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<SEC-DOCUMENT>0000944075-10-000006.txt : 20100308
<SEC-HEADER>0000944075-10-000006.hdr.sgml : 20100308
<ACCEPTANCE-DATETIME>20100308155903
ACCESSION NUMBER:		0000944075-10-000006
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20100303
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Other Events
FILED AS OF DATE:		20100308
DATE AS OF CHANGE:		20100308

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SOCKET MOBILE, INC.
		CENTRAL INDEX KEY:			0000944075
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPUTERS [3571]
		IRS NUMBER:				943155066
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25904
		FILM NUMBER:		10663809

	BUSINESS ADDRESS:	
		STREET 1:		39700 EUREKA DRIVE
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560-4808
		BUSINESS PHONE:		5109333000

	MAIL ADDRESS:	
		STREET 1:		39700 EUREKA DRIVE
		CITY:			NEWARK
		STATE:			CA
		ZIP:			94560-4808

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SOCKET COMMUNICATIONS INC
		DATE OF NAME CHANGE:	19950418
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form-8k0303.htm
<DESCRIPTION>8-K
<TEXT>
<html>
<head>

</head>

<body bgcolor="#FFFFFF">
<div align=left>
  <hr width="100%">
  <div align=center>
    <hr width="100%">
    <p><font face="Times New Roman, Times, serif" size="3"><b><font size="5">UNITED
      STATES<br>
      </font></b><font size="5"><strong>SECURITIES AND EXCHANGE COMMISSION</strong></font></font></p>
  </div>
</div>
<p align=center><font face="Times New Roman, Times, serif" size="3">Washington,
  DC 20549</font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3">__________________________</font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"> <b><font size="5">FORM
  8-K</font></b><br>
  <br>
  <b>CURRENT REPORT</b><br>
  <br>
  Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934<br>
  <b><br>
  </b></font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>March 3</b></font><font face="Times New Roman, Times, serif"><b><font size=3>,
  2010</font></b><font size=3><br>
  <font size="2">Date of Report</font><br>
  <font size="2">(Date of earliest event reported)</font></font></font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><br>
  </font></p>
<p align=center><font face="Times New Roman, Times, serif" size="5"><strong><font size="6">SOCKET
  MOBILE, INC.</font></strong></font><font face="Times New Roman, Times, serif"><br>
  <font size=2>(Exact name of registrant as specified in its charter) </font></font></p>
<p>&nbsp;
<table cols=3 width="100%">
  <tr>
    <td height=28 width="34%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>Delaware<br>
        </b></font><font face="Times New Roman, Times, serif" size=2>(State or
        other jurisdiction of incorporation)</font><font face="Times New Roman, Times, serif" size=3><b>
        </b> </font>
      </center>
    </td>
    <td height=28 width="32%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>001-13810<br>
        </b></font><font face="Times New Roman, Times, serif" size=2>(Commission
        File Number)</font><font face="Times New Roman, Times, serif" size=3><b>
        </b></font>
      </center>
    </td>
    <td height=28 width="34%">
      <center>
        <font face="Times New Roman, Times, serif" size=3><b>94-3155066</b><br>
        </font><font face="Times New Roman, Times, serif" size=2>(IRS Employer
        Identification No.)</font><font face="Times New Roman, Times, serif" size=3>
        </font>
      </center>
    </td>
  </tr>
</table>
<font face="Times New Roman, Times, serif"><br>
</font>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>39700 Eureka
  Drive <br>
  Newark, CA 94560</b></font><font face="Times New Roman, Times, serif"><br>
  <font size=2>(Address of principal executive offices, including zip code) </font></font></p>
<p align=center><font face="Times New Roman, Times, serif" size="3"><b>(510) 933-3000<br>
  </b></font> <font face="Times New Roman, Times, serif"><font size="2">(Registrant's
  telephone number, including area code)</font></font>
<div align="center">
  <p>&nbsp;</p>
  <p align="left">Check the appropriate box below if the Form 8-K filing is intended
    to simultaneously satisfy the filing obligation of the registrant under any
    of the following provisions (see General Instruction A.2. below):</p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Written communications pursuant to Rule 425 under the Securities Act (17
    CFR 230.425)</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))</font></font></p>
  <p align="left"><font face="Times New Roman, Times, serif"><font size="3">[
    ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))<br>
    <br>
    </font></font></p>
</div>
<p style="PAGE-BREAK-BEFORE: always"> </p>
<div align=left></div>
<div align=left>
  <hr width="100%">
  <div align=center>
    <hr width="100%">
  </div>
</div>
<p><br>
  <font face="Times New Roman, Times, serif"><b><br>
  Item 1.01 Entry into Material Definitive Agreements</b><br>
  </font></p>
<p>Item 8.01 below is incorporated by reference herein in its entirety.</p>
<p><b>Item 8.01 Other Events</b></p>
<p>On March 3, 2010, Socket Mobile, Inc. (the &quot;Company&quot;) and Silicon
  Valley Bank (the &quot;Lender&quot;) entered into a First Amendment to Forbearance
  Agreement (the &quot;Amendment&quot;), which amends (i) the Forbearance Agreement,
  dated February 4, 2010, between the Company and the Lender (the &quot;Forbearance
  Agreement&quot;), and (ii) the Second Amended and Restated Loan and Security
  Agreement, dated as of December 24, 2008 between the Company and the Lender,
  as amended, and the Second Amended and Restated Export-Import Bank Loan and
  Security Agreement, dated as of December 24, 2008, between the Company and the
  Lender, as amended (together the &quot;Loan Agreements&quot;).</p>
<p>The Amendment extends the period under the Forbearance Agreement that the Lender
  has agreed to forbear from enforcing its rights and remedies under the Loan
  Agreements through April 30, 2010, and provides that the Lender will waive the
  existing event of default under the Loan Agreements if the Company meets the
  requisite financial covenants on March 31, 2010 as described below.</p>
<p>The Amendment also extends the maturity date for the borrowings under the Loan
  Agreements from March 24, 2010 to March 23, 2011 and amends the financial covenants
  in the Loan Agreements to provide that the Company must comply with the following:
</p>
<blockquote>
  <p>(a) maintain at all times a minimum balance of unrestricted cash and cash
    equivalents of no less than $1,000,000; and </p>
  <p>(b) achieve minimum revenues of at least $4,565,000 for the quarter ending
    March 31, 2010; $5,495,000 for the quarter ending June 30, 2010; $6,115,000
    for the quarter ending September 30, 2010; and $6,265,000 for the quarter
    ending December 31, 2010.</p>
</blockquote>
<p>Should we fail to meet any of these financial covenants, such failure would
  constitute an event of default under the Loan Agreements, and the Lender may,
  among its remedies, declare all obligations under the Loan Agreements immediately
  due and payable and terminate the Loan Agreements and the Forbearance Agreement.
</p>
<p>On January 29, 2010, we reported on Form 8-K dated January 29, 2010 and filed
  on February 4, 2010 that we were out of compliance with the revenue covenant
  in the Loan Agreements for the quarter ended December 31, 2009 which constituted
  an event of default under the Loan Agreements. We reported that we were advised
  by the Lender that it would forbear any actions relating to the event of default
  through March 24, 2010. We subsequently signed a Forbearance Agreement to reflect
  these decisions which is enclosed as Exhibit 10.2 to this Form 8-K.</p>
<p>The foregoing descriptions of the Amendment and the Forbearance Agreement do
  not purport to be complete and are qualified in their entirety by reference
  to the full texts of the Amendment and the Forbearance Agreement, copies of
  which are attached hereto as Exhibit 10.1 and Exhibit 10.2 and are incorporated
  herein by reference. </p>
<p>&nbsp;</p>
<p align="center">1<br>
</p>
<hr width="100%">
<p><font face="Times New Roman, Times, serif"><b>Item 9.01 Financial Statements
  and Exhibits</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif"><b>(d) Exhibits.</b></font></p>
<table cellspacing=0 cellpadding=0 width="70%" align=left border=0>
  <tr valign=bottom>
    <td align="left" height="54" width="215" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div align="center" class="border">Exhibit No.</div>
      </div>
    </td>
    <td width=29 height=54>&nbsp;</td>
    <td align="left" height="54" width="680" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div class="border">
          <div align="center">Description</div>
        </div>
      </div>
    </td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">
      <div align=center><font
      face="Times New Roman, Times, serif">10.1</font></div>
    </td>
    <td width=29 height="22">&nbsp;</td>
    <td width=680 height="22">First Amendment to Forbearance Agreement, dated
      March 3, 2010, between Socket Mobile, Inc. and Silicon Valley Bank.</td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">
