments,  documents,  chattel paper  (including  electronic
chattel  paper)  (all as defined in the UCC);  (c) unpaid  seller's  or lessor's
rights (including rescission,  replevin, reclamation,  repossession and stoppage
in transit)  relating to the foregoing or arising  therefrom;  (d) rights to any
goods  represented  by any of  the  foregoing,  including  rights  to  returned,
reclaimed or  repossessed  goods;  (e) reserves and credit  balances  arising in
connection  with or pursuant  hereto;  (f) guarantees,  supporting  obligations,
payment intangibles and letter of credit rights (all as defined in the UCC); (g)
insurance  policies  or rights  relating  to any of the  foregoing;  (h) general
intangibles  pertaining to any and all of the foregoing (including all rights to
payment,  including  those arising in connection  with bank and non-bank  credit
cards),  and including  books and records and any electronic  media and software
thereto;  (i) notes,  deposits  or  property  of account  debtors  securing  the
obligations of any such account debtors to the Companies or any one of them; and
(j) cash and  non-cash  proceeds  (as  defined in the UCC) of any and all of the
foregoing.

Administrative  Management  Fee shall mean the sum of $36,000.00  which shall be
-------------------------------
paid to CIT in  accordance  with Section 8,  paragraph  8.8 hereof to offset the
expenses and costs (excluding Out-of-Pocket Expenses and auditor fees) of CIT in
connection with  administration,  record  keeping,  analyzing and evaluating the
Collateral.
<PAGE>

Anniversary  Date shall mean the date  occurring  two (2) years from the Closing
-----------------
Date and the same date in every year thereafter.

Availability  shall mean,  as to the  Companies in the  aggregate at any time of
------------
calculation,  the  amount by  which:  (a) the  Borrowing  Base  exceeds  (b) the
outstanding  aggregate  amount  of  all of its  Obligations,  including  without
limitation,  all Obligations  with respect to Revolving Loans and the Letters of
Credit.

Availability  Reserve  shall  mean the sum of:  (a) any  reserve  which  CIT may
---------------------
reasonably  require  from time to time  pursuant  to this  Financing  Agreement,
including  without  limitation,  a reserve  for  Letters of Credit  pursuant  to
Paragraph 5.1 of Section 5 hereof and a reserve of at least thirty-five  percent
(35%) of the warranty  accrual set forth on the balance  sheet of the  Companies
(excluding that portion of the warranty  accrual which relates to the "Hub Scrub
Project" and that portion of the warranty  accrual  which relates to the foreign
subsidiaries  of the  Companies);  and (b)  such  other  reserves  as CIT  deems
necessary  in its  reasonable  judgment  as a result of (i)  negative  forecasts
and/or  trends  in  any  Company's  business,  industry,   prospects,   profits,
operations or financial condition, or (ii) other issues,  circumstances or facts
that could otherwise negatively impact the Companies,  or any one of them, their
business,  prospects,  profits,  operations,  industry,  financial  condition or
assets.

Benefit Plan shall mean a defined  benefit  plan as defined in Section  3(35) of
------------
ERISA (other than a  "multiemployer  plan," as such term is defined in ERISA) in
respect  of  which  the  Company  or any  ERISA  Affiliate  is,  or  within  the
immediately  preceding  six (6) years was, an  "employer"  as defined in Section
3(5) of ERISA.

Borrowing  Base shall mean, as to the Companies (in the  aggregate),  the sum of
---------------
(a) eighty-five percent (85%) of the Companies'  aggregate  outstanding Eligible
Accounts Receivable,  provided, however, that if the then Dilution Percentage is
greater than five percent (5%), then the rate of advance herein shall be reduced
by the amount of such excess Dilution Percentage,  plus (b) ninety percent (90%)
of  the  aggregate  cash  surrender   value  of  the  life  insurance   policies
collaterally  assigned by the  Companies to CIT from time to time,  as such cash
surrender  value  is  determined  by CIT  from  time to  time in its  reasonable
discretion and as such assignments are made to the satisfaction of CIT, less (c)
any applicable Availability Reserves.

Business Day shall mean any day on which CIT and JP  Morgan/Chase  Bank are open
------------
for business.

Chase  Bank Rate  shall  mean the rate of  interest  per annum  announced  by JP
----------------
Morgan/Chase Bank from time to time as its prime rate in effect at its principal
office in New York City.  (The prime rate is not  intended to be the lowest rate
of interest charged by JP Morgan/Chase Bank to its borrowers).

Chase Based Rate shall have the meaning  given to such term in Paragraph  8.1 of
----------------
Section 8 of this Financing Agreement.
<PAGE>

Closing  Date shall mean the date that this  Financing  Agreement  has been duly
-------------
executed by the parties hereto and delivered to CIT.

Collateral  shall mean all present and future  Accounts,  Equipment,  Inventory,
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Documents of Title,  General Intangibles,  Real Estate,  Pledged Stock and Other
Collateral of each of the Companies.

Collection  Days shall mean one (1)  Business  Days to provide for the  deposit,
----------------
clearance  and  collection  of  checks  or other  instruments  representing  the
proceeds of Collateral,  the amount of which has been credited to the Companies'
Revolving  Loan Account,  and for which interest may be charged on the aggregate
amount of such deposits,  at the rate provided for in Paragraph 8.1 of Section 8
of this Financing Agreement.

Consolidated Balance Sheet shall mean a consolidated or compiled, as applicable,
--------------------------
balance sheet for the Companies and their consolidated subsidiaries, eliminating
all inter-company transactions and prepared in accordance with GAAP.

Consolidating  Balance  Sheet  shall  mean a  Consolidated  Balance  Sheet  plus
-----------------------------
individual balance sheets for the Companies and their consolidated subsidiaries,
showing all  eliminations  of  inter-company  transactions,  including a balance
sheet for each of the Companies  exclusively,  all prepared in  accordance  with
GAAP.

Copyrights  shall  mean  all of each of the  Companies'  present  and  hereafter
----------
acquired copyrights, copyright registrations, recordings, applications, designs,
styles,  licenses,  marks,  prints  and  labels  bearing  any of the  foregoing,
goodwill,  any and all general  intangibles,  intellectual  property  and rights
pertaining thereto, and all cash and non-cash proceeds thereof.

Current  Assets shall mean those assets of the  Companies  which,  in accordance
---------------
with GAAP, are classified as current.

Current  Liabilities  shall mean those  liabilities of the Companies  which,  in
-------------------
accordance  with GAAP,  are  classified as "current,"  provided  however,  that,
notwithstanding  GAAP, the Revolving  Loans and the current portion of Permitted
Indebtedness shall be considered "current liabilities."

Default shall mean any event specified in Section 10 hereof,  whether or not any
-------
requirement  for the giving of notice,  the lapse of time, or both, or any other
condition, event or act, has been satisfied.

Default  Rate  of  Interest  shall  mean a rate of  interest  per  annum  on any
---------------------------
Obligations  hereunder,  equal to the sum of: (a) two  percent  (2%) and (b) the
applicable Chase Based Rate or the LIBOR Based Rate, which CIT shall be entitled
to charge the Companies on all Obligations due CIT by the Companies,  as further

<PAGE>

set forth in Paragraph 10.2 of Section 10 of this Financing Agreement.

Depository  Accounts  shall mean the collection  accounts,  which are subject to
--------------------
CIT's instructions, as specified in Paragraph 3.4 of Section 3 of this Financing
Agreement.

Dilution  Percentage shall mean, as of any time of calculation,  the then sum of
--------------------
the Companies' credits,  claims,  allowances,  discounts,  write-offs,  contras,
off-sets and deductions  divided by the then sum of Trade  Accounts  Receivable,
all  calculated  on a  rolling  ninety  (90)  day  average,  as  determined  and
calculated by CIT from time to time.

Documentation Fee shall mean subsequent to the Closing Date, CIT's standard fees
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relating  to  any  and  all  modifications,  waivers,  releases,  amendments  or
additional  collateral with respect to this Financing Agreement,  the Collateral
and/or the Obligations.

Documents of Title shall mean all of each of the  Companies'  present and future
------------------
documents (as defined in the UCC), and any and all warehouse receipts,  bills of
lading,  shipping documents,  chattel paper,  instruments and similar documents,
all whether  negotiable or not and all goods and Inventory  relating thereto and
all cash and non-cash proceeds of the foregoing.

Early  Termination Date shall mean the date on which the Companies or any one of
-----------------------
them terminates  this Financing  Agreement or the Revolving Line of Credit which
date is prior to an Anniversary  Date. Notice of termination,  as aforesaid,  by
any one  Company  shall be deemed to be notice  by the  Companies  for  purposes
hereof.

Early  Termination  Fee shall:  (a) mean the fee CIT is  entitled  to charge the
-----------------------
Companies in the event the Companies or any one of them terminates the Revolving
Line of Credit or this  Financing  Agreement  on a date prior to an  Anniversary
Date; and (b) be determined by  multiplying  the Revolving Line of Credit by (i)
two  percent  (2%) if the Early  Termination  Date  occurs on or before nine (9)
months  from the Closing  Date  (provided,  however,  such  percentage  shall be
reduced to 1% on account of a termination  resulting from the acquisition of the
Companies),  (ii) one percent  (1%) if the Early  Termination  Date occurs after
nine (9) months  from the  Closing  Date but on or before two (2) years from the
Closing Date; and (iii) zero percent (0%) if the Early  Termination  Date occurs
after two (2) years  from the  Closing  Date but prior to an  Anniversary  Date;
provided,  however,  if the Companies  elect to refinance the  Obligations  with
another lender during the time period  described in subparagraph  (ii) above and
CIT was offered the terms  accepted by such other lender but declined to provide
financing on such terms, the Early  Termination Fee provided for in subparagraph
(ii) above shall be deemed waived by CIT upon the  refinance of the  Obligations
by such other lender on such terms.

Eligible Accounts Receivable shall mean, as to any Company,  the gross amount of
----------------------------
such Company's Trade Accounts Receivable that are subject to a valid, exclusive,
first  priority and fully  perfected  security  interest in favor of CIT,  which
conform to the warranties contained herein and which, at all times,  continue to

<PAGE>

be acceptable to CIT in the exercise of its reasonable business judgment,  less,
without duplication, the sum of: (a) any returns, discounts, claims, credits and
allowances  of  any  nature  (whether  issued,   owing,   granted,   claimed  or
outstanding), and (b) reserves for any such Trade Accounts Receivable that arise
from or are  subject to or include:  (i) sales to the United  States of America,
any state or other governmental entity or to any agency,  department or division
thereof,  except for any such sales as to which such Company has  complied  with
the Assignment of Claims Act of 1940 or any other applicable  statute,  rules or
regulation,  to CIT's  satisfaction  in the exercise of its reasonable  business
judgment;  (ii) foreign sales,  other than sales which otherwise comply with all
of the other criteria for  eligibility  hereunder and are (x) secured by letters
of credit (in form and  substance  satisfactory  to CIT) issued or confirmed by,
and payable at,  banks  satisfactory  to CIT,  having a place of business in the
United States of America,  or (y) to customers  residing in Canada provided such
Accounts do not exceed  $3,000,000.00  in the  aggregate at any one time;  (iii)
Accounts that remain unpaid more than ninety (90) days from invoice date or past
due more than sixty  (60) days;  (iv)  contra  accounts;  (v) sales to any other
Company, any subsidiary,  or to any company affiliated with the Companies in any
way; (vi) bill and hold (deferred shipment) or consignment sales; (vii) sales to
any  customer  which  is:  (A)  insolvent,  (B) the  debtor  in any  bankruptcy,
insolvency,  arrangement,  reorganization,  receivership or similar  proceedings
under any federal or state law, (C) negotiating,  or has called a meeting of its
creditors  for  purposes  of  negotiating,  a  compromise  of its debts,  or (D)
financially  unacceptable  to CIT or has a credit  rating  unacceptable  to CIT;
(viii) all sales to any customer if fifty percent (50%) or more of the aggregate
dollar amount of all outstanding  invoices to such customer are unpaid more than
ninety (90) days from invoice  date or past due more than sixty (60) days;  (ix)
pre-billed  receivables and receivables  arising from progress  billing;  (x) an
amount  representing,   historically,   returns,  discounts,   claims,  credits,
allowances  and  applicable  terms;  (xi)  sales not  payable  in United  States
currency;  and (xii) any other reasons deemed necessary by CIT in its reasonable
business judgment, including without limitation those which are customary either
in  the  commercial  finance  industry  or in  the  lending  practices  of  CIT.
Notwithstanding  anything  to  the  contrary  contained  herein,  (i)  the  term
"Eligible Accounts  Receivable" shall not include the Trade Accounts  Receivable
of Broadband  Networks and Broadband  Management  and (ii) Accounts from any one
customer  shall not be  "Eligible  Accounts  Receivable"  to the extent that the
aggregate amount of such Accounts exceeds fifteen percent (15%) of the Revolving
Line of Credit.

Environmental Laws shall mean applicable federal,  state or local laws, rules or
------------------
regulations,  and any applicable judicial interpretations thereof, including any
judicial  or  administrative  order,  judgment,  permit,  approval  decision  or
determination,  in each case  pertaining  to  conservation  or protection of the
environment, in effect at the time in question, including the Clean Air Act, the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
the Federal Water Pollution Control Act, the Occupational Safety and Health Act,
the Resource  Conservation  and Recovery Act, the Safe  Drinking  Water Act, the
Toxic Substances Control Act, the Superfund  Amendments and  Reauthorization Act
of 1986,  the Hazardous  Materials  Transportation  Act and analogous  state and
local laws as may be amended from time to time thereby  imposing  either more or
less  stringent  requirements  as relates to activity  occurring  after the date
hereof of any such amendments
<PAGE>

Equipment  shall mean all of each  Companies'  present  and  hereafter  acquired
---------
equipment (as defined in the UCC) including,  without limitation, all machinery,
equipment,  furnishings  and  fixtures,  and all  additions,  substitutions  and
replacements   thereof,   wherever  located,   together  with  all  attachments,
components,  parts,  equipment  and  accessories  installed  thereon  or affixed
thereto and all proceeds thereof of whatever sort.

ERISA shall mean the Employee Retirement Income Security Act or 1974, as amended
-----
from time to time and the rules and regulations promulgated thereunder from time
to time.

ERISA  Affiliate  shall mean any (i)  corporation  which is or was at any time a
---------------
member of the same  controlled  group of  corporations  (within  the  meaning of
Section 414(b) of the Internal Revenue Code) as the Company; (ii) partnership or
other trade or business  (whether or not  incorporated) at any time under common
control (within the meaning of Section 414(c) of the Internal Revenue Code) with
the Company;  and (iii) member of the same affiliated  service group (within the
meaning of Section  414(m) of the Internal  Revenue  Code) as the  Company,  any
corporation  described  in clause  (i)  above,  or any  partnership  or trade or
business described in clause (ii) above.

Event(s) of Default  shall have the meaning  provided  for in Section 10 of this
-------------------
Financing Agreement.

Fiscal Quarter shall mean,  with respect to the  Companies,  each period of each
--------------
Fiscal Year ending on the dates set forth on Schedule 4.

Fiscal  Year shall mean the 52 or 53 week  period  ending on the last  Friday in
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June of each year.

GAAP shall mean generally accepted accounting principles in the United States of
----
America  as in  effect  from time to time and for the  period  as to which  such
accounting  principles  are to apply,  provided  that in the event the Companies
modify their  accounting  principles and procedures as applied as of the Closing
Date, the Companies shall provide such statements of  reconciliation as shall be
in form and substance acceptable to CIT.

General  Intangibles  shall  mean  all of each  of the  Companies'  present  and
--------------------
hereafter  acquired  general  intangibles  (as  defined  in the UCC),  and shall
include, without limitation, all present and future right, title and interest in
and to: (a) all Trademarks,  tradenames,  corporate names, business names, logos
and any other designs or sources of business identities,  (b) Patents,  together
with any improvements on said Patents,  utility models,  industrial  models, and
designs,  (c)  Copyrights,   (d)  trade  secrets,  (e)  licenses,   permits  and
franchises,  (f) all applications with respect to the foregoing,  (g) all right,
title and interest in and to any and all extensions  and renewals,  (h) goodwill
with  respect  to  any  of  the  foregoing,  (i)  any  other  forms  of  similar
intellectual property, (j) all customer lists,  distribution agreements,  supply
agreements,  blue prints,  indemnification rights and tax refunds, together with
all monies and claims for monies now or hereafter  due and payable in connection

<PAGE>

with any of the  foregoing  or  otherwise,  and all cash and  non-cash  proceeds
thereof,  including,  without  limitation,  the  proceeds  or  royalties  of any
licensing  agreements between any Company and any licensee of any such Company's
General  Intangibles.  The term "General  Intangibles"  shall  include,  without
limitation,  the tax refund  currently  owing to the Companies from the Internal
Revenue Service.

Indebtedness shall mean,  without  duplication,  all liabilities,  contingent or
------------
otherwise,  which  are any of the  following:  (a)  obligations  in  respect  of
borrowed  money or for the  deferred  purchase  price of  property,  services or
assets, other than Inventory, or (b) lease obligations which, in accordance with
GAAP, have been, or which should be capitalized.

Insurance  Proceeds  shall mean proceeds or payments  from an insurance  carrier
-------------------
with respect to any loss, casualty or damage to Collateral.

Internal  Revenue Code shall mean the Internal  Revenue Code of 1986, as amended
----------------------
from  time to  time,  and any  successor  statute  thereto  and  all  rules  and
regulations promulgated thereunder.

Inventory  shall  mean  all of  each of the  Companies'  present  and  hereafter
---------
acquired  inventory (as defined in the UCC) and including,  without  limitation,
all  merchandise,  inventory and goods,  and all  additions,  substitutions  and
replacements  thereof,  wherever located,  together with all goods and materials
used or usable in manufacturing,  processing,  packaging or shipping same in all
stages of production  from raw  materials  through  work-in-process  to finished
goods and all proceeds thereof of whatever sort.

Investment  Property shall mean all now owned and hereafter acquired  investment
--------------------
property (as defined in the UCC) and all proceeds thereof.

Issuing Bank shall mean the bank issuing Letters of Credit for the Companies.
------------

Letters of Credit  shall mean all  standby  letters  of credit  issued  with the
-----------------
assistance of CIT in accordance with Section 5 hereof by the Issuing Bank for or
on behalf of a Company.

Letter  of Credit  Guaranty  shall  mean the  guaranty  delivered  by CIT to the
---------------------------
Issuing Bank of any Company's reimbursement obligations under the Issuing Bank's
reimbursement  agreement,  application  for  Letter  of  Credit  or  other  like
document.

Letter of Credit  Guaranty  Fee shall mean the fee CIT may charge the  Companies
-------------------------------
under  Paragraph 8.3 of Section 8 of this Financing  Agreement for: a) issuing a
Letter of Credit Guaranty,  and/or b) otherwise aiding the Companies, or any one
of them, in obtaining Letters of Credit, all pursuant to Section 5 hereof.

Letter  of Credit  Sub-Line  shall  mean the  commitment  of CIT to  assist  the
---------------------------
Companies in obtaining  Letters of Credit,  pursuant to Section 5 hereof,  in an
aggregate amount of $6,000,000.00.
<PAGE>

LIBOR shall mean for any month, a rate of interest equal to the applicable LIBOR
-----
rate for one month interests  periods quoted to CIT by JP Morgan/Chase  Bank (or
any  successor  thereof)  two (2) Business  Days prior to the  beginning of such
month.

LIBOR Based Rate shall have the meaning  given to such term in Paragraph  8.1 of
----------------
Section 8 of this Financing Agreement.

Life  Insurance  Policies shall mean the life  insurance  policies  collaterally
-------------------------
assigned to CIT from time to time.

Line of Credit shall mean the aggregate  commitment of CIT to (a) make Revolving
--------------
Loans  pursuant to Section 3 of this  Financing  Agreement and (b) assist any of
the  Companies  in  opening  Letters  of Credit  pursuant  to  Section 5 of this
Financing Agreement, in the aggregate amount equal to $20,000,000.00.

Line of Credit Fee shall:  (a) mean the fee due CIT at the end of each month for
------------------
the Line of Credit,  and (b) be determined by multiplying the difference between
(i) the  Revolving  Line of Credit and (ii) the sum, for said month,  of (x) the
average daily  balance of Revolving  Loans plus (y) the average daily balance of
Letters of Credit outstanding for said month, by 0.375% per annum for the number
of days in said month.

Loan Documents shall mean this Financing Agreement,  Mortgages,  the assignments
--------------
of the  Life  Insurance  Policies,  the  Pledge  Agreement,  the  other  closing
documents and any other  ancillary  loan and security  agreements  executed from
time to time in connection with this Financing Agreement, all as may be renewed,
amended, extended, increased or supplemented from time to time.

Loan  Facility  Fee shall mean the fee payable to CIT in  accordance  with,  and
-------------------
pursuant  to, the  provisions  of Paragraph  8.7 of Section 8 of this  Financing
Agreement.

Material  Adverse  Effect  shall mean,  relative to any  occurrence  of whatever
-------------------------
nature  (including any adverse  determination in any litigation,  arbitration or
governmental investigation or proceeding),  (a) a material adverse effect on the
financial condition,  business,  operations,  prospects or assets of C-COR on an
individual  basis or all of the  Companies  taken as a whole,  or (b) a material
impairment  of  the  ability  of  C-COR  on an  individual  basis  or all of the
Companies  taken as a whole to perform  obligations  under the Loan Documents or
(c) an impairment of the validity or  enforceability of any Loan Document in any
manner which  materially  affects any material rights and/or  material  benefits
intended to be bestowed on CIT under the Loan Documents.

Mortgages shall have the meaning given to such term in Section 7.16(a).
---------

Obligations  shall mean all loans,  advances and extensions of credit made or to
-----------
be made  by CIT to the  Companies,  or any one of  them,  or to  others  for the
Companies'  account  (including,  without  limitation,  all Revolving  Loans and

<PAGE>

Letter of Credit Guaranties); any and all indebtedness and obligations which may
at any time be  owing by the  Companies,  or any one of them,  to CIT  howsoever
arising,  whether now in existence or incurred by the  Companies,  or any one of
them, from time to time hereafter;  whether  principal,  interest,  fees, costs,
expenses or otherwise; whether secured by pledge, lien upon or security interest
in any of the  Companies'  Collateral,  assets  or  property  or the  assets  or
property  of any  other  person,  firm,  entity  or  corporation;  whether  such
indebtedness is absolute or contingent,  joint or several, matured or unmatured,
direct or indirect and whether the Companies,  or any one of them, are liable to
CIT  for  such  indebtedness  as  principal,   surety,  endorser,  guarantor  or
otherwise.  Obligations  shall  also  include  indebtedness  owing to CIT by the
Companies,  or any one of them,  under  any Loan  Document  or under  any  other
agreement or arrangement now or hereafter entered into between the Companies and
CIT;  indebtedness or obligations incurred by, or imposed on, CIT as a result of
environmental claims arising out of any of the Companies'  operations,  premises
or waste  disposal  practices or sites in accordance  with paragraph 7.7 hereof;
the Companies'  liability to CIT as maker or endorser of any promissory  note or
other instrument for the payment of money; any of the Company's liability to CIT
under any  instrument of guaranty or  indemnity,  or arising under any guaranty,
endorsement  or  undertaking  which  CIT may  make or issue  to  others  for the
Companies'   account,   including  any  Letter  of  Credit   Guaranty  or  other
accommodation  extended  by CIT with  respect  to  applications  for  Letters of
Credit,  CIT's  acceptance  of  drafts  or CIT's  endorsement  of notes or other
instruments for the Companies' account and benefit.

Other  Collateral  shall  mean  all of  each of the  Companies'  now  owned  and
-----------------
hereafter  acquired  lockbox,  blocked  account and any other  deposit  accounts
maintained  with any bank or financial  institutions  into which the proceeds of
Collateral  are or  may  be  deposited;  all  other  deposit  accounts  and  all
Investment Property; all cash and other monies and property in the possession or
control  of CIT;  all books,  records,  ledger  cards,  disks and  related  data
processing software at any time evidencing or containing information relating to
any of the Collateral  described herein or otherwise necessary or helpful in the
collection thereof or realization thereon; and all cash and non-cash proceeds of
the foregoing.

Out-of-Pocket  Expenses  shall mean all of CIT's  present  and  future  expenses
-----------------------
incurred  relative  to this  Financing  Agreement  or any other Loan  Documents,
whether incurred heretofore or hereafter,  which expenses shall include, without
being limited to: the cost of record searches,  all costs and expenses  incurred
by CIT in opening bank accounts,  depositing checks,  receiving and transferring
funds,  and wire transfer  charges,  any charges  imposed on CIT due to returned
items and  "insufficient  funds" of  deposited  checks and CIT's  standard  fees
relating  thereto,  any amounts  paid by,  incurred by or charged to, CIT by the
Issuing  Bank under a Letter of Credit  Guaranty  or a  Company's  reimbursement
agreement,  application  for  Letters  of Credit or other  like  document  which
pertain  either  directly or  indirectly  to such  Letters of Credit,  and CIT's
standard  fees  relating  to the  Letters of Credit  and any drafts  thereunder,
travel,  lodging and similar  expenses of CIT's  personnel  in  connection  with
inspecting  and  monitoring  the  Collateral  from time to time  hereunder,  any
applicable reasonable counsel fees and disbursements, fees and taxes relative to
the filing of financing  statements,  all expenses,  costs and fees set forth in

<PAGE>

Paragraph 10.3 of Section 10 of this Financing  Agreement,  and title  insurance
premiums,   real  estate  survey   costs,   costs  of  preparing  and  recording
mortgages/deeds of trust against the Real Estate.

Overadvance  Rate shall mean a rate equal to one-half of one percent  (1/2%) per
-----------------
annum in  excess of the  applicable  contract  rate of  interest  determined  in
accordance with Section 8, Paragraph 8.1(a) of this Financing Agreement.

Overadvances  shall  mean the  amount  by which  (a) the sum of all  outstanding
------------
Revolving  Loans,  Letters of Credit and advances made hereunder  exceed (b) the
Borrowing Base.

Patents shall mean all of each of the Companies'  present and hereafter acquired
-------
patents, patent applications,  registrations,  any reissues or renewals thereof,
licenses,  any inventions and improvements  claimed thereunder,  and all general
intangible,  intellectual property and patent rights with respect thereto of the
Companies  or any one of them,  and all  income,  royalties,  cash and  non-cash
proceeds thereof.

Permitted  Encumbrances  shall  mean:  (a) liens  existing on the date hereof on
-----------------------
specific items of Equipment and other liens expressly permitted, or consented to
in  writing  by CIT;  (b)  Purchase  Money  Liens;  (c)  liens of local or state
authorities  for  franchise  or other like Taxes,  provided  that the  aggregate
amounts of such liens shall not exceed  $100,000.00  in the aggregate at any one
time;  (d)  statutory  liens of landlords  and liens of carriers,  warehousemen,
bailees, mechanics,  materialmen and other like liens imposed by law, created in
the ordinary  course of business and for amounts not yet due (or which are being
contested in good faith, by appropriate proceedings or other appropriate actions
which are  sufficient to prevent  imminent  foreclosure  of such liens) and with
respect to which  adequate  reserves or other  appropriate  provisions are being
maintained by the Companies in accordance  with GAAP; (e) deposits made (and the
liens thereon) in the ordinary  course of business of the Companies  (including,
without limitation,  security deposits for leases,  performance bonds, indemnity
bonds, surety bonds and appeal bonds) in connection with workers'  compensation,
unemployment  insurance and other types of social security benefits or to secure
the  performance of tenders,  bids,  contracts  (other than for the repayment or
guarantee  of  borrowed   money  or  purchase  money   obligations),   statutory
obligations  and other  similar  obligations  arising  as a result  of  progress
payments  under  government  contracts;   (f)  easements   (including,   without
limitation,    reciprocal   easement   agreements   and   utility   agreements),
encroachments,  minor defects or  irregularities  in title,  variation and other
restrictions,  charges or encumbrances  (whether or not recorded)  affecting the
Real Estate,  if  applicable,  and which in the aggregate (A) do not  materially
interfere with the occupation, use or enjoyment by any of the Companies of their
business  or the  property  so  encumbered  and (B) in the  reasonable  business
judgment of CIT do not  materially  and adversely  affect the value of such Real
Estate;  (g) liens granted CIT by the Companies or any one of them; (h) liens of
judgment creditors  provided such liens do not exceed, in the aggregate,  at any
time,  $50,000.00  (other  than  liens  bonded  or  insured  to  the  reasonable
satisfaction  of CIT);  (i) tax liens which are not yet due and payable or which
are being  diligently  contested in good faith by the  Companies by  appropriate
proceedings,  and which liens are not (x) filed on any public records, (y) other
than with  respect to Real  Estate,  senior to the liens of CIT or (z) for Taxes

<PAGE>

due the United States of America or any state thereof  having  similar  priority
statutes,  as further set forth in paragraph 7.6 hereof;  (j) a lien on the real
property of C-COR located in Tipton,  Pennsylvania  securing indebtedness to the
Pennsylvania  Industrial  Development  Authority with an  outstanding  principal
balance of  $138,199.00 as of the Closing Date; (k) a lien on the real estate of
C-COR  located  in State  College,  Pennsylvania  securing  indebtedness  to the
Pennsylvania  Industrial  Development  Authority with an  outstanding  principal
balance  of  $1,124,063.00  as of the  Closing  Date;  and  (l)  liens  on  cash
collateral  in the amount of  $3,015,000.00  granted to the  Existing  Lender to
secure letters of credit which have been issued by the Existing Lender and which
are outstanding on the Closing Date.

Permitted  Indebtedness  shall mean: (a) current  Indebtedness  maturing in less
-----------------------
than one year and incurred in the ordinary course of business for raw materials,
supplies,  equipment,  services, Taxes or labor; (b) the Indebtedness secured by
Purchase Money Liens; (c) Subordinated Debt; (d) Indebtedness  arising under the
Letters of Credit and this  Financing  Agreement;  (e) deferred  Taxes and other
expenses incurred in the ordinary course of business; and (f) other Indebtedness
existing on the date of execution of this Financing  Agreement and listed in the
most recent financial  statement  delivered to CIT or otherwise disclosed to CIT
in writing prior to the Closing Date.

Pledge Agreement shall have the meaning given to such term in Section 2.1(k).
----------------

Pledged  Stock shall mean 65% of the issued and  outstanding  capital stock of C
--------------
COR de Mexico, S.A. de C.V.

Purchase Money Liens shall mean liens (including  capital leases) on any item of
--------------------
Equipment acquired after the date of this Financing  Agreement provided that (a)
each  such  lien  shall  attach  only  to the  property  to be  acquired,  (b) a
description  of the  Equipment so acquired is furnished to CIT, and (c) the debt
incurred  in  connection  with  such  acquisitions  shall  not  exceed,  in  the
aggregate, $2,000,000.00 in any Fiscal Year.

Real Estate shall mean each of the Company's fee and/or  leasehold  interests in
-----------
the real property,  including any such real property which has been, or will be,
encumbered, mortgaged, pledged or assigned to CIT or its designee.

Revolving  Line of Credit  shall mean the  aggregate  commitment  of CIT to make
-------------------------
loans and advances  pursuant to Section 3 of this Financing  Agreement and issue
Letters of Credit Guaranties  pursuant to Section 5 hereof to the Companies,  in
the aggregate amount of $20,000,000.00.

Revolving Loan Account shall mean the accounts on CIT's books, in each Company's
----------------------
name,  in which each  Company will be charged  with all  applicable  Obligations
under this Financing Agreement.

Revolving Loans shall mean the loans and advances made, from time to time, to or
---------------
for the account of each of the  Companies  by CIT  pursuant to Section 3 of this
Financing Agreement.
<PAGE>

Subordinated  Debt shall  mean the debt due a  Subordinating  Creditor  (and the
------------------
note(s)  evidencing  such)  which  has  been  subordinated,  by a  Subordination
Agreement,  to the prior  payment and  satisfaction  of the  Obligations  of the
Companies to CIT.

Subordinating  Creditor shall mean any party hereafter executing a Subordination
-----------------------
Agreement.

Subordination  Agreement  shall  mean  the  agreement  (in  form  and  substance
------------------------
satisfactory  to CIT) among the  Companies,  a  Subordinating  Creditor  and CIT
pursuant to which  Subordinated  Debt is  subordinated  to the prior payment and
satisfaction of the Companies' Obligations to CIT.

Taxes shall mean all federal,  state,  municipal and other  governmental  taxes,
-----
levies, charges, claims and assessments which are or may be due by the Companies
with respect to their business, operations, Collateral or otherwise.

Total Assets shall mean total assets  determined in  accordance  with GAAP, on a
------------
basis consistent with the latest audited financial statements of the Companies.

Total  Liabilities  shall mean total  liabilities  determined in accordance with
------------------
GAAP, on a basis consistent with the latest audited financial  statements of the
Companies.

Trade  Accounts  Receivable  shall mean that  portion of each of the  Companies'
---------------------------
Accounts which arises from the sale of Inventory or the rendition of services in
the ordinary course of the Companies' business.

Trademarks  shall  mean  all of each of the  Companies'  present  and  hereafter
----------
acquired  trademarks,   trademark   registrations,   recordings,   applications,
tradenames,  trade styles, service marks, prints and labels (on which any of the
foregoing may appear), licenses,  reissues, renewals, and any other intellectual
property and trademark rights pertaining to any of the foregoing,  together with
the goodwill associated therewith, and all cash and non-cash proceeds thereof.

UCC shall mean the  Uniform  Commercial  Code as the same may be amended  and in
---
effect from time to time in the state of North Carolina.

Working Capital shall mean Current Assets in excess of Current Liabilities.
---------------
<PAGE>

SECTION 2.             Conditions Precedent.
                       --------------------

         2.1      Conditions to Initial Loans
                  ---------------------------
         The obligation of CIT to make the initial loans hereunder is subject to
the  satisfaction  of, extension of or waiver in writing of, on or prior to, the
Closing Date, the following conditions precedent:

         (a) Lien Searches - CIT shall have  received tax,  judgment and Uniform
             -------------
Commercial  Code  searches  satisfactory  to CIT  for  all  locations  presently
occupied or used by each of the Companies.

         (b) Casualty  Insurance - Each of the Companies shall have delivered to
             -------------------
CIT evidence satisfactory to CIT that casualty insurance policies listing CIT as
additional  insured,  loss payee or  mortgagee,  as the case may be, are in full
force  and  effect,  all as set  forth in  Paragraph  7.5 of  Section  7 of this
Financing Agreement.

         (c) UCC  Filings - Any  financing  statements  required  to be filed in
             ------------
order to create,  in favor of CIT, a first  perfected  security  interest in the
Collateral, subject only to the Permitted Encumbrances, shall have been properly
filed in each office in each  jurisdiction  required in order to create in favor
of  CIT  a  perfected   lien  on  the   Collateral.   CIT  shall  have  received
acknowledgment  copies of all such filings (or, in lieu thereof,  CIT shall have
received  other  evidence  satisfactory  to CIT that all such  filings have been
made) and CIT shall have received  evidence  that all necessary  filing fees and
all taxes or other expenses related to such filings have been paid in full.

         (d)  Board  Resolution  -  CIT  shall  have  received  a  copy  of  the
              -----------------
resolutions of the Board of Directors of each of the Companies  authorizing  the
execution, delivery and performance of (i) this Financing Agreement and (ii) any
related  agreements,  in each  case  certified  by the  Secretary  or  Assistant
Secretary  of each of the  Companies  as of the  date  hereof,  together  with a
certificate of the Secretary or Assistant  Secretary of the Companies and the as
to the  incumbency  and  signature  of the  officers  of each  of the  Companies
executing  such Loan  Documents  and any  certificate  or other  documents to be
delivered by them pursuant  hereto,  together with evidence of the incumbency of
such Secretary or Assistant Secretary.

         (e) Corporate  Organization - CIT shall have received (i) a copy of the
             -----------------------
Certificate of Incorporation of each of the Companies certified by the Secretary
of State of the states of their incorporation, and (ii) a copy of the By-Laws of
each  of the  Companies  certified  by the  respective  Secretary  or  Assistant
Secretary thereof, all as amended through the date hereof (or in the case of any
Company being a limited liability company,  appropriate organizational documents
including certificates of formation and operating agreements with certifications
satisfactory to CIT).
<PAGE>

         (f)  Officer's  Certificate  - CIT  shall  have  received  an  executed
              ----------------------
Officer's  Certificate  of  each of the  Companies,  satisfactory  in  form  and
substance  to CIT,  certifying  that  (i)  the  representations  and  warranties
contained herein are true and correct in all material  respects on and as of the
Closing Date;  (ii) each of the Companies is in compliance with all of the terms
and  provisions  set forth herein;  and (iii) no Default or Event of Default has
occurred

         (g) Opinions - Counsel for the  Companies  shall have  delivered to CIT
             --------
opinions  satisfactory  to CIT  opining,  inter alia,  that,  subject to the (i)
filing,  priority and remedies  provisions of the Uniform  Commercial Code, (ii)
the provisions of the Bankruptcy Code,  insolvency  statutes or other like laws,
(iii) the equity  powers of a court of law and (iv) such other matters as may be
agreed upon with CIT: (x) this Financing  Agreement and all other Loan Documents
of each of the Companies  are (A) valid,  binding and  enforceable  according to
their terms,  (B) are duly  authorized,  executed and delivered,  and (C) do not
violate any terms,  provisions,  representations  or covenants in the charter or
by-laws of each of the Companies or, to the best  knowledge of such counsel,  of
any loan agreement, mortgage, deed of trust, note, security or pledge agreement,
indenture  or other  contract  to  which  the  Companies  or any one of them are
signatories  or by which the  Companies  or any one of them or their  assets are
bound.

         (h)  Absence of  Default - No  Default  or Event of Default  shall have
              -------------------
occurred and no material  adverse  change shall have  occurred in the  financial
condition,  business,  prospects, profits, operations or assets of the Companies
or any one of them or any of the Companies' subsidiaries.

         (i) Legal  Restraints/Litigation  - As of the Closing Date, there shall
             ----------------------------
be no (x) litigation,  investigation or proceeding  (judicial or administrative)
pending or threatened  against the Companies or any one of them or their assets,
by any agency,  division or  department  of any county,  city,  state or federal
government  arising out of this Financing  Agreement;  (y)  injunction,  writ or
restraining  order   restraining  or  prohibiting  the  financing   arrangements
contemplated under this Financing Agreement; or (z) suit, action,  investigation
or proceeding (judicial or administrative)  pending against the Companies or any
one of them or  their  assets,  which,  in the  opinion  of  CIT,  if  adversely
determined,  could have a material  adverse  effect on the business,  operation,
assets, financial condition or Collateral of the Companies or any one of them.