      <div align=center><font
      face="Times New Roman, Times, serif">10.2</font></div>
    </td>
    <td width=29 height="22">&nbsp;</td>
    <td width=680 height="22">Forbearance Agreement, dated February 4, 2010, between
      Socket Mobile, Inc. and Silicon Valley Bank.</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p><font face="Times New Roman, Times, serif"><br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  </font></p>
<p align="center">2<br>
</p>
<hr width="100%">
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif"><b>SIGNATURES</b><br>
  </font></p>
<p>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant
  has duly caused this report to be signed on its behalf by the undersigned hereunto
  duly authorized.</p>
<p>&nbsp;</p>
<dir>
  <dir>
    <dir>
      <dir>
        <dir>
          <blockquote>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <tr>
              <td>&nbsp;</td>
              <td>&nbsp;</td>
            </tr>
            <p align=left> </p>
            <tr valign="bottom"
align="left"></tr>
          </blockquote>
        </dir>
      </dir>
    </dir>
  </dir>
</dir>
<div align=left>
  <table height=135 cellspacing=0 cellpadding=0 width=96% align=left border=0>
    <tr>
      <td width=300>&nbsp;</td>
      <td width=21>&nbsp;</td>
      <td colspan="2"><font face="Times New Roman, Times, serif"><b>SOCKET MOBILE,
        INC.</b></font></td>
    </tr>
    <tr>
      <td width=300>&nbsp;</td>
      <td width=21>&nbsp;</td>
      <td colspan="2">&nbsp;</td>
    </tr>
    <tr>
      <td width=300>
        <div align=left></div>
      </td>
      <td width=21>&nbsp;</td>
      <td colspan="2">&nbsp;</td>
    </tr>
    <tr>
      <td width=300 height=19>
        <div align=left><font face="Times New Roman, Times, serif">Date: March
          8, 2010</font></div>
      </td>
      <td width=21 height=19>&nbsp;</td>
      <td width=30 height=19><font face="Times New Roman, Times, serif">By: <u>/s/
        </u></font></td>
      <td width=379 height=19><font face="Times New Roman, Times, serif"><u>David
        W. Dunlap</u></font></td>
    </tr>
    <tr>
      <td width=300 height=40>
        <div align=left></div>
      </td>
      <td width=21 height=40>&nbsp;</td>
      <td width=30 height=40>
        <blockquote>
          <div align="left"></div>
        </blockquote>
      </td>
      <td width=379 height=40><font face="Times New Roman, Times, serif">David
        W. Dunlap<br>
        Vice President, Finance and Administration <br>
        and Chief Financial Officer</font></td>
    </tr>
  </table>
</div>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p><br>
  <br>
  <br>
  <br>
  <br>
  <br>
</p>
<p align="center">3</p>
<hr>
<p>&nbsp;</p>
<p align="center"><b>EXHIBIT INDEX</b></p>
<p>&nbsp;</p>
<table cellspacing=0 cellpadding=0 width="70%" align=left border=0>
  <tr valign=bottom>
    <td align="left" height="54" width="215" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div align="center" class="border">Exhibit No.</div>
      </div>
    </td>
    <td width=29 height=54>&nbsp;</td>
    <td align="left" height="54" width="680" style="border-bottom: 1px solid #000000" class="border">
      <div style="margin-left: 10px; text-indent: -10px">
        <div class="border">
          <div align="center">Description</div>
        </div>
      </div>
    </td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">
      <div align=center><font
      face="Times New Roman, Times, serif">10.1</font></div>
    </td>
    <td width=29 height="22">&nbsp;</td>
    <td width=680 height="22">First Amendment to Forbearance Agreement, dated
      March 3, 2010, between Socket Mobile, Inc. and Silicon Valley Bank.</td>
  </tr>
  <tr valign=top>
    <td width=215 height="22">
      <div align=center><font
      face="Times New Roman, Times, serif">10.2</font></div>
    </td>
    <td width=29 height="22">&nbsp;</td>
    <td width=680 height="22">Forbearance Agreement, dated February 4, 2010, between
      Socket Mobile, Inc. and Silicon Valley Bank.</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">4</p>
<hr>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex101.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<html>
<head>
<title>Untitled Document</title>
</head>

<body bgcolor="#FFFFFF">
<p align="right"><font face="Times New Roman, Times, serif"><b>Exhibit 10.1</b></font></p>
<p align="center"><font face="Times New Roman, Times, serif"><br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif"><b><u>FIRST AMENDMENT
  TO FORBEARANCE AGREEMENT</u></b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">THIS FIRST AMENDMENT TO FORBEARANCE