         (j) Cash Budget  Projections  - CIT shall have  received,  reviewed and
             ------------------------
been satisfied with a twelve (12) month cash budget projection  prepared by each
of the Companies.

         (k) Pledge  Agreement  C-COR  shall (i)  execute  and  deliver to CIT a
             -----------------
pledge and  security  agreement  (the  "Pledge  Agreement")  pledging  to CIT as
additional  collateral for the Obligations of the Companies not less than 65% of
the issued and  outstanding  stock of C COR de Mexico,  S.A. de C.V.  and,  (ii)

<PAGE>

deliver to CIT the stock  certificates  evidencing such stock together with duly
executed stock powers (undated and in-blank) with respect  thereto,  all in form
and substance satisfactory to CIT.

         (l)  Additional  Documents - Each of the Companies  shall have executed
              ---------------------
and  delivered to CIT all Loan  Documents  necessary to  consummate  the lending
arrangement contemplated between the Companies and CIT.

         (m) Disbursement  Authorization - The Companies shall have delivered to
             ---------------------------
CIT all  information  necessary for CIT to issue wire transfer  instructions  on
behalf of each of the  Companies  for the initial and  subsequent  loans  and/or
advances to be made under this Financing  Agreement  including,  but not limited
to, disbursement authorizations in form acceptable to CIT.

         (n)  Examination  &  Verification  - CIT shall have  completed,  to its
              ----------------------------
satisfaction,  an  examination  and  verification  of the  Accounts,  Inventory,
financial  statements,  books  and  records  of  each  of  the  Companies  which
examination  shall  indicate that,  after giving effect to all Revolving  Loans,
advances and  extensions of credit to be made at closing,  the  Companies  shall
have an aggregate opening liquidity (i.e. cash equivalents plus Availability) of
at least $20,000,000.00,  as evidenced by a Borrowing Base certificate delivered
by the  Companies  to CIT as of the Closing  Date.  It is  understood  that such
requirement  contemplates  that all debts and obligations are current,  and that
all payables are being handled in the normal course of the  Companies'  business
and consistent with their past practice.

         (o) Depository  Accounts - Each of the Companies shall have established
             --------------------
a system of lockbox and bank accounts with respect to the collection of Accounts
and the deposit of proceeds of  Collateral  as shall be acceptable to CIT in all
respects.  Such accounts shall be subject to three party agreements (between the
Companies,  CIT and the depository  bank),  which shall be in form and substance
satisfactory to CIT.

         (p)  Existing  Revolving  Credit  Agreement - The  Companies'  existing
              --------------------------------------
credit  agreement with Citizens Bank of  Pennsylvania  (the  "Existing  Lender")
shall  be:  (i)  terminated;  (ii) all loans and  obligations  of the  Companies
thereunder shall be paid or satisfied in full,  including through utilization of
the  proceeds of the  initial  Revolving  Loans to be made under this  Financing
Agreement;  and (iii) all liens or security  interests  in favor of the Existing
Lender  on the  Collateral  and  otherwise  in  connection  therewith  shall  be
terminated and/or released upon such payment. Notwithstanding the foregoing, CIT
will permit existing  letters of credit issued by the Existing Lender to stay in
place  after the  Closing  Date and will  permit  such  letters  of credit to be
secured by cash collateral provided that the obligations of the Companies to the
Existing  Lender with respect to such letters of credit are secured only by such
cash collateral.

         (q) Environmental Report - CIT shall have received  environmental audit
             --------------------
reports on i) all of each of the Companies' leasehold and fee interests, and ii)
the Companies' waste disposal practices.  The reports must x) be satisfactory to

<PAGE>

CIT and y) not disclose or indicate any material  liability  (real or potential)
stemming from the Companies'  premises,  their operations,  their waste disposal
practices or waste disposal sites used by Companies.

         (r)  Schedules - The  Companies or their counsel shall provide CIT with
              ---------
schedules of: (a) any of the Companies' (i) Trademarks,  (ii) Patents, and (iii)
Copyrights,  as  applicable  and all in such  detail as to  provide  appropriate
recording  information  with respect  thereto,  (b) any tradenames,  (c) monthly
rental  payments  for any  leased  premises  or any  other  premises  where  any
Collateral may be stored or processed,  and (d) Permitted  Encumbrances,  all of
the foregoing in form and substance satisfactory to CIT.

         (s) Life Insurance  Assignments - CIT shall have received  satisfactory
             ---------------------------
assignments of the life insurance described on Schedule 3 attached hereto.

Upon the execution of this Financing  Agreement and the initial  disbursement of
loans hereunder,  all of the above  Conditions  Precedent shall have been deemed
satisfied except as otherwise set forth  hereinabove or as the Companies and CIT
shall otherwise agree in writing.

         2.2      Conditions to Each Extension of Credit
                  --------------------------------------
         Except to the extent  expressly set forth in this Financing  Agreement,
the agreement of CIT to make any extension of credit  requested to be made by it
to any of the Companies on any date (including without  limitation,  the initial
extension of credit) is subject to the satisfaction of the following  conditions
precedent:

         a)  Representations  and Warranties - Each of the  representations  and
             -------------------------------
warranties  made by each  of the  Companies  in or  pursuant  to this  Financing
Agreement  shall be true and correct in all material  respects on and as of such
date as if made on and as of such date.

         b) No Default - No Default or Event of Default  shall have occurred and
            ----------
be  continuing  on such date or after giving  effect to the  extension of credit
requested to be made on such date.

         c) Borrowing  Base - Except as may be otherwise  agreed to from time to
            ---------------
time by CIT and the  Companies in writing,  after giving effect to the extension
of credit  requested  to be made by the  Companies on such date,  the  aggregate
outstanding  balance of the Revolving  Loans and  outstanding  Letters of Credit
owing by the Companies  will not exceed the lesser of (i) the Revolving  Line of
Credit or (ii) the Borrowing Base.

Each borrowing by a Company  hereunder  shall  constitute a  representation  and
warranty by the  Companies  as of the date of such loan or advance  that each of
the  representations,  warranties  and  covenants  contained  in  the  Financing
Agreement have been satisfied and are true and correct,  except as the Companies
and CIT shall otherwise agree herein or in a separate writing.
<PAGE>

SECTION 3.             Revolving Loans.
                       ---------------
         3.1 CIT agrees,  subject to the terms and  conditions of this Financing
Agreement,  from time to time, and within (x)  Availability  and (y) the Line of
Credit (but  subject to CIT's right to make  "Overadvances"),  to make loans and
advances to the Companies on a revolving basis (i.e.  subject to the limitations
set forth  herein,  the  Companies  may borrow,  repay and  re-borrow  Revolving
Loans).  Such loans and advances shall be in amounts not to exceed the Borrowing
Base.  All requests for loans and advances must be received by an officer of CIT
no later than 1:00 p.m.,  New York time,  of the  Business Day on which any such
loans and advances are  required.  Should CIT for any reason honor  requests for
Overadvances,  any such Overadvances  shall be made in CIT's sole discretion and
subject to any additional terms CIT deems necessary.

         3.2 In furtherance of the continuing  assignment and security  interest
in each of the Companies'  Accounts and Inventory,  each of the Companies  will,
upon the creation of Accounts and purchase or acquisition of Inventory,  execute
and deliver to CIT in such form and manner as CIT may reasonably require, solely
for CIT's  convenience in maintaining  records of Collateral,  such confirmatory
schedules of Accounts and Inventory as CIT may  reasonably  request,  including,
without  limitation,  weekly  schedules  of Accounts  and monthly  schedules  of
Inventory,  all in form  and  substance  satisfactory  to CIT,  and  such  other
appropriate  reports  designating,  identifying  and describing the Accounts and
Inventory  as CIT may  reasonably  request,  and  provided  further that CIT may
request  any such  information  more  frequently,  from  time to time,  upon its
reasonable prior request. In addition, upon CIT's request, each of the Companies
shall provide CIT with copies of agreements  with, or purchase orders from, such
Companies' customers, and copies of invoices to customers,  proof of shipment or
delivery,  access to their  computers,  electronic  media and software  programs
associated   therewith   (including  any  electronic   records,   contracts  and
signatures)  and such  other  documentation  and  information  relating  to said
Accounts and other Collateral as CIT may reasonably require.  Failure to provide
CIT with  any of the  foregoing  shall in no way  affect,  diminish,  modify  or
otherwise limit the security  interests  granted  herein.  Each of the Companies
hereby  authorizes  CIT to regard the  Companies'  printed  name or rubber stamp
signature  on  assignment  schedules or invoices as the  equivalent  of a manual
signature by one of the Companies' authorized officers or agents.

         3.3 Each of the Companies  hereby  represents and warrants  that:  each
Trade  Account  Receivable is based on an actual and bona fide sale and delivery
of Inventory or rendition of services to customers, made by the Companies in the
ordinary  course of their  business;  the  Inventory  being sold,  and the Trade
Accounts Receivable created, are the exclusive property of the Companies and are
not and shall not be subject to any lien, consignment arrangement,  encumbrance,
security interest or financing  statement  whatsoever,  other than the Permitted
Encumbrances;  the invoices evidencing such Trade Accounts Receivable are in the
name of the Companies;  and the Companies' customers have accepted the Inventory
or  services,  owe and are  obligated  to pay the  full  amounts  stated  in the
invoices   according  to  their  terms,   without  dispute,   offset,   defense,
counterclaim  or contra,  except for disputes and other  matters  arising in the

<PAGE>

ordinary  course of business with respect to which the  Companies  have complied
with the  notification  requirements  of  Paragraph  3.5 of this  Section 3. The
Companies  confirm  to CIT that  any and all  Taxes  or fees  relating  to their
business,  their sales, the Accounts or Inventory  relating  thereto,  are their
sole  responsibility  and that  same  will be paid by the  Companies  when  due,
subject to Paragraph 7.6 of Section 7 of this Financing Agreement, and that none
of said Taxes or fees  represent a lien on or claim  against the  Accounts.  The
Companies  hereby further  represent and warrant that they shall not acquire any
Inventory on a consignment  basis,  nor co-mingle  their  Inventory  with any of
their  customers or any other  person,  including  pursuant to any bill and hold
sale or otherwise,  and that their Inventory is marketable to their customers in
the ordinary  course of business of the  Companies,  except as it may  otherwise
report in writing to CIT  pursuant  to  Paragraph  3.5 hereof from time to time.
Each of the Companies  also warrant and represent that they are duly and validly
existing  corporations or limited  liability  companies and are qualified in all
states  where the  failure to so qualify  would have an adverse  effect on their
business or their ability to enforce  collection of Accounts due from  customers
residing in that state.  The Companies  agree to maintain such books and records
regarding Accounts and Inventory as CIT may reasonably require. All of the books
and records of the Companies will be available to CIT at normal  business hours,
including any records handled or maintained for the Companies or any one of them
by any other company or entity.

         3.4 (a) Until CIT has advised the  Companies to the contrary  after the
occurrence  of an Event of  Default,  the  Companies,  at  their  expense,  will
enforce,  collect and receive all amounts owing on their respective  Accounts in
the ordinary  course of their business and any proceeds they so receive shall be
subject to the terms  hereof,  and held on behalf of and in trust for CIT.  Such
privilege  shall  terminate at the election of CIT,  upon the  occurrence  of an
Event  of  Default.  Any  checks,  cash,  credit  card  sales,  notes  or  other
instruments  or property  received by a Company with respect to any  Collateral,
including  Accounts,  shall be held by such  Company in trust for CIT,  separate
from such  Company's  own or the  Companies'  property  and funds,  and promptly
turned over to CIT with proper  assignments  or  endorsements  by deposit to the
Depository  Accounts.  Each of the Companies shall: (i) indicate on all of their
invoices  that  funds  should be  delivered  to and  deposited  in a  Depository
Account;  (ii)  direct  all of their  account  debtors  to  deposit  any and all
proceeds of Collateral into the Depository Accounts; (iii) irrevocably authorize
and direct any banks which  maintain  the  Companies'  initial  receipt of cash,
checks and other  items to  promptly  wire  transfer  all  available  funds to a
Depository Account; and (iv) advise all such banks of CIT's security interest in
such funds. The Companies shall provide CIT with prior written notice of any and
all deposit  accounts  opened or to be opened  subsequent  to the Closing  Date.
Subject to Collection  Days, all amounts  received by CIT in payment of Accounts
will be credited to the  Revolving  Loan Account when CIT is advised by its bank
of its receipt of "collected  funds" at CIT's bank account in New York, New York
on the  Business Day of such advise if advised no later than 1:00 p.m. EST or on
the next  succeeding  Business  Day if so advised  after 1:00 PM EST. No checks,
drafts or other instrument received by CIT shall constitute final payment to CIT
unless and until such instruments have actually been collected.
<PAGE>

         (b) The Companies  shall  establish and maintain,  in their name and at
their expense, Depository Accounts with such banks as are acceptable to CIT (the
"Blocked  Accounts") into which each of the Companies shall promptly cause to be
deposited:  (i) all  proceeds of  Collateral  received by any of the  Companies,
including  all amounts  payable to the  Companies  from credit card  issuers and
credit card processors, and (ii) all amounts on deposit in deposit accounts used
by the  Companies  at  each of  their  locations,  all as  further  provided  in
Paragraph  3.4(a) above. The banks at which the Blocked Accounts are established
shall enter into an agreement,  in form and substance  satisfactory  to CIT (the
"Blocked  Account  Agreements"),  providing  that all  cash,  checks  and  items
received or deposited in the Blocked  Accounts are the property of CIT, that the
depository  bank has no lien  upon,  or right of set off  against,  the  Blocked
Accounts and any cash, checks,  items, wires or other funds from time to time on
deposit therein, except as otherwise provided in the Blocked Account Agreements,
and that  automatically,  on a daily  basis the  depository  bank will wire,  or
otherwise  transfer,  in  immediately  available  funds,  all funds  received or
deposited into the Blocked Accounts to such bank account as CIT may from time to
time  designate  for  such  purpose;  provided,  however,  with  respect  to the
Depository  Account  maintained with Bank of America,  N.A., the Companies shall
have 30 days after the Closing Date to either terminate such Depository  Account
or obtain a Blocked  Account  Agreement with Bank of America,  N.A. with respect
thereto.  The Companies  hereby confirm and agree that all amounts  deposited in
such Blocked Accounts and any other funds received and collected by CIT, whether
as proceeds of Inventory or other Collateral or otherwise, shall be the property
of CIT.

         3.5 The Companies agree to notify CIT: (a) of any matters affecting the
value,  enforceability  or  collectibility  of any Account  and of all  customer
disputes,  offsets,  defenses,   counterclaims,   returns,  rejections  and  all
reclaimed or repossessed  merchandise or goods, and of any adverse effect in the
value of their  Inventory,  in their weekly and monthly  collateral  reports (as
applicable)  provided  to CIT  hereunder,  in such  detail and format as CIT may
reasonably require from time to time; and (b) promptly of any such matters which
(i) are material,  as a whole,  to the Accounts  and/or the  Inventory,  or (ii)
which  adversely  affect the value of any Account or  Inventory  in an amount of
$100,000 or more. The Companies agree to issue credit  memoranda  promptly (with
duplicates to CIT upon request after the occurrence of an Event of Default) upon
accepting  returns or granting  allowances.  Upon the  occurrence of an Event of
Default  (which is not  waived in writing  by CIT) and on notice  from CIT,  the
Companies agree that all returned, reclaimed or repossessed merchandise or goods
shall be set aside by the  Companies,  marked with CIT's name (as secured party)
and held by the Companies for CIT's account.

         3.6 (a)  Subject to (b) below,  CIT shall  maintain  a  Revolving  Loan
Account on its books in which  each of the  Companies  will be charged  with all
loans and advances  made by CIT to such  Company to it or for its  account,  and
with any other Obligations, including any and all costs, expenses and reasonable
attorney's  fees which CIT may incur in  connection  with the exercise by or for
CIT  of any of the  rights  or  powers  herein  conferred  upon  CIT,  or in the
prosecution  or defense of any action or  proceeding  to enforce or protect  any
rights  of CIT in  connection  with this  Financing  Agreement,  the other  Loan

<PAGE>

Documents or the Collateral assigned hereunder, or any Obligations owing by such
Company.  The Companies  will be credited with all amounts  received by CIT from
the Companies or from others for the Companies' account, including, as above set
forth, all amounts received by CIT in payment of Accounts, and such amounts will
be applied to payment of the Obligations as set forth herein.  In no event shall
prior recourse to any Accounts or other security  granted to or by the Companies
be a prerequisite to CIT's right to demand payment of any  Obligation.  Further,
it is understood that CIT shall have no obligation  whatsoever to perform in any
respect any of the Companies' contracts or obligations relating to the Accounts.

         (b)  In  order  to  utilize  the  collective  borrowing  powers  of the
Companies  (collectively  the "Collective  Borrowers") in the most efficient and
economical  manner,  and in order to facilitate  the handling of the accounts of
the  Collective   Borrowers  on  CIT's  books,  the  Collective  Borrowers  have
requested,  and CIT has agreed to handle accounts of the Collective Borrowers on
CIT's  books  on  a  combined  basis,  all  in  accordance  with  the  following
provisions:  (i) in lieu of maintaining  separate accounts on CIT's books in the
name of each of the Collective  Borrowers,  CIT shall maintain one account under
the name: C-COR.Net Corp. (herein the "Collective Account").  Loans and advances
made by CIT to any of the Collective Borrowers will be charged to the Collective
Account  indicated  above,  along  with any  charges  and  expenses  under  this
Financing Agreement.  The Collective Account will be credited,  with all amounts
received by CIT from any of the  Collective  Borrowers  or from others for their
account including all amounts received by CIT in payment of Accounts assigned to
CIT as provided in this Financing Agreement;  (ii) each month CIT will render to
the Collective  Borrowers one extract of the combined Collective Account,  which
shall be deemed to be an account stated as to each of the  Collective  Borrowers
and which will be deemed correct and accepted by all of the Collective Borrowers
unless CIT receives a written  statement of  exceptions  from them within thirty
(30)  days  after  such  extract  has  been  rendered  by CIT.  It is  expressly
understood and agreed by each of the Collective Borrowers that CIT shall have no
obligation  to account  separately  to any of the  Collective  Borrowers;  (iii)
requests for loans and advances may be made by C-COR as agent for the Collective
Borrowers and CIT is hereby authorized and directed to accept, honor and rely on
such  instructions  and requests,  subject to the  limitation and provisions set
forth in this Financing Agreement. It is expressly understood and agreed by each
of the  Collective  Borrowers that CIT shall have no  responsibility  to inquire
into the correctness of the apportionment, allocation, or disposition of (x) any
loans and advances made to any of the  Collective  Borrowers or (y) any of CIT's
expenses and charges relating  thereto.  All loans and advances are made for the
Collective  Account;   (iv)  the  Collective  Borrowers  jointly  and  severally
unconditionally guarantee to CIT the prompt payment in full of (A) all loans and
advances  made  and to be  made  by CIT to any  of  them  under  this  Financing
Agreement,  as well as (B) all other Obligations of the Collective  Borrowers to
CIT; (v) All Accounts assigned to CIT by any of the Collective Borrowers and any
other collateral security now or hereafter given to CIT by any of the Collective
Borrowers  (be it Accounts or  otherwise),  shall  secure all loans and advances
made by CIT to any of the  Collective  Borrowers,  and  shall  be  deemed  to be
pledged to CIT as security for any and all other  Obligations  of the Collective
Borrowers  to CIT as set  forth  under  this  Financing  Agreement  or any other
agreements  between  CIT  and  any  of  the  Collective  Borrowers;  (vi)  it is

<PAGE>

understood  that the handling of the accounts of the  Collective  Borrowers in a
combined  fashion,  as  more  fully  set  forth  herein,  is done  solely  as an
accommodation  to the Collective  Borrowers and at their  request,  and that CIT
shall incur no liability to the  Collective  Borrowers  as a result  hereof.  To
induce  CIT to do so,  and in  consideration  thereof,  each  of the  Collective
Borrowers  hereby agrees to indemnify CIT and hold CIT harmless  against any and
all liability,  expense,  loss or claim of damage or injury, made against CIT by
any of the Collective Borrowers or by any third party whosoever, arising from or
incurred  solely by reason of (1) the method of  handling  the  accounts  of the
Collective Borrowers as herein provided,  (2) CIT relying on any instructions of
any of the  Collective  Borrowers,  or (3)  any  other  action  taken  by CIT in
accordance  with this  subparagraph  (b) of  Paragraph  3.6 of Section 3 of this
Financing  Agreement;  and (vii) the  foregoing  request  was made  because  the
Collective  Borrowers  are  engaged in an  integrated  operation  that  requires
financing on a basis  permitting the availability of credit from time to time to
each of the  Collective  Borrowers  as  required  for the  continued  successful
operation of each of the Collective Borrowers.  Each of the Collective Borrowers
expects to derive benefit, directly or indirectly,  from such availability since
the successful operation of each of the Collective Borrowers is dependent on the
continued  successful  performance of the functions of the integrated  group. In
addition, the Companies have informed CIT that:

                  (A)  C-COR,   in  order  to  increase   the   efficiency   and
                  productivity of each of the other  Collective  Borrowers,  has
                  centralized in itself a cash management  system which entails,
                  in part, central  disbursement and operating accounts in which
                  it  provides  the working  capital  needs of each of the other
                  Collective  Borrowers and manages and timely pays the accounts
                  payable of each of the other Collective Borrowers;

                  (B) C-COR is further  enhancing the operating  efficiencies of
                  the other  Collective  Borrowers  by in certain  circumstances
                  purchasing,  or causing to be  purchased,  in its name for its
                  account  all  materials,   supplies,  inventory  and  services
                  required by the other Collective Borrower which will result in
                  reducing  the   operating   costs  of  the  other   Collective
                  Borrowers; and

                  (C) Since all of the  Collective  Borrowers are now engaged in
                  an  integrated   operation  that  requires   financing  on  an
                  integrated basis and since each Collective Borrower expects to
                  benefit  from the  continued  successful  performance  of such
                  integrated  operations  and  in  order  to  best  utilize  the
                  collective borrowing powers of each Collective Borrower in the
                  most effective and cost efficient  manner and to avoid adverse
                  effects  on the  operating  efficiencies  of  each  Collective
                  Borrower  and  the  existing  back-office   practices  of  the
                  Collective  Borrowers,  each Collective Borrower has requested

<PAGE>

                  that all Revolving Loans and advances be disbursed solely upon
                  the request of C-COR and to bank  accounts  managed  solely by
                  C-COR and that  C-COR  will  manage  for the  benefit  of each
                  Collective Borrower the expenditure and usage of such funds.

         3.7 After the end of each month,  CIT shall promptly send the Companies
a statement  showing the accounting for the charges,  loans,  advances and other
transactions  occurring between CIT and each of the Companies during that month.
The monthly  statements  shall be deemed  correct  and binding  upon each of the
Companies and shall  constitute an account  stated between the Companies and CIT
unless CIT receives a written  statement of the  exceptions  within  thirty (30)
days of the date of the monthly statement.

         3.8 In the event that any requested  advance  exceeds  Availability  or
that (a) the sum of (i) the  outstanding  balance  of  Revolving  Loans and (ii)
outstanding  balance of Letters of Credit  exceeds  (b)(x) the Borrowing Base or
(y) the Revolving Line of Credit,  any such  nonconsensual  Overadvance shall be
due and payable to CIT immediately upon CIT's demand therefor.

SECTION 4.             [Intentionally left blank].
                       --------------------------

SECTION 5.             Letters of Credit.
                       -----------------
         In order to assist the Companies,  or any one of them, in  establishing
or opening  Letters of Credit with an Issuing Bank, the Companies have requested
CIT to join in the  applications  for such Letters of Credit,  and/or  guarantee
payment or  performance  of such Letters of Credit and any drafts or acceptances
thereunder  through  the  issuance of the  Letters of Credit  Guaranty,  thereby
lending  CIT's  credit  to the  Companies  and CIT has  agreed  to do so.  These
arrangements  shall be handled by CIT  subject to the terms and  conditions  set
forth below.

         5.1 Within the  Revolving  Line of Credit and  Availability,  CIT shall
assist each of the  Companies in obtaining  Letter(s) of Credit in an amount not
to exceed  the  outstanding  amount of the  Letter  of  Credit  Sub-Line.  CIT's
assistance for amounts in excess of the limitation set forth herein shall at all
times and in all respects be in CIT's sole discretion. It is understood that the
term,  form and  purpose  of each  Letter of  Credit  and all  documentation  in
connection therewith,  and any amendments,  modifications or extensions thereof,
must be mutually acceptable to CIT, the Issuing Bank and the Companies, provided
that Letters of Credit shall not be used for the purchase of domestic  Inventory
or to secure present or future debt of domestic Inventory suppliers. Any and all
outstanding Letters of Credit issued hereunder for any Company shall be reserved
dollar for dollar from Availability as an Availability Reserve.

         5.2 CIT shall have the right,  without  notice to any of the Companies,
to charge a  Company's  Revolving  Loan  Account  with the amount of any and all
indebtedness,  liability  or  obligation  of any kind  incurred by CIT under the

<PAGE>

Letters of Credit Guaranty at the earlier of a) payment by CIT under the Letters
of Credit  Guaranty;  or b) the  occurrence  of an Event of Default.  Any amount
charged to the  Companies'  Revolving  Loan Accounts shall be deemed a Revolving
Loan hereunder and shall incur interest at the rate provided in Paragraph 8.1 of
Section 8 of this Financing Agreement.

         5.3 Each of the Companies unconditionally indemnifies CIT and holds CIT
harmless from any and all loss, claim or liability  incurred by CIT arising from
any  transactions  or occurrences  relating to Letters of Credit  established or
opened for any Company's account, the collateral relating thereto and any drafts
or acceptances thereunder,  and all Obligations  thereunder,  including any such
loss or claim due to any errors,  omissions,  negligence,  misconduct  or action
taken by any  Issuing  Bank,  other than for any such loss,  claim or  liability
arising  out of the gross  negligence  or  willful  misconduct  by CIT under the
Letters of Credit  Guaranty.  This indemnity  shall survive  termination of this
Financing  Agreement.  The Companies agree that any charges  incurred by CIT for
any of the Companies  account by the Issuing Bank shall be conclusive on CIT and
may be charged to such Company's Revolving Loan Account.

         5.4 CIT shall not be  responsible  for: (a) the  existence,  character,
quality, quantity, condition, packing, value or delivery of the goods purporting
to be  represented  by any  documents;  (b) any  difference  or variation in the
character, quality, quantity, condition, packing, value or delivery of the goods
from  that  expressed  in  the  documents;  (c)  the  validity,  sufficiency  or
genuineness  of any  documents  or of any  endorsements  thereon,  even  if such
documents  should  in  fact  prove  to  be  in  any  or  all  respects  invalid,
insufficient,  fraudulent  or forged;  (d) the time,  place,  manner or order in
which  shipment  is made;  (e)  partial or  incomplete  shipment,  or failure or
omission to ship any or all of the goods referred to in the Letters of Credit or
documents; (f) any deviation from instructions;  (g) delay, default, or fraud by
the shipper  and/or  anyone else in  connection  with the goods or the  shipping
thereof;  or (h) any breach of  contract  between the shipper or vendors and the
Companies.

         5.5 The Companies  agree that any action taken by CIT, if taken in good
faith, or any action taken by any Issuing Bank,  under or in connection with the
Letters of Credit, the Letter of Credit  Guarantees,  the drafts or acceptances,
or the  Collateral,  shall be  binding  on each of the  Companies  and shall not
result in any  liability  whatsoever  of CIT to the  Companies.  In  furtherance
thereof,  CIT shall have the full right and  authority to: (a) clear and resolve
any questions of  non-compliance  of documents;  (b) give any instructions as to
acceptance  or  rejection  of any  documents  or goods;  (c) execute any and all
steamship or airways  guaranties (and  applications  therefore),  indemnities or
delivery  orders;  (d) grant any  extensions of the maturity of, time of payment
for, or time of presentation of, any drafts,  acceptances, or documents; and (e)
agree  to  any  amendments,  renewals,  extensions,  modifications,  changes  or
cancellations  of any of the  terms or  conditions  of any of the  applications,
Letters of Credit,  drafts or  acceptances;  all in CIT's sole name. The Issuing
Bank shall be entitled to comply  with and honor any and all such  documents  or
instruments  executed by or received  solely from CIT, all without any notice to
or any consent from the Companies or any one of them.  Notwithstanding any prior
course of conduct or dealing with respect to the foregoing including  amendments

<PAGE>

and non-compliance with documents and/or any Company's instructions with respect
thereto,  CIT may  exercise  its  rights  hereunder  in its sole and  reasonable
business judgement.  In addition,  without CIT's express consent and endorsement
in writing, the Companies agree: (a) not to execute any and all applications for
steamship or airway  guaranties,  indemnities or delivery  orders;  to grant any
extensions of the maturity of, time of payment for, or time of presentation  of,
any drafts,  acceptances or documents; or to agree to any amendments,  renewals,
extensions,  modifications,  changes  or  cancellations  of any of the  terms or
conditions of any of the applications, Letters of Credit, drafts or acceptances;
and (b) after the  occurrence  of an Event of Default  which is not cured within
any  applicable  grace  period,  if any, or waived by CIT,  not to (i) clear and
resolve  any  questions  of  non-compliance  of  documents,  or  (ii)  give  any
instructions as to acceptances or rejection of any documents or goods.

         5.6 The Companies agree that: (a) any necessary import, export or other
licenses or certificates  for the import or handling of the Collateral will have
been  promptly  procured;  (b) all foreign and  domestic  governmental  laws and
regulations in regard to the shipment and importation of the Collateral,  or the
financing  thereof will have been promptly and fully  complied with; and (c) any
certificates  in that regard that CIT may at any time  request  will be promptly
furnished.  In connection herewith, the Companies warrant and represent that all
shipments made under any such Letters of Credit are in accordance  with the laws
and regulations of the countries in which the shipments originate and terminate,
and are not prohibited by any such laws and  regulations.  Each of the Companies
assumes  all risk,  liability  and  responsibility  for,  and  agrees to pay and
discharge,  all  present  and future  local,  state,  federal or foreign  Taxes,
duties, or levies. Any embargo, restriction, laws, customs or regulations of any
country, state, city, or other political subdivision, where the Collateral is or
may be located,  or wherein  payments are to be made,  or wherein  drafts may be
drawn,  negotiated,  accepted,  or paid,  shall be solely the  Companies'  risk,
liability and responsibility.

         5.7 Upon any  payments  made to the  Issuing  Bank  under the Letter of
Credit Guaranty, CIT shall acquire by subrogation,  any rights, remedies, duties
or obligations  granted or undertaken by the Companies or any one of them to the
Issuing Bank in any  application for Letters of Credit,  any standing  agreement
relating to Letters of Credit or otherwise, all of which shall be deemed to have
been granted to CIT and apply in all respects to CIT and shall be in addition to
any rights, remedies, duties or obligations contained herein.

SECTION 6.             Collateral.
                       ----------
         6.1 As security for the prompt payment in full of all Obligations, each
of the  Companies  hereby  pledges and grants to CIT a  continuing  general lien
upon, and security interest in, all of their:

         (a)  Accounts;

         (b)  Inventory;

         (c)  General Intangibles;
<PAGE>

         (d)  Documents of Title;

         (e)  Other Collateral;

         (f)  Equipment;

         (g)  Real Estate (subject to the terms of Section 7.16);

         (h)  Pledged Stock; and

         (i)  Life Insurance Policies.

         6.2 The security  interests  granted  hereunder shall extend and attach
to:

         (a) All  Collateral  which is owned by any of the Companies or in which
the  Companies  have any  interest,  whether held by the Companies or others for
their  account,  and, if any  Collateral  is Equipment,  whether the  Companies'
interest in such Equipment is as owner, finance lessee or conditional vendee;

         (b) All Equipment,  whether the same constitutes  personal  property or
fixtures,  including,  but without limiting the generality of the foregoing, all
dies, jigs, tools, benches, molds, tables,  accretions,  component parts thereof
and additions thereto, as well as all accessories, motors, engines and auxiliary
parts used in connection with, or attached to, the Equipment; and

         (c) All  Inventory  and any  portion  thereof  which  may be  returned,
rejected,  reclaimed  or  repossessed  by either CIT or the  Companies  from the
Companies' customers, as well as to all supplies, goods, incidentals,  packaging
materials,  labels and any other items which contribute to the finished goods or
products  manufactured or processed by the Companies,  or to the sale, promotion
or shipment thereof.

         6.3 The Companies  agree to  safeguard,  protect and hold all Inventory
for CIT's account and make no disposition  thereof except in the ordinary course
of their business of the Companies,  as herein provided. The Companies represent
and warrant that  Inventory  will be sold and shipped by the  Companies to their
customers only in the ordinary course of the Companies' business,  and then only
on open account and on terms  currently being extended by the Companies to their
respective  customers,  provided that,  absent the prior written consent of CIT,
the Companies  shall not sell Inventory on a consignment  basis.  Upon the sale,
exchange,  or other disposition of Inventory,  as herein provided,  the security
interest in the Inventory provided for herein shall, without break in continuity
and without further  formality or act, continue in, and attach to, all proceeds,
including any instruments for the payment of money,  Trade Accounts  Receivable,
documents of title,  shipping  documents,  chattel  paper and all other cash and
non-cash  proceeds of such sale,  exchange or disposition.  As to any such sale,

<PAGE>

exchange  or other  disposition,  CIT shall  have all of the rights of an unpaid
seller, including stoppage in transit, replevin, rescission and reclamation. The
Companies hereby agree to immediately forward any and all proceeds of Collateral
to the Depository  Account,  and to hold any such proceeds  (including any notes
and  instruments),  in trust for CIT pending  delivery to CIT.  Irrespective  of
CIT's perfection  status in any and all of the General  Intangibles,  including,
without  limitations,  any  Patents,  Trademarks,  Copyrights  or licenses  with
respect thereto,  each of the Companies hereby  irrevocably grants CIT a royalty
free license to sell,  or  otherwise  dispose or transfer,  in  accordance  with
Paragraph  10.3 of Section 10 of this  Financing  Agreement,  and the applicable
terms hereof, of any of the Inventory upon the occurrence of an Event of Default
which has not been waived in writing by CIT.

         6.4 The  Companies  agree at their  own  cost and  expense  to keep the
Equipment in as good and substantial  repair and condition as the same is now or
at the time the lien and security  interest granted herein shall attach thereto,
reasonable wear and tear excepted,  making any and all repairs and  replacements
when and where  necessary.  The Companies  also agree to safeguard,  protect and
hold all  Equipment  in  accordance  with the terms  hereof and subject to CIT's
security  interest.  Absent CIT's prior written consent,  any sale,  exchange or
other  disposition  of any  Equipment  shall  be  made by the  Companies  in the
ordinary course of their business and as set forth herein. The Companies may, in
the ordinary course of their business,  sell,  exchange or otherwise  dispose of
obsolete or surplus Equipment provided, however, that: (a) the then value of the
Equipment so disposed of in any Fiscal Year does not exceed $1,000,000.00 in the
aggregate;  and (b) the proceeds of any such sales or dispositions shall be held
in trust by the Companies for CIT and shall be  immediately  delivered to CIT by
deposit to the Depository Account,  except that the Companies may retain and use
such proceeds to purchase  forthwith  replacement  Equipment which the Companies
determine in their  reasonable  business  judgment to have a collateral value at
least equal to the Equipment so disposed of or sold; provided, however, that the
aforesaid right shall automatically cease upon the occurrence of a Default or an
Event of Default which is not waived in writing by CIT. Upon the sale, exchange,
or other disposition of the Equipment, as herein provided, the security interest
provided for herein  shall,  without  break in  continuity  and without  further
formality  or act,  continue  in, and attach to,  all  proceeds,  including  any
instruments  for the payment of money,  Accounts,  documents of title,  shipping
documents, chattel paper and all other cash and non-cash proceeds of such sales,
exchange or  disposition.  Until payment to the selling  Company by the buyer of
the Equipment,  CIT shall have all of the rights of an unpaid seller,  including
stoppage in transit, replevin, rescission and reclamation.

         6.5 The rights and security  interests  granted to CIT hereunder are to
continue  in full force and  effect,  notwithstanding  the  termination  of this
Financing  Agreement or the fact that the Revolving  Loan Accounts may from time
to time be temporarily in a credit position,  until the final payment in full to
CIT of all  Obligations  and the  termination of this Financing  Agreement.  Any
delay,  or omission by CIT to exercise any right hereunder shall not be deemed a
waiver  thereof,  or be deemed a waiver of any other  right,  unless such waiver
shall be in writing and signed by CIT. A waiver on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any future occasion.
<PAGE>

         6.6  Notwithstanding  CIT's security  interest in the Collateral and to
the extent that the  Obligations  are now or hereafter  secured by any assets or
property other than the Collateral or by the guarantee,  endorsement,  assets or
property of any other person, CIT shall have the right in its sole discretion to
determine which rights,  liens,  security interests or remedies CIT shall at any
time pursue, foreclose upon, relinquish,  subordinate,  modify or take any other
action with respect to,  without in any way  modifying or affecting any of them,
or any of CIT's rights hereunder.

         6.7 Any balances to the credit of the Companies and any other  property
or assets of the  Companies in the  possession  or control of CIT may be held by
CIT as security for any Obligations and applied in whole or partial satisfaction
of such Obligations when due. The liens and security  interests  granted herein,
and any other lien or security  interest CIT may have in any other assets of the
Companies,  shall secure payment and  performance of all now existing and future
Obligations.  CIT may in its discretion  charge any or all of the Obligations to
the Revolving Loan Account when due.