  AGREEMENT (this &quot;<b>Amendment</b>&quot;) is executed and effective this
  3rd day of March, 2010 (the &quot;<b>Effective Date</b>&quot;), by and between
  SILICON VALLEY BANK, a California corporation (&quot;<b>Bank</b>&quot;) with
  its principal place of business of 3003 Tasman Drive, Santa Clara, California
  95054 and SOCKET MOBILE, INC., a Delaware corporation (&quot;<b>Borrower</b>&quot;)
  with its principal place of business of 39700 Eureka Drive, Newark, California
  94560. </font></p>
<p align="center"><font face="Times New Roman, Times, serif"><b><br>
  RECITALS</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">A. Pursuant to the terms and subject
  to the conditions of that certain Forbearance Agreement dated February 4, 2010
  by and between Bank and Borrower (as amended, modified, supplemented or restated,
  the &quot;<b>Forbearance Agreement</b>&quot;), Bank agreed to forbear from exercising
  its rights and remedies under the Loan Documents and EXIM Loan Documents through
  March 24, 2010 (the &quot;<b>Prior Forbearance Period</b>&quot;) as a result
  of the Existing Event of Default.<br>
  </font></p>
<p><font face="Times New Roman, Times, serif">B. Borrower has requested that Bank
  amend the Forbearance Agreement to extend the Prior Forbearance Period. Although
  Bank is under no obligation to do so, Bank is willing to extend the Prior Forbearance
  Period and to continue to forbear from exercising its rights and remedies against
  Borrower through the Forbearance Period (as extended below), but only to the
  extent, in accordance with the terms, subject to the conditions and in reliance
  upon the representations and warranties set forth below.<br>
  </font></p>
<p><font face="Times New Roman, Times, serif"><b>NOW</b>, <b>THEREFORE</b>, in
  consideration of the agreements and covenants contained herein, and for good
  and valuable consideration, the receipt and sufficiency of which are hereby
  acknowledged, the parties hereto agree as follows:<br>
  </font></p>
<p><font face="Times New Roman, Times, serif">1. <u>Incorporation by Reference;
  Acknowledgement of Recitals</u>. Borrower acknowledges the recitals set forth
  herein and the description of the Existing Event of Default set forth above
  are true and correct statements of fact, are incorporated herein, and form a
  substantive part of this Amendment.<br>
  </font></p>
<p>2. <u>Definitions</u>. Capitalized terms used but not defined in this Amendment,
  including its preamble and recitals, shall have the meanings given to them in
  the Forbearance Agreement and the Loan Agreements.</p>
<p>3. <u>Ratification of Loan Documents and EXIM Loan Documents; Further Assurances</u>.</p>
<blockquote>
  <p>a. Borrower acknowledges and agrees that each of the Loan Documents and EXIM
    Loan Documents remain in full force and effect in accordance with the original
    terms, except as expressly amended and modified by this Amendment.</p>
  <p><font face="Times New Roman, Times, serif">b. Borrower hereby ratifies, confirms,
    and reaffirms that the Obligations include, without limitation, the Loans,
    and any future modifications, amendments, substitutions or renewals thereof.<br>
    </font></p>
  <p>&nbsp;</p>
</blockquote>
<p align="center"><font face="Times New Roman, Times, serif">1</font></p>
<hr>
<blockquote>
  <p>c. Borrower hereby agrees that this Amendment is the legal, valid and binding
    obligation of Borrower, enforceable against Borrower.</p>
  <p><font face="Times New Roman, Times, serif">d. Borrower and Bank acknowledge
    that the Existing Event of Default is ongoing, existing and a continuing Event
    of Default under the Loan Agreements.</font></p>
  <p><font face="Times New Roman, Times, serif">e. Borrower and Bank confirm that
    neither party has heretofore waived and has not agreed to waive any term of
    the Loan Documents or EXIM Loan Documents, and any actions that Borrower takes
    or fails to take (including the expenditure of any funds) is voluntary, informed
    and taken at its own risk.</font></p>
  <p><font face="Times New Roman, Times, serif">f. Borrower shall, from and after
    the execution of this Amendment, execute and deliver to Bank whatever additional
    documents, instruments, and agreements that Bank may reasonably require in
    order to perfect the Collateral granted in the Loan Agreements more securely
    in Bank and to otherwise give effect to the terms and conditions of this Amendment.</font></p>
</blockquote>
<p><font face="Times New Roman, Times, serif">4. <u>Conditions Precedent</u>.