         6.8 Each of the Companies  possess all General  Intangibles  and rights
thereto  necessary to conduct their business as conducted as of the Closing Date
and the  Companies  shall  maintain  their  rights  in,  and the value  of,  the
foregoing  in  the  ordinary  course  of  their  business,   including,  without
limitation,  by making timely  payment with respect to any  applicable  licensed
rights.  The Companies  shall deliver to CIT, and/or shall cause the appropriate
party to deliver to CIT,  from time to time such pledge or  security  agreements
with respect to General Intangibles (now or hereafter acquired) of the Companies
as CIT shall require to obtain valid first liens thereon.  In furtherance of the
foregoing,  the Companies  shall provide  timely notice to CIT of any additional
Patents, Trademarks,  tradenames,  service marks, Copyrights, brand names, trade
names, logos and other trade designations  acquired or applied for subsequent to
the Closing Date and the Companies shall execute such  documentation  as CIT may
reasonably require to obtain and perfect its lien thereon.  The Companies hereby
notify CIT that Broadband Network does business under the tradename "Worldbridge
Broadband Services, Inc." Each of the Companies hereby irrevocably grants to CIT
a  royalty-free,  non-exclusive  license in the General  Intangibles,  including
tradenames, Trademarks, Copyrights, Patents, licenses, and any other proprietary
and  intellectual  property rights and any and all right,  title and interest in
any of the foregoing,  for the sole purpose,  upon the occurrence of an Event of
Default,  of the right  to:  (i)  advertise  for sale and sell or  transfer  any
Inventory  bearing  any of the  General  Intangibles,  and (ii) make,  assemble,
prepare  for sale or  complete,  or cause  others to do so, any  applicable  raw
materials or Inventory bearing any of the General Intangibles,  including use of
the Equipment and Real Estate for the purpose of completing  the  manufacture of
unfinished goods, raw materials or  work-in-process  comprising  Inventory,  and
apply the  proceeds  thereof to the  Obligations  hereunder,  all as further set
forth in this Financing  Agreement and irrespective of CIT's lien and perfection
in any General Intangibles.

         6.9  Subject  to the  terms of  Section  7.16  hereof,  this  Financing
Agreement and the obligation of the Companies to perform all of their  covenants
and obligations hereunder are further secured by the Mortgages.
<PAGE>

         6.10  The  Companies   shall  give  to  CIT  from  time  to  time  such
mortgage(s), deed(s) of trust or assignment(s) on real estate acquired after the
date hereof as CIT shall  require to obtain a valid first lien  thereon  subject
only to those  exceptions  of  title as set  forth  in  future  title  insurance
policies that are satisfactory to CIT.

SECTION 7.             Representations, Warranties and Covenants
                       -----------------------------------------
         7.1 Each of the Companies  hereby  warrants,  represents  and covenants
that: (a) the fair value of their respective Total Assets exceeds the book value
of the  Total  Liabilities  excluding  intercompany  liabilities  to the  extent
applicable;  (b) each Company is generally  able to pay its debts as they become
due and payable;  and (c) each Company does not have unreasonably  small capital
to carry on its business as it is currently  conducted absent  extraordinary and
unforeseen circumstances.  The Companies further warrant and represent that: (i)
Schedule 1 hereto  correctly and completely  sets forth the Companies' (A) chief
executive  office,  (B) Collateral  locations,  (C) tradenames , and (D) all the
other  information  listed  on said  Schedule;  (ii)  except  for the  Permitted
Encumbrances,  after filing of financing  statements  in the  applicable  filing
clerks  office at the  locations  set forth in Schedule 1 and the  execution  of
Blocked Account  Agreements with the banks which maintain  Depository  Accounts,
this Financing Agreement creates a valid,  perfected and first priority security
interest in the Collateral and the security  interests granted herein constitute
and shall at all times  constitute  the first and only liens on the  Collateral;
(iii) except for the Permitted  Encumbrances,  the Companies are, or will be, at
the time  additional  Collateral is acquired by them,  the absolute owner of the
Collateral  with full  right to pledge,  sell,  consign,  transfer  and create a
security  interest  therein,  free and  clear of any and all  claims or liens in
favor of others; (iv) the Companies will, at their expense, forever warrant and,
at CIT's  request,  defend the same from any and all  claims and  demands of any
other person other than a holder of a Permitted  Encumbrance;  (v) the Companies
will not grant,  create or permit to exist, any lien upon, or security  interest
in, the Collateral,  or any proceeds thereof, in favor of any other person other
than the holders of the Permitted Encumbrances;  and that the Equipment does not
comprise a part of any Company's  Inventory;  and (vi) the Equipment is and will
only be used by the Companies in their business and will not be held for sale or
lease, or removed from their premises, or otherwise disposed of by the Companies
except as otherwise permitted in this Financing Agreement.

         7.2  Each  of the  Companies  agrees  to  maintain  books  and  records
pertaining  to the  Collateral in  accordance  with GAAP and in such  additional
detail, form and scope as CIT shall reasonably require. The Companies agree that
CIT or its  agents  may enter upon any of the  Companies'  premises  at any time
during normal business hours,  and from time to time in its reasonable  business
judgement,  for the purpose of inspecting the Collateral and any and all records
pertaining  thereto.  The  Companies  agree to afford CIT thirty (30) days prior
written notice of any change in the location of any  Collateral,  (i) other than
to locations, that as of the Closing Date, are known to CIT and at which CIT has
filed financing  statements and otherwise fully perfected its liens thereon, and
(ii) other than any change in the location of any Collateral  which is a part of
the BNS Division of C-COR.  The Companies  are also to advise CIT  promptly,  in

<PAGE>

sufficient detail, of any material adverse change relating to the type, quantity
or  quality  of the  Collateral  or on the  security  interests  granted  to CIT
therein.

         7.3 Each of the  Companies  agrees to: (a)  execute and deliver to CIT,
from time to time,  solely for CIT's  convenience in maintaining a record of the
Collateral,  such  written  statements,  and  schedules  as CIT  may  reasonably
require, designating,  identifying or describing the Collateral; and (b) provide
CIT, on request,  with an appraisal of the Inventory which appraisal shall be at
the Companies' expense and otherwise acceptable to CIT. Any failure, however, to
promptly  give CIT such  statements,  or schedules  shall not affect,  diminish,
modify or otherwise limit CIT's security interests in the Collateral.

         7.4 Each of the Companies agrees to comply with the requirements of all
state  and  federal  laws in order to grant to CIT  valid  and  perfected  first
security   interests  in  the   Collateral,   subject  only  to  the   Permitted
Encumbrances.  CIT is hereby  authorized  by the  Companies  to file  (including
pursuant  to the  applicable  terms of the UCC) from time to time any  financing
statements,  continuations or amendments covering the Collateral.  The Companies
hereby  consent to and ratify any and all  execution  and/or filing of financing
statements  covering the  Collateral on or prior to the Closing Date by CIT. The
Companies agree to do whatever CIT may reasonably request, from time to time, by
way of: (a) filing notices of liens, financing statements,  amendments, renewals
and continuations thereof; (b) cooperating with CIT's agents and employees;  (c)
keeping  Collateral  records;  (d) transferring  proceeds of Collateral to CIT's
possession;  and (e) performing such further acts as CIT may reasonably  require
in order to effect the purposes of this Financing  Agreement,  including but not
limited to obtaining control  agreements with respect to deposit accounts and/or
Investment Property.

         7.5 (a) Each of the Companies agrees to maintain  insurance on the Real
Estate,  Equipment  and Inventory  under such  policies of insurance,  with such
insurance  companies,  in such  reasonable  amounts and covering such  insurable
risks as are at all times reasonably  satisfactory to CIT. All policies covering
the Real  Estate,  Equipment  and  Inventory  are,  subject to the rights of any
holders of  Permitted  Encumbrances  holding  claims  senior to CIT,  to be made
payable to CIT, in case of loss, under a standard non-contributory  "mortgagee",
"lender" or "secured  party" clause and are to contain such other  provisions as
CIT may require to fully  protect CIT's  interest in the Real Estate,  Inventory
and Equipment and to any payments to be made under such  policies.  All original
policies or true copies  thereof are to be  delivered to CIT,  premium  prepaid,
with the loss payable endorsement in CIT's favor, and shall provide for not less
than thirty (30) days prior  written  notice to CIT of the exercise of any right
of cancellation. At the Companies' request, or if the Companies fail to maintain
such  insurance,  CIT may  arrange  for such  insurance,  but at the  Companies'
expense and without any  responsibility  on CIT's part for:  (i)  obtaining  the
insurance;  (ii) the solvency of the insurance companies;  (iii) the adequacy of
the coverage;  or (iv) the collection of claims. Upon the occurrence of an Event
of Default  which is not waived in  writing  by CIT,  CIT shall,  subject to the
rights of any holders of Permitted  Encumbrances  holding  claims senior to CIT,
have the sole right,  in the name of CIT or the Companies,  to file claims under
any  insurance  policies,  to  receive,  receipt  and give  acquittance  for any

<PAGE>

payments  that  may  be  payable   thereunder,   and  to  execute  any  and  all
endorsements, receipts, releases, assignments,  reassignments or other documents
that may be necessary to effect the collection,  compromise or settlement of any
claims under any such insurance policies.

         (b)(i) In the  event of any loss or  damage by fire or other  casualty,
insurance  proceeds  relating to the Companies' or a Company's  Inventory  shall
reduce  the  Revolving  Loans.  Upon the  occurrence  of a  Default  or Event of
Default,  CIT may apply Insurance  Proceeds to the Obligations in such manner as
it may deem advisable in its sole discretion;

         (ii) In the event any part of the Companies' or a Company's Real Estate
or Equipment is damaged by fire or other casualty and the Insurance Proceeds for
such damage or other  casualty is less than or equal to  $100,000.00,  CIT shall
promptly apply such Proceeds to reduce the Companies' outstanding balance in the
Revolving  Loan Account.  Upon the  occurrence of a Default or Event of Default,
CIT may apply  Insurance  Proceeds to the  Obligations  in such manner as it may
deem advisable in its sole discretion;

         (iii) Absent the  occurrence of an Event of Default,  and provided that
(x) the Companies have sufficient business interruption insurance to replace the
lost profits of any of the Companies' facilities, and (y) the Insurance Proceeds
are in excess of  $100,000.00,  the Companies may elect (by  delivering  written
notice to CIT) to replace,  repair or restore  such Real Estate or  Equipment to
substantially  the equivalent  condition prior to such fire or other casualty as
set forth herein. If the Companies do not, or cannot, elect to use the Insurance
Proceeds as set forth  above,  CIT may,  subject to the rights of any holders of
Permitted  Encumbrances  holding  claims  senior  to CIT,  apply  the  Insurance
Proceeds to the payment of the  Obligations  in such manner and in such order as
CIT may reasonably elect; and

         (iv) If the  Companies  elect  to use the  Insurance  Proceeds  for the
repair,  replacement  or restoration  of any Real Estate and/or  Equipment,  and
there is then no Event of Default,  (x)  Insurance  Proceeds for any loss are in
excess of  $100,000.00  on  Equipment  and/or Real Estate will be applied to the
reduction of the Revolving Loans and (y) CIT may set up an Availability  Reserve
in an amount equal to said Insurance Proceeds.  The Availability Reserve will be
reduced  dollar-for-dollar  upon  receipt of  non-cancelable  executed  purchase
orders,   delivery  receipts  or  contracts  for  the  replacement,   repair  or
restoration of Equipment and/or the Real Estate and  disbursements in connection
therewith.  Prior to the  commencement  of any material  restoration,  repair or
replacement of Real Estate,  the Companies  shall provide CIT with a restoration
plan and a total budget certified by an independent  third party  experienced in
construction costing. If there are insufficient  Insurance Proceeds to cover the
cost of restoration as so determined, the Companies shall be responsible for the
amount of any such  insufficiency,  prior to the commencement of restoration and
shall  demonstrate  evidence  of  such  before  the  reserve  will  be  reduced.
Completion  of   restoration   shall  be  evidenced  by  a  final,   unqualified
certification  of the  design  architect  employed,  if  any;  an  unconditional
Certificate of Occupancy,  if  applicable;  such other  certification  as may be
required by law;  or if none of the above is  applicable,  a written  good faith
determination   of  completion  by  the  Companies   (herein   collectively  the

<PAGE>

"Completion").  Upon Completion,  any remaining reserve as established hereunder
will be automatically released.

         (c) In the event the  Companies or any one of them fails to provide CIT
with  timely  evidence,  acceptable  to CIT,  of its  maintenance  of  insurance
coverage required  pursuant to paragraph 7.5(a) above, CIT may purchase,  at the
Companies' expense,  insurance to protect CIT's interests in the Collateral. The
insurance acquired by CIT may, but need not, protect the Companies'  interest in
the  Collateral,  and  therefore  such  insurance  may not pay claims  which the
Companies may have with respect to the  Collateral or pay any claim which may be
made against the Companies in connection with the  Collateral.  In the event CIT
purchases,  obtains or  acquires  insurance  covering  all or any portion of the
Collateral,  the Companies shall be responsible for all of the applicable  costs
of such insurance,  including  premiums,  interest (at the applicable Chase Bank
Rate for Revolving  Loans set forth in paragraph 8.1 of Section 8 hereof),  fees
and any other  charges with respect  thereto,  until the  effective  date of the
cancellation  or the  expiration of such  insurance.  CIT may charge all of such
premiums,  fees, costs,  interest and other charges to the Companies'  Revolving
Loan Accounts.  The Companies hereby acknowledges that the costs of the premiums
of any  insurance  acquired by CIT may exceed the costs of  insurance  which the
Companies  may be able to purchase on their own. In the event that CIT purchases
such  insurance,  CIT will notify the Companies of said  purchase  within thirty
(30) days of the date of such purchase.  If, within thirty (30) days of the date
of such notice,  the Companies provide CIT with proof that the Companies had the
insurance  coverage  required  pursuant to 7.5(a)  above (in form and  substance
satisfactory  to CIT) as of the date on which CIT  purchased  insurance  and the
Companies  continued  at all times to have such  insurance,  then CIT  agrees to
cancel the insurance  purchased by CIT and credit the Companies'  Revolving Loan
Account with the amount of all costs, interest and other charges associated with
any insurance purchased by CIT, including with any amounts previously charged to
the Revolving Loan Account.

         7.6 Each of the Companies agrees to pay, when due, all Taxes, including
sales taxes,  assessments,  claims and other charges lawfully levied or assessed
upon the  Companies  or the  Collateral  unless such Taxes are being  diligently
contested in good faith by the Companies by appropriate proceedings and adequate
reserves are established in accordance with GAAP. Notwithstanding the foregoing,
if any lien  shall be filed or claimed  thereunder  (a) for Taxes due the United
States of America, or (b) which in CIT's opinion might create a valid obligation
having  priority  over the  rights  granted  to CIT  herein  (exclusive  of Real
Estate),  such lien shall not be deemed to be a Permitted  Encumbrance hereunder
and the Companies shall  immediately pay such tax and remove the lien of record.
If the  Companies  or any one of them  fails  to do so  promptly,  then at CIT's
election,  CIT may (i) create an  Availability  Reserve in such amount as it may
deem  appropriate  in its business  judgement,  or (ii) upon the occurrence of a
Default or Event of Default,  imminent  risk of seizure,  filing of any priority
lien, forfeiture, or sale of the Collateral, pay Taxes on the Companies' behalf,
and the amount thereof shall be an Obligation secured hereby and due on demand.

         7.7 Each of the Companies:  (a) agrees to comply with all acts,  rules,
regulations and orders of any  legislative,  administrative  or judicial body or

<PAGE>

official,  which the  failure to comply  with would have a material  and adverse
impact on the  Collateral,  or any material part thereof,  or on the business or
operations of the Companies or any one of them,  provided that the Companies may
contest any acts,  rules,  regulations,  orders and directions of such bodies or
officials in any reasonable manner which will not, in CIT's reasonable  opinion,
materially and adversely effect CIT's rights or priority in the Collateral;  (b)
agrees to comply with all environmental  statutes,  acts, rules,  regulations or
orders as presently existing or as adopted or amended in the future,  applicable
to the Collateral, the ownership and/or use of their real property and operation
of their  business,  which the failure to comply with would have a material  and
adverse  impact on the  Collateral,  or any  material  part  thereof,  or on the
operation of the business of the Companies or any one of them; and (c) shall not
be  deemed to have  breached  any  provision  of this  Paragraph  7.7 if (i) the
failure to comply with the requirements of this Paragraph 7.7 resulted from good
faith error or innocent  omission,  (ii) the  Companies  promptly  commence  and
diligently pursue a cure of such breach,  and (iii) such failure is cured within
(30) days following the Companies' receipt of notice of such failure, or if such
cannot in good faith be cured within thirty (30) days, then such breach is cured
within a  reasonable  time frame  based upon the extent and nature of the breach
and the necessary  remediation,  and in conformity  with any applicable  consent
order, consensual agreement and applicable law.

         7.8 Until  termination  of this  Financing  Agreement  and  payment and
satisfaction of all Obligations due hereunder,  the Companies agree that, unless
CIT shall have  otherwise  consented  in  writing,  each of the  Companies  will
furnish to CIT: (a) within ninety (90) days after the end of each Fiscal Year of
the  Companies,  an  audited  Consolidated  Balance  Sheet,  with  an  unaudited
Consolidating  Balance Sheet attached thereto, as at the close of such year, and
statements of operations,  cash flow and  shareholders'  equity of C-COR and its
consolidated   subsidiaries  for  such  year,   audited  by  independent  public
accountants  selected by the Companies and satisfactory to CIT; (b) within sixty
(60) days after the end of each Fiscal Quarter a Consolidated  Balance Sheet and
Consolidating  Balance  Sheet as at the end of such  period  and  statements  of
operations,  cash flow and  shareholders'  equity of C-COR and its  consolidated
subsidiaries,  certified by an authorized financial or accounting officer of the
Companies;  (c)  within  thirty  (30)  days  after  the  end  of  each  month  a
Consolidated  Balance  Sheet  as at the end of such  period  and  statements  of
operations, cash flow and shareholders' equity of C-COR and its consolidated all
subsidiaries for such period, certified by an authorized financial or accounting
officer of the Companies;  and (d) from time to time,  such further  information
regarding  the business  affairs and  financial  condition of the  Companies and
their  consolidated  subsidiaries  as CIT  may  reasonably  request,  including,
without  limitation (i) the  accountant's  management  practice  letter and (ii)
annual  cash  flow  projections  in form  satisfactory  to CIT.  Each  financial
statement  which  the  Companies  are  required  to  submit  hereunder  must  be
accompanied  by  an  officer's  certificate,   signed  by  the  President,  Vice
President, Controller, or Treasurer, pursuant to which any one such officer must
certify that:  (x) the  financial  statement(s)  fairly  present in all material
respects the  financial  condition  and results of  operations  of C-COR and its
consolidated  subsidiaries  at  the  end of the  particular  accounting  period,
subject to year-end audit  adjustments and the absence of notes;  and (y) during
the  particular  accounting  period:  (A) there has been no  Default or Event of
Default under this  Financing  Agreement,  provided,  however,  that if any such
                                           ------------------
<PAGE>

officer has  knowledge  that any such Default or Event of Default,  has occurred
during such period, the existence of and a detailed description of same shall be
set forth in such officer's certificate; (B) the Companies have not received any
notice of cancellation with respect to their property  insurance  policies;  (C)
the  Companies  have not  received  any notice  that could  result in a material
adverse  effect on the  value of the  Collateral  taken as a whole;  and (D) the
exhibits   attached  to  such   financial   statement(s)   constitute   detailed
calculations  showing compliance with all financial  covenants contained in this
Financing Agreement (if applicable).