  The effectiveness of this Amendment is subject to the satisfaction of each of
  the following conditions precedent:</font></p>
<blockquote>
  <p><font face="Times New Roman, Times, serif">a. This Amendment shall be executed
    by all parties and delivered to Bank; and</font></p>
  <p><font face="Times New Roman, Times, serif">b. Borrower's payment of a non-refundable
    amendment fee in an amount equal to Twenty-Five Thousand Dollars ($25,000)
    (inclusive of the fee for the EXIM Bank) and all legal fees and expenses of
    Bank shall have been paid in full, in connection with the preparation, negotiation,
    execution and delivery of this Amendment and the Forbearance Documents. Borrower
    hereby authorizes Bank to debit the deposit account maintained by Borrower
    with Bank for all such amounts.</font></p>
</blockquote>
<p><font face="Times New Roman, Times, serif">5. <u>Forbearance Period</u>. Subject
  to Borrower's strict compliance and performance with the terms of the Forbearance
  Agreement and this Amendment and so long as no Event of Default (other than
  the Existing Event of Default) or Termination Event (as hereinafter defined)
  occurs, Bank will forbear from enforcing its rights and remedies under the Loan
  Documents and EXIM Loan Documents through April 30, 2010 (the &quot;<b>Forbearance
  Period</b>&quot;). If Borrower is in compliance with the financial covenant
  set forth in Section 6(a) below for the quarter ending March 31, 2010, Bank
  will agree to waive the Existing Event of Default. Except as expressly provided
  herein, this Amendment does not constitute a waiver or release by Bank of any
  Obligations or of any Event of Default which may arise in the future after the
  Effective Date.</font></p>
<p>6. <u>Amendments to Domestic Loan Agreement</u>.</p>
<blockquote>
  <p>a. Bank and Borrower hereby agree that from and after the Effective Date,
    Borrower shall maintain at all times, to be tested as of the last day of each
    fiscal quarter, revenue of not less than the following amounts during the
    following fiscal quarters:</p>
  <p><br>
  </p>
</blockquote>
<table width="40%" border="1" cellspacing="0" cellpadding="0" align="center">
  <tr>
    <td>
      <div align="center"><font face="Times New Roman, Times, serif"><b><u>Quarter
        Ending</u></b></font></div>
    </td>
    <td>
      <div align="center"><font face="Times New Roman, Times, serif"><b><u>Minimum
        Revenue</u></b></font></div>
    </td>
  </tr>
  <tr>
    <td>March 31, 2010</td>
    <td>
      <div align="center"><font face="Times New Roman, Times, serif">$4,565,000</font></div>
    </td>
  </tr>
  <tr>
    <td>June 30, 2010</td>
    <td>
      <div align="center"><font face="Times New Roman, Times, serif">$5,495,000</font></div>
    </td>
  </tr>
  <tr>
    <td>September 30, 2010</td>
    <td>
      <div align="center"><font face="Times New Roman, Times, serif">$6,115,000</font></div>
    </td>
  </tr>
  <tr>
    <td>December 31, 2010</td>
    <td align="left" valign="top">
      <div align="center"><font face="Times New Roman, Times, serif">$6,265,000</font></div>
    </td>
  </tr>
</table>
<p><font face="Times New Roman, Times, serif"><br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif">2</font></p>
<hr>
<blockquote>
  <p>b. Bank and Borrower hereby agree that from and after the Effective Date,
    all references to the term &quot;Maturity Date&quot; in the Domestic Loan
    Agreement shall mean March 23, 2011. Bank's agreement to extend the Maturity
    Date in the Domestic Loan Agreement does not constitute an agreement to extend
    the Forbearance Period. Unless the Existing Event of Default is waived by
    Bank, upon the expiration of the Forbearance Period, all outstanding Obligations
    owed by Borrower to Bank shall be due and payable in full.</p>
  <p>c. Bank and Borrower hereby agree that from and after the Effective Date,
    all references to the term &quot;Compliance Certificate&quot; in the Domestic
    Loan Agreement shall be deemed to refer to <u>Exhibit B</u> attached hereto.</p>
</blockquote>
<p>7. <u>Amendment to EXIM Loan Agreement</u>. Bank and Borrower hereby agreed
  that from and after the Effective Date, all references to the term &quot;EXIM
  Maturity Date&quot; in the EXIM Loan Agreement shall mean March 23, 2011. Bank's
  agreement to extend the EXIM Maturity Date in the EXIM Loan Agreement does not
  constitute an agreement to extend the Forbearance Period. Unless the Existing
  Event of Default is waived by Bank, upon the expiration of the Forbearance Period,
  all outstanding Obligations owed by Borrower to Bank shall be due and payable
  in full.</p>
<p>8. <u>Termination Events</u>. In addition to the Termination Events set forth
  in the Forbearance Agreement, the failure of the Borrower to observe, perform,
  or comply with any of the terms, conditions, covenants or provisions of this
  Amendment, as and when required shall constitute a Termination Event under the
  Forbearance Agreement.</p>
<p>9. <u>Representations of Borrower</u>. Borrower warrants and represents to
  Bank as follows:</p>
<blockquote>
  <p>a. Borrower has no defenses, affirmative or otherwise, rights of setoff,
    rights of recoupment, claims, counterclaims, actions or causes of action of
    any kind or nature whatsoever against Bank or any past, present or future
    agent, attorney, legal representative, predecessor-in-interest, affiliate,
    successor, assign, employee, director or officer of Bank, directly or indirectly,
    arising out of, based upon, or in any manner connected with, any transaction,
    event, circumstance, action, failure to act, or occurrence of any sort or
    type, whether known or unknown, which occurred, existed, was taken, permitted,
    or began prior to the execution of this Amendment and accrued, existed, was
    taken, permitted or begun in accordance with, pursuant to, or by virtue of
    the terms or conditions of the Loan Documents or EXIM Loan Documents, or which
    directly or indirectly relate to or arise out of or in any manner are connected
    with any of the Loan Documents or EXIM Loan Documents; TO THE EXTENT ANY SUCH
    DEFENSES, AFFIRMATIVE OR OTHERWISE, RIGHTS OF SETOFF, RIGHTS OF RECOUPMENT,
    CLAIMS, COUNTERCLAIMS, ACTIONS OR CAUSES OF ACTION EXIST OR EXTEND, SUCH DEFENSES,
    RIGHTS, CLAIMS, COUNTERCLAIMS, ACTIONS AND CAUSES OF ACTION ARE HEREBY FOREVER
    WAIVED, DISCHARGED AND RELEASED.<br>
    <font face="Times New Roman, Times, serif"> </font></p>
  </blockquote>
<p align="center"><font face="Times New Roman, Times, serif">3</font></p>
<hr>
<blockquote>
  <p>b. Borrower has freely and voluntarily entered into this Amendment after
    an adequate opportunity and sufficient period of time to review, analyze and
    discuss all terms and conditions of this Amendment and all factual and legal
    matters relevant hereto with counsel freely and independently chosen by it.
    Borrower further acknowledges that it has actively and with full understanding
    participated in the negotiation of this Amendment after consultation and review
    with its counsel and that this Amendment has been negotiated, prepared and
    executed without fraud, duress, undue influence or coercion of any kind or
    nature whatsoever having been exerted by or imposed upon any party to this
    Amendment.</p>
  <p><font face="Times New Roman, Times, serif">c. As of the Effective Date, there
    are no proceedings or investigations pending or, so far as Borrower knows,
    threatened against it, before any court or arbitrator or any governmental,
    administrative or other judicial authority or agency.</font></p>
  <p><font face="Times New Roman, Times, serif">d. There is no statute, rule,
    regulation, order or judgment, no charter, by-law or preference stock provision
    with respect Borrower, and no provision of any mortgage, indenture, contact
    or other Agreement binding on Borrower or any of its properties which would
    prohibit or cause a default under or in any way prevent the execution, delivery,
    performance, compliance or observance of any of the terms or conditions of
    this Amendment.</font></p>
  <p><font face="Times New Roman, Times, serif">e. Borrower has not voluntarily
    or involuntarily, granted any liens or security interests to any creditor
    not previously disclosed to Bank in writing on or before the Effective Date
    or taken any action or failed to take any action which could or would impair,
    change, jeopardize or otherwise adversely affect the priority, perfection,
    validity or enforceability of any liens or securing interests securing all
    or any portion of the Obligations or the priority or validity of Bank's claims
    with respect to the Obligations relative to any other creditor of Borrower.</font></p>
  <p><font face="Times New Roman, Times, serif">f. Borrower has the full legal
    right, power and authority to enter into and perform its obligations under
    this Amendment and the Forbearance Documents, and the execution and delivery
    of this Amendment and the other Forbearance Documents by Borrower and the
    consummation by the Borrower of the transactions contemplated hereby and thereby
    and performance of their obligations hereunder and thereunder have been duly
    authorized by all appropriate action (corporate or otherwise).</font></p>
  <p><font face="Times New Roman, Times, serif">g. This Amendment, each of the
    Loan Documents and each of the EXIM Loan Documents to which it is a party
    constitutes the valid, binding and enforceable Agreement of Borrower, enforceable
    against Borrower in accordance with the terms thereof.</font></p>
</blockquote>
<p><font face="Times New Roman, Times, serif">10. <u>Reimbursement of Costs and
  Expenses</u>. Borrower shall reimburse Bank for any and all reasonable costs,
  expenses, and costs of collection (including attorneys' fees, expenses, audit
  fees, and appraisal fees) heretofore or hereafter incurred by Bank in connection
  with this Amendment and with the protection, preservation, and enforcement by
  Bank of its rights and remedies. Borrower hereby authorizes and directs Bank
  to debit Borrower's deposit account maintained at Bank for all such fees and
  expenses.</font></p>
<p><font face="Times New Roman, Times, serif">11. <u>Non-Interference</u>. From
  and after the expiration or termination of the Forbearance Period, Borrower
  agrees not to interfere with the exercise by Bank of any of its rights and remedies.