         7.9 Until  termination  of the  Financing  Agreement  and  payment  and
satisfaction of all Obligations  hereunder,  each of the Companies  agrees that,
without the prior written consent of CIT, except as otherwise  herein  provided,
the Companies or any one of them will not:

          (a)  Mortgage,  assign, pledge, transfer or otherwise permit any lien,
               charge, security interest,  encumbrance or judgment (whether as a
               result of a purchase  money or title  retention  transaction,  or
               other  security  interest,  or  otherwise) to exist on any of the
               Companies'  Collateral or any other assets,  whether now owned or
               hereafter acquired, except for the Permitted Encumbrances;
          (b)  Incur  or  create  any  Indebtedness  other  than  the  Permitted
               Indebtedness;
          (c)  Sell,  lease,  assign,  transfer  or  otherwise  dispose  of  (i)
               Collateral,  except as otherwise  specifically  permitted by this
               Financing  Agreement,  or (ii) either all or substantially all of
               any of the Company's assets, which do not constitute Collateral;
          (d)  Merge,  consolidate or otherwise alter or modify their respective
               corporate  names,  principal  places of business,  structure,  or
               existence, re-incorporate or re-organize, or enter into or engage
               in any  operation  or  activity  materially  different  from that
               presently  being  conducted by the  Companies or any one of them,
               except that the Companies may (A) change their  corporate name or
               address or  principal  places of  business,  or (B) a Company may
               merge with and into any other  Company  (with a Company being the
               survivor  of such  merger);  provided  that in any such  instance
               under (A) or (B) above (i) the  Companies  shall  give CIT thirty
               (30) days prior written  notice  thereof,  and (ii) the Companies
               shall execute and deliver,  prior to or  simultaneously  with any
               such action,  any and all documents and  agreements  requested by
               CIT to confirm the  continuation and preservation of all security
               interests and liens granted to CIT hereunder;
          (e)  Assume,  guarantee,  endorse, or otherwise become liable upon the
               obligations  of any  person,  firm,  entity or  corporation,  (i)
               except by the  endorsement of negotiable  instruments for deposit
               or collection or similar  transactions  in the ordinary course of
               business,  (ii) except for the guaranties described on Schedule 5
               and (iii) except for  guaranties by the Companies of contracts of
               subsidiaries  of the Companies  entered in the ordinary course of
               business  of such  subsidiaries  provided  CIT is  given  written
               notice from the Companies prior to any Company  entering into any
               such guaranty;

<PAGE>

          (f)  Declare or pay any dividend (other than stock dividends and other
               dividends   paid  by  any   subsidiary  of  C-COR  to  C-COR)  or
               distributions  of any kind on, or  purchase,  acquire,  redeem or
               retire, any of the capital stock or equity interest, of any class
               whatsoever, whether now or hereafter outstanding;
          (g)  Make any  advance  or loan to, or any  investment  in,  any firm,
               entity, person or corporation (provided, however, (i) any Company
               may make loans to any other  Company and (ii) the  Companies  may
               make loans to  subsidiaries of the Companies from time to time so
               long as the aggregate  outstanding principal amount of such loans
               shall  not  exceed  $31,200,000.00  at any time) or  purchase  or
               acquire  all or  substantially  all of the stock or assets of any
               entity, person or corporation; or
          (h)  Pay any  management,  consulting  or  other  similar  fees to any
               person, corporation or other entity affiliated with the Companies
               in  excess  of  $50,000   per  Fiscal  Year   (calculated   on  a
               non-cumulative basis).

         7.10 [Intentionally left blank]

         7.11 Each of the  Companies  agrees to advise CIT in writing of: a) all
expenditures  (actual or anticipated) in excess of $150,000.00 from the budgeted
amount  therefor  in  any  Fiscal  Year  for  x)  environmental   clean-up,   y)
environmental  compliance  or z)  environmental  testing  and the impact of said
expenses  on each of the  Companies'  Working  Capital;  and b) any  notices the
Companies  receive  from any local,  state or  federal  authority  advising  the
Companies of any environmental  liability (real or potential)  stemming from any
of the Companies' operations, their premises, their waste disposal practices, or
waste disposal sites used by any of the Companies and to provide CIT with copies
of all such notices if so required.

         7.12 Each of the Companies hereby agrees to indemnify and hold harmless
CIT and its  officers,  directors,  employees,  attorneys  and  agents  (each an
"Indemnified  Party") from, and holds each of them harmless against, any and all
losses, liabilities,  obligations,  claims, actions, damages, costs and expenses
(including  attorney's  fees)  and  any  payments  made by CIT  pursuant  to any
indemnity  provided  by CIT with  respect to or to which any  Indemnified  Party
could be  subject  insofar as such  losses,  liabilities,  obligations,  claims,
actions,  damages,  costs,  fees or expenses with respect to the Loan Documents,
including  without  limitation  those which may arise from or relate to: (a) the
Depository  Account,  the  Blocked  Accounts,   the  lockbox  and/or  any  other
depository account and/or the agreements executed in connection  therewith;  and
(b) any and all  claims  or  expenses  asserted  against  CIT as a result of any
environmental  pollution,  hazardous material or environmental clean-up relating
to the Real  Estate;  or any  claim or  expense  which  results  from any of the
Companies'  operations  (including,  but not limited  to, any of the  Companies'
off-site disposal  practices) and use of the Real Estate,  which CIT may sustain
or incur  (other than solely as a result of the  physical  actions of CIT on the
Companies'  premises  which are  determined  to constitute  gross  negligence or

<PAGE>

willful  misconduct by a court of competent  jurisdiction),  all whether through
the alleged or actual negligence of such person or otherwise,  except and to the
extent that the same results  solely and directly  from the gross  negligence or
willful misconduct of such Indemnified Party as finally determined by a court of
competent  jurisdiction.  The Companies  hereby agree that this indemnity  shall
survive  termination  of  this  Financing  Agreement,  as well  as  payments  of
Obligations which may be due hereunder. CIT may, in its sole reasonable business
judgement,  establish such Availability  Reserves with respect thereto as it may
deem advisable under the circumstances  and, upon any termination  hereof,  hold
such reserves as cash reserves for any such contingent liabilities.

         7.13 Without the prior written consent of CIT, the Companies agree that
they will not enter into any transaction,  including,  without  limitation,  any
purchase,  sale,  lease,  loan or exchange of property  with any  subsidiary  or
affiliate of the Companies, provided that, except as otherwise set forth in this
Financing  Agreement  (including as set forth in Paragraph 7.9(g) of Section 7),
the Companies or any one of them may enter into sale and service transactions in
the  ordinary   course  of  their   business  and  pursuant  to  the  reasonable
requirements  of any such Company,  and upon standard  terms and  conditions and
fair and reasonable  terms,  no less favorable to such Company than such Company
could obtain in a comparable  arms length  transaction  with an unrelated  third
party, provided further that no Default or Event of Default exists or will occur
hereunder prior to and after giving effect to any such transaction..

         7.14 The  Companies  have assigned to CIT the life  insurance  policies
described  on  Schedule  3  attached  hereto.  The  Companies  agree to give CIT
immediate  notice of any deletions or additions to the life  insurance  policies
described on Schedule 3.

         7.15 In order to induce  CIT to enter into this  Agreement  and to make
the loans and  advances  provided  for  herein and to assist  the  Companies  in
establishing or opening Letters of Credit, each of the Companies makes, on or as
of the occurrence of each such loan, advance or assistance (except to the extent
such  representations  or warranties  relate to an earlier date or are no longer
true and correct in all material respects solely as a result of transactions not
prohibited by the Loan Documents),  the following representations and warranties
to CIT.

         (a) Organization and  Qualification.  Each of the Companies (i) is duly
             ------------------------------
organized  validly  existing  and  in  good  standing  under  the  laws  of  the
jurisdiction of its  incorporation  or  organization,  (ii) has the corporate or
limited  liability company (as the case may be) power to own its property and to
carry  on its  business  as now  conducted  and  (iii) is duly  qualified  to do
business and is in good standing, in each case in each jurisdiction in which the
failure to be so qualified or in good standing  would  reasonably be expected to
have a Material Adverse Effect.

         (b) Authorization and Validity. Each of the Companies has the corporate
             --------------------------
or  limited  liability  company  (as the case may be)  power  and  authority  to
execute,  deliver and perform its obligations hereunder and under the other Loan
Documents  to which each  Company  is a party and all such  action has been duly
authorized  by all  necessary  corporate  proceedings  on  its  part.  The  Loan
Documents  to which  it is a party  have  been  duly and  validly  executed  and
delivered by each of the  Companies  and  constitute  valid and legally  binding
agreements  of  each  of  the  Companies  enforceable  in  accordance  with  the

<PAGE>

respective terms thereof,  except, in each case, as such  enforceability  may be
limited  by  bankruptcy,  insolvency,  reorganization,   moratorium,  fraudulent
transfer or other  similar laws  relating to or  affecting  the  enforcement  of
creditors' rights generally and general principles of equity.

         (c) Consents. No authorization, consent, approval, license or exemption
             --------
(other than such exemptions that exist under applicable law, that are permitted,
or that have been  obtained)  of any person or filing or  registration  with any
court  or  governmental  department,   commission,   board,  bureau,  agency  or
instrumentality,  domestic or foreign,  is necessary for the valid,  delivery or
performance by each of the Companies of any Loan Document to which it is a party
or for the grant of a security interest in or mortgage on the collateral covered
by the Loan  Documents,  except such matters  relating to  performance  as would
ordinarily be done in the ordinary course of business after the date hereof.

         (d)  Conflicting or Adverse  Agreements or  Ratifications.  Neither the
              ----------------------------------------------------
delivery of the Loan  Documents  nor  compliance  with the terms and  provisions
hereof or thereof will be contrary to the provisions of, or constitute a default
under (i) the charter or bylaws or operating  agreement  (as the case may be) of
any of the Companies or (ii) any applicable  law or any  applicable  regulation,
order, writ,  injunction or decree of any court or governmental  instrumentality
or (iii) any material  agreement to which any of the  Companies is a party or by
which it is bound or to which it is subject.

         (e) Title to Assets;  Licenses and Permits.  Each of the  Companies has
             --------------------------------------
good title to all  personal  property  and good and  indefeasible  title to or a
subsisting  leasehold interest in, all realty as reflected as of the date hereof
on its books and records as being owned or leased by it after  giving  effect to
the  transaction  contemplated  herein,  subject  to no liens  except  Permitted
Encumbrances.  All of such assets are being maintained by the appropriate person
in good working condition in accordance with industry standards.

         (f)  Litigation.  Except as set  forth in  Schedule  6, no  proceedings
              ----------
before any court or governmental agency or department are pending against any of
the Companies and to the  knowledge of any of the  Companies,  none of same have
been threatened  which if adversely  determined  could reasonably be expected to
have a Material  Adverse Effect.  Except as set forth in Schedule 6, at the date
hereof, no proceedings against or affecting any of the Companies are pending or,
to the  knowledge  of any of the  Companies,  threatened  before  any  court  or
governmental  agency or department  which could reasonably be expected to have a
Material Adverse Effect.

         (g) No Defaults.  Each of the Companies is not in default (i) under any
             -----------
material  provisions of any  instrument  evidencing any  Indebtedness  or of any
agreement  relating thereto in such manner as to cause a Material Adverse Effect
or (ii) in any respect under or in violation of any order,  writ,  injunction or
decree of any court or governmental instrumentality,  in such manner as to cause
a Material Adverse Effect or (iii) under any provision of any material  contract
to which any of the  Companies is a party,  which  default  would  reasonably be
expected to have a Material Adverse Effect.  Each of the Companies will give CIT
prompt written notice of any event or  circumstance  that may constitute  such a

<PAGE>

default  and,  in any event,  will  provide it upon  receipt  with copies of all
material  notices from  landlords or other  property  owners with respect to any
business location or operation of each of the Companies.

         (h)  Investment  Company Act. None of the  Companies is an  "investment
              -----------------------
company,"  as such term is defined  in, or subject to  registration  under,  the
Investment Company Act of 1940, as amended.

         (i) ERISA.  The  Companies do not maintain or contribute to any Benefit
             -----
Plan other than those  listed on Schedule 6. Each  Benefit  Plan has been and is
being  maintained  and funded in accordance  with its terms and in compliance in
all material respects with all provisions of ERISA and the Internal Revenue Code
applicable  thereto.  The Companies and each ERISA  Affiliate have fulfilled all
obligations  related to the minimum funding  standards of ERISA and the Internal
Revenue Code for each Benefit Plan and no "accumulated  funding  deficiency," as
such term is defined in Section  302 of ERISA and  Section  412 of the  Internal
Revenue  Code,  has  occurred  or is  reasonably  likely  to  occur,  nor do the
conditions  for  imposition of a lien under Section 302(f) of ERISA exist or are
reasonably  likely to exist,  with respect to any Benefit Plan,  and neither any
Company nor any ERISA  Affiliate has incurred any liability  (other than routine
liability  for  premiums)  under  Title IV of ERISA with  respect to any Benefit
Plan.  No event or events have  occurred  with  respect to any  Benefit  Plan in
connection with which any Company, any ERISA Affiliate,  or, to the knowledge of
any Company,  any fiduciary of a Benefit Plan, directly or indirectly,  would be
subject to any material  liability  (other than routine  liability for premiums,
contributions  (if  required)  and,  with  respect  to a Benefit  Plan,  routine
liabilities for benefits),  individually or in the aggregate, under ERISA or the
Internal Revenue Code.

         (j)  Environmental  Matters.  To the  best of  each  of the  Companies'
              ----------------------
knowledge,  each of the Companies (a)  possesses all  environmental,  health and
safety licenses, permits, authorizations,  registrations,  approvals and similar
rights necessary under  Environmental  Laws for each of the Companies to conduct
its  operations  as now  being  conducted,  except  where  failure  to have such
licenses, permits, authorizations,  registrations, approvals, and similar rights
would not reasonably be expected to have a Material Adverse Effect, and (b) each
of such licenses, permits, authorizations,  registrations, approvals and similar
rights is valid and subsisting, in full force and effect and enforceable by each
of the  Companies,  and each of the Companies is in  compliance  with all terms,
conditions or other  provisions of such  permits,  authorizations,  regulations,
approvals  and similar  rights  except for such failure or  noncompliance  that,
individually or in the aggregate for each of the Companies, would not reasonably
be expected to have a Material  Adverse  Effect.  Each of the  Companies has not
received any written notices of any violation or noncompliance with, or remedial
obligation under, any Environmental  Laws (which violation,  non-compliance,  or
remedial  obligation  has not been cured or would not  reasonably be expected to
have a Material  Adverse Effect) and there are no writs,  injunctions,  decrees,
orders or  judgments  outstanding  under the  Environmental  Laws,  or lawsuits,
claims,   proceedings,   or,  to  the  knowledge  of  each  of  the   Companies,
investigations  or inquiries  pending or threatened  under  Environmental  Laws,

<PAGE>

relating to the  ownership,  use,  condition,  maintenance  or operation  of, or
conduct of business  related to, any property owned,  leased or operated by each
of the  Companies  or other  assets of each of the  Companies  other  than those
violations,   instances  of  noncompliance,   obligations,  writs,  injunctions,
decrees, orders, judgments,  lawsuits,  claims,  proceedings,  investigations or
inquiries that  individually  or in the aggregate for each the Companies,  would
not  reasonably  be expected  to have a Material  Adverse  Effect.  There are no
obligations,   undertakings  or  liabilities  arising  out  of  or  relating  to
Environmental  Laws  which  any of the  Companies  has  agreed  to,  assumed  or
retained, or to the best of each of the Companies' knowledge by which any of the
Companies  are  adversely  affected,  by  contract  or  otherwise,  except  such
obligations,  undertakings or liabilities as would not reasonably be expected to
have a Material Adverse Effect. Each of the Companies has not received a written
notice or claim to the effect that any of them are or may be liable to any other
person as the result of a release or threatened  release of a Hazardous Material
except  such  notice or claim that would not  reasonably  be  expected to have a
Material   Adverse  Effect.   Each  of  the  Companies  has  complied  with  all
Environmental  Laws  and the  requirements  of any  permits,  licenses  or other
authorizations  issued under any  Environmental  Laws,  except any noncompliance
that would not reasonably be expected to have a Material Adverse Effect.

         (k) Purpose of Loans.  The proceeds of the Revolving Loans will be used
             ----------------
by the Companies for working capital and general corporate purposes. None of the
proceeds of any  Revolving  Loans will be used  directly or  indirectly  for the
purpose of  purchasing  or  carrying  any "margin  stock"  within the meaning of
Regulation U (herein  called  "margin  stock") or for the purpose of reducing or
retiring any  indebtedness  which was  originally  incurred to purchase or carry
margin stock, or for any other purpose which might  constitute this  transaction
as a "purpose  credit"  within the meaning of  Regulation  U. Neither any of the
Companies  nor any agent  acting on its behalf has taken or will take any action
which  might  cause  this  Agreement  or any  other  Loan  Document  to  violate
Regulation U, Regulation X or any other  regulation of the Board of Governors or
to violate the Securities Exchange Act of 1934.

         (l) Insurance.  Each of the Companies maintains insurance of such types
             ---------
as is usually carried by corporations of established  reputation  engaged in the
same or similar  businesses  and  similarly  situated  with  financially  sound,
responsible  and  reputable  insurance  companies  or  associations  (or,  as to
workers'  compensation  or  similar  insurance,  with  an  insurance  fund or by
self-insurance  authorized  by the  jurisdiction  in which  its  operations  are
carried on) and in such amounts (and with  co-insurance and deductibles) as such
insurance is usually  carried by  corporations  of  established  reputation  and
engaged in the same or similar  businesses  and similarly  situated,  but in any
event,  with respect to  improvements  to real  property  and tangible  personal
property  (assuming the subject  improvements are in fact replaced or restored),
in amounts acceptable to CIT. No Company maintains any formalized self-insurance
program with respect to its assets or operations or material  risks with respect
thereto.

         (m)  Indebtedness  and Contingent  Liabilities.  Except as disclosed in
              -----------------------------------------
writing  to  CIT,  the  Companies  do  not  have  any  outstanding  Indebtedness

<PAGE>

(excluding the loans and advances hereunder) or material  contractually  assumed
contingent liabilities other than Permitted Indebtedness.

         (n) Security  Interests in Favor of CIT.  This  Agreement and the other
             -----------------------------------
Loan Documents create valid security interest and liens in all of the Collateral
described  therein  in favor of CIT  securing  the  Obligations  and  constitute
(subject  to (i) the  filing of  financing  statements  on the date  hereof  and
thereafter from time to time on the CIT's request  therefor and (ii) delivery of
any  collateral  after the date  hereof  as  provided  herein or any other  Loan
Document and (iii) the execution of Blocked  Account  Agreements  with the banks
which  maintain  Depository  Accounts) and,  except for Permitted  Encumbrances,
perfected first priority liens and security  interests in  substantially  all of
such  collateral  described  therein  subject to no liens  other than  Permitted
Encumbrances

         (o)  USA  Patriot  Act.  Neither  the  making  of the  Revolving  Loans
              ---------------
hereunder (or the extension of any other credit contemplated  hereunder) nor the
Borrower's use of the proceeds thereof will violate Sections 326 and 371 through
377 of the Uniting and  Strengthening  America by  Providing  Appropriate  Tools
Required to Intercept  and Obstruct  Terrorism  Act of 2001,  Pub. L. No. 107-56
(also  known as the USA  Patriot  Act) or any  enabling  legislation  or  rules,
regulations or executive orders relating thereto.