  Borrower further agrees that it shall not seek to distrain or otherwise hinder,
  delay, or impair Bank's efforts to realize upon the Collateral, or otherwise
  to enforce its rights and remedies pursuant to the Loan Documents and EXIM Loan
  Documents. The provisions of this Section 9 shall be specifically enforceable
  by Bank.<br>
  <br>
  <br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif">4</font></p>
<hr>
<p>12. <u><b>RELEASE OF CLAIMS</b></u><b>. FOR AND IN CONSIDERATION OF BANK'S
  AGREEMENTS CONTAINED HEREIN, BORROWER, TOGETHER WITH ITS, SUCCESSORS AND ASSIGNS
  (INDIVIDUALLY AND COLLECTIVELY, &quot;RELEASORS&quot;) HEREBY VOLUNTARILY AND
  KNOWINGLY RELEASES AND FOREVER WAIVES AND DISCHARGES BANK AND EACH OF ITS RESPECTIVE
  PARENTS, DIVISIONS, SUBSIDIARIES, AFFILIATES, MEMBERS, MANAGERS, PARTICIPANTS,
  PREDECESSORS, SUCCESSORS, AND ASSIGNS, AND EACH OF THEIR RESPECTIVE CURRENT
  AND FORMER DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, MANAGERS, PARTNERS, AGENTS,
  AND EMPLOYEES, AND EACH OF THEIR RESPECTIVE PREDECESSORS, SUCCESSORS, HEIRS,
  AND ASSIGNS (INDIVIDUALLY AND COLLECTIVELY, THE &quot;RELEASED PARTIES&quot;)
  FROM ALL POSSIBLE CLAIMS, COUNTERCLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
  DAMAGES, COSTS, EXPENSES AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN,
  ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT OR
  CONDITIONAL, OR AT LAW OR IN EQUITY, IN ANY CASE ORIGINATING IN WHOLE OR IN
  PART ON OR BEFORE THE EFFECTIVE DATE THAT ANY OF THE RELEASORS MAY NOW OR HEREAFTER
  HAVE AGAINST THE RELEASED PARTIES, IF ANY, IRRESPECTIVE OF WHETHER ANY SUCH
  CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE,
  INCLUDING WITHOUT LIMITATION ARISING DIRECTLY OR INDIRECTLY FROM THE LAWSUIT,
  ANY PRIOR OR EXISTING LOANS BETWEEN RELEASORS AND RELEASED PARTIES, ANY OF THE
  LOAN DOCUMENTS OR EXIM LOAN DOCUMENTS, THE EXERCISE OF ANY RIGHTS AND REMEDIES
  UNDER ANY OF THE LOAN DOCUMENTS AND EXIM LOAN DOCUMENTS, AND/OR NEGOTIATION
  FOR AND EXECUTION OF THIS AMENDMENT, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING
  FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS
  OF THE HIGHEST LAWFUL RATE APPLICABLE. EACH OF THE RELEASORS WAIVES THE BENEFITS
  OF ANY LAW, WHICH MAY PROVIDE IN SUBSTANCE: &quot;A GENERAL RELEASE DOES NOT
  EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN ITS
  FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY IT MUST HAVE MATERIALLY
  AFFECTED ITS SETTLEMENT WITH THE DEBTOR.&quot; EACH OF THE RELEASORS UNDERSTANDS
  THAT THE FACTS WHICH IT BELIEVES TO BE TRUE AT THE TIME OF MAKING THE RELEASE
  PROVIDED FOR HEREIN MAY LATER TURN OUT TO BE DIFFERENT THAN IT NOW BELIEVES,
  AND THAT INFORMATION WHICH IS NOT NOW KNOWN OR SUSPECTED MAY LATER BE DISCOVERED.