         7.16 Within sixty (60) days after the Closing Date, the Companies shall
have satisfied the following requirements:

         (a)  Mortgages/Deeds  of Trust - The Companies  shall have executed and
              ------------------------
delivered to CIT, an agent of CIT or to a title insurance company  acceptable to
CIT,  such  mortgages  and/or  deeds  of  trust  (the  "Mortgages")  as CIT  may
reasonably  require to obtain a first lien on the Real Estate  owned by C-COR in
Manlius,  New York and a second lien on the Real Estate  owned by C-COR in State
College,  Pennsylvania.  The  Companies  shall  obtain the consent of the entity
which holds a first lien on the State College,  Pennsylvania  Real Estate to the
granting of a second lien on such real estate in favor of CIT.

         (b) Title Insurance  Policies - CIT shall have received,  in respect of
each Mortgage, a mortgagee's title policy or marked-up  unconditional binder for
such insurance.  Each such policy shall (i) be in an amount satisfactory to CIT;
(ii)  insure  that the  Mortgage  insured  thereby  creates a valid  lien on the
property  covered by the Mortgage with proper lien  priority,  free and clear of
all defects and  encumbrances  except those acceptable to CIT; (iii) name CIT as
the  insured  thereunder;  and (iv)  contain  such  endorsements  and  effective
coverage as CIT may  reasonably  request,  including,  without  limitation,  the
revolving line of credit endorsement. CIT shall also have received evidence that
all premiums in respect of such policies have been paid and that all charges for
mortgage recording taxes, if any, shall have been paid.

         (c) Surveys - CIT and the title  insurance  company issuing each policy
             -------
referred to in the immediately  preceding  paragraph  (each, a "Title  Insurance
                                                                ----------------
Company")  shall have  received  maps or plats of a perimeter or boundary of the
-------

<PAGE>

site  of  each  of  the  properties  covered  by  the  Mortgages,  dated  a date
satisfactory  to CIT and the relevant  Title  Insurance  Company  prepared by an
independent  professional  licensed  land surveyor  satisfactory  to CIT and the
relevant Title Insurance  Company,  which maps or plats and the surveys on which
they are based  shall be made in  accordance  with the Minimum  Standard  Detail
Requirements  for Land Title  Surveys  jointly  established  and  adopted by the
American  Land Title  Association  and the American  Congress on  Surveying  and
Mapping;  and, without limiting the generality of the foregoing,  there shall be
surveyed  and  shown  on the maps or plats or  surveys  the  following:  (i) the
locations on such sites of all the buildings,  structures and other improvements
and the established  building  setback lines insofar as the foregoing affect the
perimeter or boundary of such property;  (ii) the lines of streets  abutting the
sites and width thereof; (iii) all access and other easements appurtenant to the
sites or  necessary or desirable  to use the sites;  (iv) all  roadways,  paths,
driveways,  easements,  encroachments  and  overhanging  projections and similar
encumbrances  affecting the sites,  whether  recorded,  apparent from a physical
inspection  of  the  sites  or  otherwise   known  to  the  surveyor;   (v)  any
encroachments  on  any  adjoining  property  by  the  building,  structures  and
improvements  on the  sites;  and (vi) if the site is  designated  as being on a
filed map, a legend relating the survey to said map.  Further,  the survey shall
x) be certified to CIT and the Title  Insurance  Company and y) contain a legend
reciting as to whether or not the site is located in a flood zone.

SECTION 8.             Interest, Fees and Expenses.
                       ---------------------------
         8.1 (a) Interest on the Revolving  Loans shall be payable monthly as of
the end of each month. The Revolving Loans shall bear interest during each month
at a rate equal to either the Chase Bank Rate plus zero percent (0.0%) per annum
(the "Chase Based Rate") or LIBOR plus two and  three-quarters  percent  (2.75%)
per annum (the "LIBOR Based  Rate") on the average of the net balances  owing by
the  Companies  to CIT in the  Revolving  Loan  Account at the close of each day
during such month,  as either of such rates is selected by the Companies two (2)
Business Days prior to the commencement of each such month;  provided,  however,
if the Companies  fail to give any such notice for any month,  interest for such
month  shall be  calculated  at the Chase  Based Rate;  provided  further,  if a
Default or an Event of Default shall have occurred, the Companies shall not have
the option to have the outstanding principal balance of the Revolving Loans bear
interest at the LIBOR  Based Rate.  In the event of any change in the Chase Bank
Rate, the Chase Based Rate shall change, as of the date of such change, so as to
remain zero percent (0.0%) above the Chase Bank Rate. The LIBOR Based Rate shall
be  calculated  based  on a  360-day  year  and the  Chase  Bank  Rate  shall be
calculated  based on a 365-day  year.  CIT shall be entitled to charge each such
Companies' Revolving Loan Account at the rate provided for herein when due until
all Obligations have been paid in full.

         (b)  Notwithstanding  any  provision to the contrary  contained in this
section 8, in the event that the sum of (i) the outstanding  Revolving Loans and
(ii) the  outstanding  Letters  of Credit  exceed  the  lesser of either (x) the
maximum  aggregate  amount  available  under  Sections 3 and 5 of this Financing
Agreement  or (y) the  Revolving  Line of Credit:  (A) as a result of  Revolving

<PAGE>

Loans advanced by CIT at the request of the Companies or any one of them (herein
"Requested Overadvances"),  for any one (1) or more days in any month or (B) for
any  other  reason  whatsoever  (herein  "Other  Overadvances")  and such  Other
Overadvances  continue  for five (5) or more days in any month , the average net
balance  of all  Revolving  Loans for such  month  shall  bear  interest  at the
Overadvance Rate.

         (c) Upon and after the occurrence of an Event of Default and the giving
of any required  notice by CIT in accordance  with the provisions of Section 10,
Paragraph 10.2 hereof,  all Obligations  shall bear interest at the Default Rate
of Interest.

         8.2 [Intentionally left blank]

         8.3 In  consideration  of the  Letter of Credit  Guaranty  of CIT,  the
Companies  shall pay CIT the  Letter of Credit  Guaranty  Fee which  shall be an
amount equal to two and one-quarter percent (2.25%) per annum,  payable monthly,
on the face  amount  of each  Letter of  Credit  less the  amount of any and all
amounts previously drawn under such Letter of Credit.

         8.4 Any and all charges, fees, commissions,  costs and expenses charged
to CIT for the  Companies'  account by any Issuing Bank in  connection  with, or
arising out of, Letters of Credit or out of transactions  relating  thereto will
be charged to the  Revolving  Loan  Account in full when  charged to, or paid by
CIT, or as may be due upon any termination of this Financing  Agreement  hereof,
and when made by any such Issuing Bank shall be conclusive on CIT.

         8.5 Each of the Companies  shall  reimburse or pay CIT, as the case may
be, for: (a) all  Out-of-Pocket  Expenses and (b) any  applicable  Documentation
Fee.

         8.6 Upon the last  Business Day of each month,  commencing on October ,
2002,  the  Companies  shall  pay to CIT (i) the Line of  Credit  Fee,  and (ii)
interest on the Collection Days.

         8.7 To induce CIT to enter into this Financing  Agreement and to extend
to the Companies the Revolving Loans and the Letters of Credit  Guaranties,  the
Companies  shall pay to CIT a Loan  Facility  Fee in the  amount of  $150,000.00
payable upon execution of this Financing Agreement.

         8.8 On the  Closing  Date  and each  anniversary  of the  Closing  Date
thereafter,  the Companies shall pay to CIT the Administrative Management Fee in
the amount of $36,000.00, which shall be deemed fully earned when paid.

         8.9 The Companies  shall pay CIT's standard  charges and fees for CIT's
personnel  used by CIT for  reviewing the books and records of the Companies and
for verifying, testing, protecting, safeguarding, preserving or disposing of all
or  any  part  of  the  Collateral  (which  fees  shall  be in  addition  to the
Administrative Management Fee and any Out-of-Pocket Expenses).
<PAGE>

         8.10  Each of the  Companies  hereby  authorizes  CIT to  charge  their
respective  Revolving Loan Account(s)  with the amount of all their  Obligations
due hereunder as such  payments  become due. The  Companies  hereby  confirm and
agree that they  shall  promptly  pay any  Obligations  to CIT upon its  request
therefor.  Each of the Companies confirms that (a) its liability for any and all
of the fee obligations  (including  without  limitation,  those set forth in 8.6
through  8.9  above) and  Out-of-Pocket  Expenses,  set forth in this  Financing
Agreement and in any of the other Loan  Documents is joint and several,  (b) the
Companies,  as between  themselves,  shall  determine  how to pro-rate  any such
payments due hereunder,  and (c) for ease of administration,  CIT may charge any
of their  Revolving  Loan  Accounts with the amount of any such fee payments and
any such charges which CIT may so make to any of the  Companies'  Revolving Loan
Account(s) as herein provided will be made as an  accommodation to the Companies
and solely at CIT's discretion.

         8.11  In the  event  that  CIT or any  participant  hereunder  (or  any
financial institution which may from time to time become a participant or lender
hereunder)  shall have  determined  in the exercise of its  reasonable  business
judgement  that,  subsequent to the Closing Date, any change in applicable  law,
rule,  regulation or guideline regarding capital adequacy,  or any change in the
interpretation  or  administration   thereof,  or  compliance  by  CIT  or  such
participant  with  any new  request  or  directive  regarding  capital  adequacy
(whether or not having the force of law) of any such authority,  central bank or
comparable  agency,  has or would have the effect of reducing the rate of return
on CIT's or such  participant's  capital  as a  consequence  of its  obligations
hereunder  to a level  below  that  which  CIT or such  participant  could  have
achieved but for such adoption,  change or compliance (taking into consideration
CIT or such  participant's  policies  with  respect to capital  adequacy)  by an
amount reasonably  deemed by CIT or such participant to be material,  then, from
time to time,  the  Companies  shall pay no later  than five (5) days  following
demand to CIT or such  participant  such  additional  amount or  amounts as will
compensate CIT's or such  participant's for such reduction.  In determining such
amount or amounts,  CIT or such participant may use any reasonable  averaging or
attribution methods. The protection of this Paragraph 8.11 shall be available to
CIT or such participant  regardless of any possible  contention of invalidity or
inapplicability  with respect to the applicable law, regulation or condition.  A
certificate of CIT or such  participant  setting forth such amount or amounts as
shall be necessary to compensate  CIT or such  participant  with respect to this
Section 8 and the  calculation  thereof when delivered to the Companies shall be
conclusive on the Companies absent manifest error.  Notwithstanding  anything in
this  paragraph  to the  contrary,  in the  event  CIT or such  participant  has
exercised  its  rights  pursuant  to  this  paragraph,  and  subsequent  thereto
determines that the additional amounts paid by the Companies in whole or in part
exceed the amount  which CIT or such  participant  actually  required to be made
whole,  the excess,  if any,  shall be returned to the  Companies by CIT or such
participant, as applicable.

         8.12.  In the event that any  applicable  law,  treaty or  governmental
regulation,  or any  change  therein  or in the  interpretation  or  application
thereof,  or compliance by CIT or such participant with any request or directive
(whether  or not  having  the  force  of law)  from  any  central  bank or other
financial, monetary or other authority, shall:
<PAGE>

         (a) subject CIT or such  participant to any tax of any kind  whatsoever
with  respect to this  Financing  Agreement  or change the basis of  taxation of
payments to CIT or such  participant of principal,  fees,  interest or any other
amount payable hereunder or under any other documents (except for changes in the
rate of tax on the overall net income of CIT or such  participant by the federal
government or the jurisdiction in which it maintains its principal office);

         (b) impose,  modify or hold  applicable any reserve,  special  deposit,
assessment or similar  requirement against assets held by, or deposits in or for
the account of,  advances or loans by, or other  credit  extended by CIT or such
participant by reason of or in respect to this Financing  Agreement and the Loan
Documents,  including (without limitation) pursuant to Regulation D of the Board
of  Governors  of the  Federal  Reserve  System,  except to the  extent  already
factored in to the LIBOR Rate; or

         (c) impose on CIT or such  participant any other condition with respect
to this Financing Agreement or any other document,  and the result of any of the
foregoing is to increase the cost to CIT or such participant of making, renewing
or  maintaining  its loans  hereunder by an amount that CIT or such  participant
deems to be material in the exercise of its reasonable  business judgement or to
reduce the amount of any payment  (whether of principal,  interest or otherwise)
in respect of any of the loans by an amount that CIT or such  participant  deems
to be material in the exercise of its reasonable  business  judgement,  then, in
any case the Companies shall pay CIT or such  participant,  within five (5) days
following its demand,  such additional  cost or such reduction,  as the case may
be. CIT or such participant  shall certify the amount of such additional cost or
reduced  amount  to  the  Companies  and  the   calculation   thereof  and  such
certification  shall be conclusive  upon the Companies  absent  manifest  error.
Notwithstanding  anything in this paragraph to the contrary, in the event CIT or
such  participant  has  exercised  its rights  pursuant to this  paragraph,  and
subsequent  thereto determine that the additional  amounts paid by the Companies
in whole or in part  exceed the amount  which CIT or such  participant  actually
required pursuant hereto, the excess, if any, shall be returned to the Companies
by CIT or such participant.

         8.13 For purposes of this  Financing  Agreement  and Section 8 thereof,
any reference to CIT shall include any financial  institution which may become a
participant or co-lender subsequent to the Closing Date.

SECTION 9.             Powers.
                       ------
         Each  Company  hereby  constitutes  CIT, or any person or agent CIT may
designate,  as its  attorney-in-fact,  at each Companies'  cost and expense,  to
exercise  all of the  following  powers,  which being  coupled with an interest,
shall be irrevocable until all Obligations to CIT have been paid in full:

         (a) To receive,  take,  endorse,  sign, assign and deliver,  all in the
name of CIT or the  Companies  or any one of them,  any and all  checks,  notes,
drafts, and other documents or instruments relating to the Collateral;
<PAGE>

         (b) To receive, open and dispose of all mail addressed to the Companies
or any one of them and to notify  postal  authorities  to change the address for
delivery thereof to such address as CIT may designate;

         (c) To request from customers  indebted on Accounts at any time, in the
name of CIT information concerning the amounts owing on the Accounts;

         (d) To request from customers  indebted on Accounts at any time, in the
name of the  Companies  or any one of  them,  in the  name of  certified  public
accountant  designated  by CIT or in the  name of  CIT's  designee,  information
concerning the amounts owing on the Accounts;

         (e) To transmit  to  customers  indebted  on  Accounts  notice of CIT's
interest  therein and to notify  customers  indebted on Accounts to make payment
directly to CIT for the Companies' account; and

         (f) To take or bring, in the name of CIT or the Companies or any one of
them,  all steps,  actions,  suits or  proceedings  deemed by CIT  necessary  or
desirable to enforce or effect collection of the Accounts.

         Notwithstanding  anything  hereinabove  contained to the contrary,  the
powers set forth in (b), (c), (e) and (f) above may only be exercised  after the
occurrence  of an Event of Default  and until such time as such Event of Default
is waived in writing by CIT.

SECTION 10.            Events of Default and Remedies.
                       ------------------------------
         10.1  Notwithstanding  anything  hereinabove  to the contrary,  CIT may
terminate this Financing Agreement immediately upon the occurrence of any of the
following Events of Default:

         (a) cessation  of the  business  of any  Company  or the  calling  of a
             meeting  of  the   creditors   of  any  Company  for   purposes  of
             compromising the debts and obligations of such Company;

         (b) the  failure  of any  Company to  generally  meet its debts as they
             mature;

         (c) (i) the commencement by any Company of any bankruptcy,  insolvency,
             arrangement,  reorganization,  receivership or similar  proceedings
             under any federal or state law; (ii) the  commencement  against any
             Company,    of    any    bankruptcy,    insolvency,    arrangement,
             reorganization,   receivership  or  similar  proceeding  under  any
             federal or state law by creditors of such  Company,  provided  that
             such  Default  shall  not be  deemed  an Event of  Default  if such
             proceeding is  controverted  within ten (10) days and dismissed and
             vacated  within  thirty  (30) days of  commencement,  except in the

<PAGE>

             event that any of the actions sought in any such  proceeding  shall
             occur or the Company  shall take action to  authorize or effect any
             of the actions in any such proceeding; or (iii) the commencement(x)
             by C-COR de Mexico,  S.A.  de C.V.,  C-COR  Broadband  Europe BV or
             C-COR  Iberica,  SL of  any  bankruptcy,  insolvency,  arrangement,
             reorganization,   receivership  or  similar  proceeding  under  any
             applicable state law, or (y) against C-COR de Mexico, S.A. de C.V.,
             C-COR Broadband  Europe BV or C-COR Iberica,  SL of any involuntary
             bankruptcy, insolvency, arrangement,  reorganization,  receivership
             or similar  proceeding  under  applicable  law,  provided that such
             Default shall not be deemed an Event of Default if such  proceeding
             is  controverted  within  ten (10) days and  dismissed  or  vacated
             within thirty (30) days of  commencement,  except in the event that
             any of the  actions  sought in any such  proceeding  shall occur or
             C-COR de Mexico,  S.A. de C.V.,  C-COR Broadband Europe BV or C-COR
             Iberica,  SL shall take  action to  authorize  or effect any of the
             actions in any such proceeding;

         (d) breach by any Company of any warranty,  representation  or covenant
             contained  herein (other than those referred to in subparagraph (e)
             below) or in any other  written  agreement  between such Company or
             CIT,  provided  that such  Default  by such  Company  of any of the
             warranties,  representations  or covenants  referred in this clause
             (d) shall not be deemed to be an Event of Default  unless and until
             such Default shall remain  unremedied to CIT's  satisfaction  for a
             period  of  fifteen  (15) days from  after  the  earlier  of (i) an
             officer of any Company becoming aware of such breach or (ii) notice
             of such breach from CIT;

         (e) (i)  any  representation  or  warranty  made in  Paragraph  7.15 of
             Section 7 hereof shall be incorrect in any material respect or (ii)
             breach by any Company of any warranty,  representation  or covenant
             of Paragraphs 3.3 (other than the fourth sentence of Paragraph 3.3)
             and 3.4 of Section 3 hereof; Paragraphs 6.3 and 6.4 (other than the
             first  sentence of Paragraph  6.4) of Section 6 hereof;  Paragraphs
             7.1, 7.5, 7.6, 7.8 through 7.14 and 7.16 hereof;

         (f) failure  of the  Companies  or any  one of  them  to pay any of the
             Obligations  within five (5) Business Days of the due date thereof,
             provided  that nothing  contained  herein  shall  prohibit CIT from
             charging such amounts to the Revolving Loan Account on the due date
             thereof;

         (g) the  Companies  or  any  one  of  them  shall  (i)  engage  in  any
             "prohibited  transaction"  as  defined  in  ERISA,  (ii)  have  any
             "accumulated  funding  deficiency" as defined in ERISA,  (iii) have
             any  "reportable  event" as defined in ERISA,  (iv)  terminate  any
             Benefit Plan subject to the funding  requirements of Section 412 of
             the Internal  Revenue Code or (v) be engaged in any  proceeding  in
             which the Pension  Benefit  Guaranty  Corporation  shall  institute
             proceedings to terminate a Benefit Plan or seek appointment,  or is

<PAGE>

             appointed, as trustee or administrator of any Benefit Plan and with
             respect  to this  sub-paragraph  (g) such  event or  condition  (x)
             remains  uncured  for a period  of  thirty  (30)  days from date of
             occurrence and (y) could, in the reasonable opinion of CIT, subject
             any of the  Companies  to  any  tax,  penalty  or  other  liability
             material to the business,  operations or financial condition of any
             such Company;

         (h) without the prior written  consent of CIT and,  except as permitted
             in the  Subordination  Agreement,  the Companies or any one of them
             shall (x) amend or modify the  Subordinated  Debt,  or (y) make any
             payment on account of the Subordinated Debt;

         (i) the  occurrence  of any default or event of default  (after  giving
             effect  to  any  applicable   grace  or  cure  periods)  under  any
             instrument or agreement evidencing (x) Subordinated Debt or (y) any
             other  Indebtedness  of the  Companies  or any one of them having a
             principal amount in excess of $250,000; or

         (j) (i) any of the stock of Broadband  Management,  Broadband  Capital,
             Broadband  Royalty or Broadband  Network is transferred or (ii) any
             person,  firm,  entity or  corporation  shall own in the  aggregate
             (directly or indirectly)  35% or more of the issued and outstanding
             voting stock of C-COR.

         10.2 Upon the  occurrence of a Default  and/or an Event of Default,  at
the option of CIT, all loans,  advances and extensions of credit provided for in
Sections 3 and 5 of this Financing  Agreement  shall be thereafter in CIT's sole
discretion and the obligation of CIT to make  Revolving  Loans,  open Letters of
Credit and provide Letters of Credit  Guaranties shall cease unless such Default
is cured to CIT's satisfaction or Event of Default is waived in writing by CIT ,
and at the option of CIT upon the  occurrence  of an Event of  Default:  (a) all
Obligations  shall become  immediately  due and payable;  (b) CIT may charge the
Companies  the Default Rate of Interest on all then  outstanding  or  thereafter
incurred  Obligations in lieu of the interest  provided for in Section 8 of this
Financing  Agreement,  provided that,  with respect to this clause "(b)" CIT has
given the Companies written notice of the Event of Default;  provided,  however,
that no  notice  is  required  if the Event of  Default  is the Event  listed in
Paragraph 10.1(c) of this Section 10; and (c) CIT may immediately terminate this
Financing Agreement upon notice to the Companies;  provided,  however, that upon
the  occurrence  of an Event of  Default  listed in  Paragraph  10.1(c)  of this
Section 10, this  Financing  Agreement  shall  automatically  terminate  and all
Obligations  shall  become due and  payable,  without any  action,  declaration,
notice or demand by CIT.  The  exercise  of any option is not  exclusive  of any
other option, which may be exercised at any time by CIT.

         10.3 Immediately upon the occurrence of any Event of Default,  CIT may,
to the extent  permitted by law: (a) remove from any premises  where same may be
located any and all books and records, computers,  electronic media and software
programs  associated  with any Collateral  (including  any  electronic  records,
contracts and signatures pertaining thereto), documents,  instruments, files and

<PAGE>

records,  and any  receptacles  or  cabinets  containing  same,  relating to the
Accounts,  or CIT may use, at the  Companies'  expense,  such of the  Companies'
personnel,  supplies or space at the Companies' places of business or otherwise,
as may be  necessary  to properly  administer  and  control the  Accounts or the
handling of collections and realizations thereon; (b) bring suit, in the name of
the Companies or CIT, and generally shall have all other rights  respecting said
Accounts,  including  without  limitation the right to: accelerate or extend the
time of  payment,  settle,  compromise,  release in whole or in part any amounts
owing on any Accounts and issue credits in the name of the Companies or CIT; (c)
sell,  assign  and  deliver  the  Collateral  and  any  returned,  reclaimed  or
repossessed Inventory, with or without advertisement, at public or private sale,
for cash, on credit or otherwise,  at CIT's sole option and discretion,  and CIT
may bid or  become  a  purchaser  at any  such  sale,  free  from  any  right of
redemption,  which  right is  hereby  expressly  waived  by the  Companies;  (d)
foreclose the security interests in the Collateral created herein or by the Loan
Documents by any available judicial  procedure,  or to take possession of any or
all  of  the  Collateral,   including  any  Inventory,  Equipment  and/or  Other
Collateral  without  judicial  process,  and to enter  any  premises  where  any
Inventory and Equipment  and/or Other  Collateral may be located for the purpose
of taking  possession  of or removing the same and (e) exercise any other rights
and remedies  provided in law, in equity,  by contract or  otherwise.  CIT shall
have the right,  without notice or  advertisement,  to sell, lease, or otherwise
dispose of all or any part of the  Collateral,  whether in its then condition or
after further preparation or processing, in the name of the Companies or CIT, or
in the name of such  other  party as CIT may  designate,  either  at  public  or
private  sale or at any  broker's  board,  in lots or in  bulk,  for cash or for
credit, with or without warranties or representations (including but not limited
to warranties of title, possession, quiet enjoyment and the like), and upon such
other terms and conditions as CIT in its sole discretion may deem advisable, and
CIT shall have the right to  purchase  at any such sale.  If any  Inventory  and
Equipment shall require rebuilding,  repairing,  maintenance or preparation, CIT
shall  have  the  right,  at its  option,  to do  such  of the  aforesaid  as is
necessary,  for the  purpose of putting  the  Inventory  and  Equipment  in such
saleable form as CIT shall deem  appropriate  and any such costs shall be deemed
an  Obligation  hereunder.  Any action taken by CIT  pursuant to this  paragraph
shall not effect commercial  reasonableness of the sale. The Companies agree, at
the request of CIT, to  assemble  the  Inventory  and  Equipment  and to make it
available to CIT at premises of the Companies or elsewhere and to make available
to CIT the premises and  facilities  of the  Companies  for the purpose of CIT's
taking  possession  of,  removing  or putting the  Inventory  and  Equipment  in
saleable  form. If notice of intended  disposition of any Collateral is required
by law,  it is agreed  that ten (10) days  notice  shall  constitute  reasonable
notification  and full compliance with the law. The net cash proceeds  resulting
from  CIT's  exercise  of any of the  foregoing  rights,  (after  deducting  all
charges,  costs and expenses,  including  reasonable  attorneys'  fees) shall be
applied by CIT to the payment of the Obligations,  whether due or to become due,
in such order as CIT may elect, and the Companies shall remain liable to CIT for
any  deficiencies,  and CIT in turn  agrees to remit to the  Companies  or their
successors or assigns, any surplus resulting  therefrom.  The enumeration of the
foregoing  rights is not intended to be exhaustive and the exercise of any right
shall not  preclude  the  exercise  of any other  rights,  all of which shall be
cumulative. The Companies hereby indemnifies CIT and holds CIT harmless from any

<PAGE>

and  all  costs,  expenses,  claims,  liabilities,   Out-of-Pocket  Expenses  or
otherwise,  incurred  or imposed on CIT by reason of the  exercise of any of its
rights, remedies and interests hereunder,  including,  without limitation,  from
any sale or transfer of  Collateral,  preserving,  maintaining  or securing  the
Collateral,  defending its interests in  Collateral  (including  pursuant to any
claims  brought by the  Companies,  the Companies as  debtor-in-possession,  any
secured or  unsecured  creditors  of the  Companies,  any trustee or receiver in
bankruptcy,  or otherwise),  and the Companies  hereby agree to so indemnify and
hold CIT  harmless,  absent  CIT's gross  negligence  or willful  misconduct  as
finally  determined  by  a  court  of  competent  jurisdiction.   The  foregoing
indemnification shall survive termination of this Financing Agreement until such
time  as all  Obligations  (including  the  foregoing)  have  been  finally  and
indefeasibly  paid in full.  In  furtherance  thereof  CIT, may  establish  such
reserves for Obligations hereunder (including any contingent  Obligations) as it
may  deem  advisable  in  its  reasonable  business  judgement.  Any  applicable
mortgage(s),  deed(s) of trust or assignment(s) issued to CIT on the Real Estate
shall govern the rights and remedies of CIT thereto.

SECTION 11.            Termination.
                       -----------
         Except as otherwise  permitted herein, CIT may terminate this Financing
Agreement  only as of the initial or any  subsequent  Anniversary  Date and then
only by giving the  Companies at least sixty (60) days prior  written  notice of
termination.  Notwithstanding  the  foregoing  CIT may  terminate  the Financing
Agreement  immediately  upon the  occurrence  of an Event of Default,  provided,
however, that if the Event of Default is an event listed in Paragraph 10.1(c) of
Section 10 of this Financing Agreement, this Financing Agreement shall terminate
in  accordance  with  paragraph  10.2 of Section 10. The Companies or any one of
them may terminate  this  Financing  Agreement at any time upon sixty (60) days'
prior written notice to CIT,  provided that the Companies pay to CIT immediately
on demand an Early  Termination  Fee, if applicable.  Notice of termination,  as
aforesaid,  by any one Company shall be deemed to be notice by the Companies for
purposes  hereof.  All  Obligations  shall  become  due  and  payable  as of any
termination   hereunder  or  under  Section  10  hereof  and,  pending  a  final
accounting,  CIT may  withhold any balances in the  Companies'  account  (unless
supplied with an indemnity satisfactory to CIT) to cover all of the Obligations,
whether absolute or contingent, including, but not limited to, cash reserves for
any  contingent  Obligations,  including an amount of 110% of the face amount of
any outstanding  Letters of Credit with an expiry date on, or within thirty (30)
days of the effective date of termination  of this Financing  Agreement.  All of
CIT's rights,  liens and security interests shall continue after any termination
until all Obligations have been paid and satisfied in full.

SECTION 12.            Miscellaneous.
                       -------------
         12.1 Each of the Companies hereby waives diligence, notice of intent to
accelerate,  notice of  acceleration,  demand,  presentment  and protest and any
notices thereof as well as notice of nonpayment.  No delay or omission of CIT or
the Companies to exercise any right or remedy hereunder, whether before or after

<PAGE>

the  happening  of any Event of  Default,  shall  impair any such right or shall
operate  as a waiver  thereof or as a waiver of any such  Event of  Default.  No
single or partial  exercise by CIT of any right or remedy precludes any other or
further exercise thereof, or precludes any other right or remedy.

         12.2 This  Financing  Agreement  and the Loan  Documents  executed  and
delivered in connection  therewith  constitute the entire agreement  between the
Companies  and CIT;  supersede  any prior  agreements;  can be changed only by a
writing  signed by both the  Companies  and CIT;  and shall bind and benefit the
Companies and CIT and their respective successors and assigns.

         12.3 In no event shall the Companies, upon demand by CIT for payment of
any Indebtedness  relating hereto, by acceleration of the maturity  thereof,  or
otherwise,  be  obligated  to pay  interest  and fees in  excess  of the  amount
permitted by law. Regardless of any provision herein or in any agreement made in
connection herewith, CIT shall never be entitled to receive, charge or apply, as
interest  on any  indebtedness  relating  hereto,  any  amount  in excess of the
maximum  amount  of  interest  permissible  under  applicable  law.  If CIT ever
receives,  collects  or applies  any such  excess,  it shall be deemed a partial
repayment  of principal  and treated as such;  and if principal is paid in full,
any remaining  excess shall be refunded to the Companies.  This paragraph  shall
control  every  other  provision  hereof,  the Loan  Documents  and of any other
agreement made in connection herewith.

         12.4  If  any  provision  hereof  or of any  other  agreement  made  in
connection herewith is held to be illegal or unenforceable, such provision shall
be fully  severable,  and the remaining  provisions of the applicable  agreement
shall  remain  in full  force and  effect  and  shall  not be  affected  by such
provision's severance.  Furthermore,  in lieu of any such provision, there shall
be  added  automatically  as a part of the  applicable  agreement  a  legal  and
enforceable  provision  as similar in terms to the severed  provision  as may be
possible.

         12.5 EACH OF THE  COMPANIES  AND CIT EACH  HEREBY  WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING  ARISING OUT OF THE LOAN  DOCUMENTS OR
THE  TRANSACTIONS   CONTEMPLATED  THEREUNDER.   EACH  OF  THE  COMPANIES  HEREBY
IRREVOCABLY  WAIVES  PERSONAL  SERVICE OF  PROCESS  AND  CONSENTS  TO SERVICE OF
PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT  REQUESTED.  IN NO EVENT
WILL CIT BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.

         12.6  Except  as  otherwise  herein  provided,   any  notice  or  other
communication  required  hereunder  shall  be in  writing  (provided  that,  any
electronic communications from any of the Companies with respect to any request,
transmission,  document,  electronic  signature,  electronic  mail or  facsimile
transmission  shall be deemed  binding on the  Companies  for  purposes  of this
Financing  Agreement,  provided  further  that any such  transmission  shall not
relieve the Companies from any other obligation hereunder to communicate further
in writing), and shall be deemed to have been validly served, given or delivered
when hand  delivered or sent by  facsimile,  or three days after  deposit in the

<PAGE>

United State mails, with proper first class postage prepaid and addressed to the
party to be notified or to such other  address as any party hereto may designate
for itself by like notice, as follows:

         (A) if to CIT, at:

                  The CIT Group/Business Credit, Inc.
                  Two Wachovia Center, 23rd Floor
                  301 South Tryon Street
                  Charlotte, North Carolina 28202
                  Attn:  Regional Credit Manager
                  Fax No.:  704-339-2283

         (B) if to the Companies at:

                  c/o
                  C-COR.NET CORP.
                  60 Decibel Road
                  State College, PA 16801
                  Attn: William Hanelly
                  Fax No.: 814-278-6501

With a courtesy copy of any material notice to the Companies' counsel at:
                  Ballard, Spahr, Andrews & Ingersoll, LLP
                  1735 Market Street, 51st Floor
                  Philadelphia, PA 19103-7599
                  Attn:  Carolan Berkley
                  Fax No.  215-864-8999

provided,  however,  that the failure of CIT to provide the  Companies'  counsel
with a copy  of such  notice  shall  not  invalidate  any  notice  given  to the
Companies and shall not give the Companies any rights, claims or defenses due to
the failure of CIT to provide such additional notice.

          12.7 THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS FINANCING
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NORTH CAROLINA, EXCEPT TO THE EXTENT THAT ANY OTHER LOAN DOCUMENT
INCLUDES AN EXPRESS ELECTION TO BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION.



<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Financing
Agreement to be effective, executed, accepted and delivered, by their proper and
duly authorized officers as of the date set forth above.



C-COR.NET CORP                                  THE CIT GROUP/
                                                BUSINESS CREDIT, INC.

By: /s/  W.T. Hanelly                         By: /s/ James D. Danforth, Jr.
    ------------------------                     -------------------------------
Title: Chief Financial Officer                     Vice President

BROADBAND MANAGEMENT SOLUTIONS, LLC


By: /s/  W.T. Hanelly
    ------------------------
Title: Chief Financial Officer
BROADBAND CAPITAL CORPORATION


By: /s/ George M. Savereno
    ------------------------
Title: President

BROADBAND ROYALTY CORPORATION


By: /s/ George M. Savereno
    ------------------------
Title: President

BROADBAND NETWORK SERVICES, INC.

By: /s/  W.T. Hanelly
    ------------------------
Title: Chief Financial Officer





<PAGE>


                       Schedule 1 - Collateral Information
                       -----------------------------------

                       Schedule 1 - Collateral Information
                       -----------------------------------

Exact Company Name in State of Organization:
-------------------------------------------
         C-COR.net Corp.

State Of Incorporation or Formation:
-----------------------------------
         Pennsylvania

Federal Tax I.D. No. and State Organization No.
-----------------------------------------------
         Federal    24-0811591
         State      2898203

Chief Executive Office:
----------------------
         60 Decibel Road
         State College, PA 16801

Collateral Locations:
--------------------
         875 Research Parkway
         Meriden, CT 06450

         101 N. Plains Industrial Rd.
         Wallingford, CT 06450

         1515 Elizabeth Avenue
         Linden, NJ  07036

         60 Decibel Road
         State College, PA 16801

         Av. La Paz 2713-B
         Tijuana, BC., C.P. 93065
         Mexico

         999 Research Parkway
         Meriden, CT 06450

         100 Fairgrounds Dr.
         Manlius, NY 13104

         621 East Brighton
         Syracuse, New York 13210



<PAGE>


                       Schedule 1 - Collateral Information
                       -----------------------------------

Exact Company Name in State of Organization:
-------------------------------------------
         Broadband Management Solutions, LLC

State of Incorporation or Formation:
-----------------------------------
         Delaware

Federal Tax I.D. No. and State Organization No.
-----------------------------------------------
         Federal    25-1891946
         State      2801553

Chief Executive Office:
----------------------
         5673 Gibraltar Drive
         Pleasanton, CA 94588

Collateral Locations:
--------------------
         5673 Gibraltar Drive
         Pleasanton, CA 94588

         60 Decibel Road
         State College, PA 16801

         3950 Johns Creek
         Court, Suite 300
         Suwannee, GA 30024



<PAGE>



                       Schedule 1 - Collateral Information
                       -----------------------------------

Exact Company Name in State of Organization:
-------------------------------------------
         Broadband Royalty Corporation

State of Incorporation or Formation:
-----------------------------------
         Delaware

Federal Tax I.D. No. and State Organization No.
-----------------------------------------------
         Federal    51-0312863
         State      2172323

Chief Executive Office:
----------------------
         1105 North Market Street, Suite 1300
         Wilmington, DE 19899

Collateral Locations:
--------------------
         1105 North Market Street Suite 1300
         Wilmington, DE 19899


<PAGE>


                       Schedule 1 - Collateral Information
                       -----------------------------------

Exact Company Name in State of Organization:
-------------------------------------------
         Broadband Capital Corporation

State of Incorporation or Formation:
-----------------------------------
         Delaware

Federal Tax I.D. No. and State Organization No.
-----------------------------------------------
         Federal    51-0267815
         State      2290293

Chief Executive Office:
----------------------
         1105 North Market Street Suite 1300
         Wilmington, DE 19899

Collateral Locations:
--------------------
         1105 North Market Street Suite 1300
         Wilmington, DE 19899


<PAGE>


                       Schedule 1- Collateral Information
                       ----------------------------------

Exact Company Name in State of Organization:
-------------------------------------------
         Broadband Network Services, Inc.

State of Incorporation or Formation:
-----------------------------------
         Delaware

Federal Tax I.D. No. and State Organization No.
-----------------------------------------------
         Federal    62-1583846
         State      295549

Chief Executive Office:
-----------------------
         141 Union Boulevard, Suite 475
         Lakewood, CO 80228

         Effective December 1, 2002:
         300 Union Boulevard, Suite 515
         Lakewood, CO 80228

Collateral Locations
--------------------
         141 Union Boulevard, Suite 475          10315 Hershdale Road
         Lakewood, CO 80228                      Truckee, CA 96160

         1808 Patricia Ave.                      601 Sanderson Ave.
         Simi Valley, CA 93065                   Hemet, CA 92545

         12155 Magnolia Ave., Bldg 9-B
         Riverside, CA 92503

         2927 Northwest Park Drive
         Knoxville, TN 37921

         5991 Meijer Square Dr., Suite 17
         Milford, OH 45150

         608 North Main
         Goodlettsville, TN 37072

         60 Decibel Road
         State College, PA 16801

         367 Phoenix Ave.
         Bellefonte, PA 16823








<PAGE>

                  Schedule 2 - Real Estate Subject to Mortgages
                  ---------------------------------------------


</TEXT>
</DOCUMENT>