  EACH OF THE RELEASORS ACCEPTS THIS POSSIBILITY, AND EACH OF THEM ASSUMES THE
  RISK OF THE FACTS TURNING OUT TO BE DIFFERENT AND NEW INFORMATION BEING DISCOVERED;
  AND EACH OF THEM FURTHER AGREES THAT THE RELEASE PROVIDED FOR HEREIN SHALL IN
  ALL RESPECTS CONTINUE TO BE EFFECTIVE AND NOT SUBJECT TO TERMINATION OR RESCISSION
  BECAUSE OF ANY DIFFERENCE IN SUCH FACTS OR ANY NEW INFORMATION.</b></p>
<p><font face="Times New Roman, Times, serif"><br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif">5</font></p>
<hr>
<p>13. <u>Automatic Stay</u>. Borrower agrees that upon the filing of any petition
  for relief by or against Borrower under the United States Bankruptcy Code, Bank
  shall be entitled to immediate and complete relief from the automatic stay,
  and Bank shall be permitted to proceed to protect and enforce its rights and
  remedies under state law. Borrower hereby expressly assents to any motion filed
  by Bank seeking relief from the automatic stay. Borrower further hereby expressly
  WAIVES the protections afforded under Section 362 of the United States Bankruptcy
  Code with respect to Bank.</p>
<p><font face="Times New Roman, Times, serif">14. <u>JURY TRIAL</u>. BORROWER
  HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
  ACTION (I) ARISING UNDER THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT OR ANY RELATED
  AGREEMENT OR (II) IN ANY WAY RELATING TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT
  OR THE TRANSACTIONS EVIDENCED HEREBY OR THEREBY, IN EACH CASE WHETHER NOW EXISTING
  OR HEREAFTER ARISING, AND BORROWER HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE
  OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT BORROWER
  OR BANK MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 14 WITH ANY
  COURT AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWER TO THE WAIVER OF ITS RIGHT
  TO TRIAL BY JURY. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.</font></p>
<p><font face="Times New Roman, Times, serif">WITHOUT INTENDING IN ANY WAY TO
  LIMIT THE PARTIES' AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY,
  if the above waiver of the right to a trial by jury is not enforceable, the
  parties hereto agree that any and all disputes or controversies of any nature
  between them arising at any time shall be decided by a reference to a private
  judge, mutually selected by the parties (or, if they cannot agree, by the Presiding
  Judge of the Santa Clara County, California Superior Court) appointed in accordance
  with California Code of Civil Procedure Section 638 (or pursuant to comparable
  provisions of federal law if the dispute falls within the exclusive jurisdiction
  of the federal courts), sitting without a jury, in Santa Clara County, California;
  and the parties hereby submit to the jurisdiction of such court. The reference
  proceedings shall be conducted pursuant to and in accordance with the provisions
  of California Code of Civil Procedure &sect;&sect; 638 through 645.1, inclusive.
  The private judge shall have the power, among others, to grant provisional relief,
  including without limitation, entering temporary restraining orders, issuing
  preliminary and permanent injunctions and appointing receivers. All such proceedings
  shall be closed to the public and confidential and all records relating thereto
  shall be permanently sealed. If during the course of any dispute, a party desires
  to seek provisional relief, but a judge has not been appointed at that point
  pursuant to the judicial reference procedures, then such party may apply to
  the Santa Clara County, California Superior Court for such relief. The proceeding
  before the private judge shall be conducted in the same manner as it would be
  before a court under the rules of evidence applicable to judicial proceedings.
  The parties shall be entitled to discovery which shall be conducted in the same
  manner as it would be before a court under the rules of discovery applicable
  to judicial proceedings. The private judge shall oversee discovery and may enforce
  all discovery rules and orders applicable to judicial proceedings in the same
  manner as a trial court judge. The parties agree that the selected or appointed
  private judge shall have the power to decide all issues in the action or proceeding,
  whether of fact or of law, and shall report a statement of decision thereon
  pursuant to California Code of Civil Procedure &sect;644(a). Nothing in this
  paragraph shall limit the right of any party at any time to exercise self-help
  remedies, foreclose against collateral, or obtain provisional remedies. The
  private judge shall also determine all issues relating to the applicability,
  interpretation, and enforceability of this paragraph.<br>
  <br>
  <br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif">6</font></p>
<hr>
<p>15. <u>Power of Attorney</u>. Borrower irrevocably appoints Bank as its lawful
  attorney to, after the expiration or termination of the Forbearance Period:
  (i) endorse Borrower's name on any checks or other forms of payment or security;
  (ii) sign Borrower's name on any invoice or bill of lading for any Accounts
  or drafts against Account Debtors, (iii) transfer the Collateral into the name
  of Bank or a third party as the Uniform Commercial Code in the State of California,
  as in effect from time to time, permits; and (iv) take such other actions as
  Bank deems necessary to carry out the intent of this Amendment and the Forbearance
  Documents. Bank may exercise the power of attorney to sign Borrower's name on
  any documents necessary to perfect or continue the perfection of any security
  interest regardless of whether a default has occurred under this Amendment,
  any of the Loan Documents or any of the EXIM Loan Documents. Bank's appointment
  as Borrower's attorney in fact, and all of Bank's rights and powers, coupled
  with an interest, are irrevocable until the Obligations have been fully repaid
  and performed and Bank's obligation to provide any extension of credit to Borrower
  under the Loan Documents or EXIM Loan Documents have been terminated.</p>
<p><font face="Times New Roman, Times, serif">16. <u>Entire Agreement</u>. This
  Amendment shall be binding upon Borrower and its successors and assigns, and
  shall inure to the benefit of Bank and its respective successors and assigns.
  This Amendment and all documents, instruments, and agreements executed in connection
  herewith incorporate all of the discussions and negotiations between Borrower
  and Bank, either expressed or implied, concerning the matters included herein
  and in such other documents, instruments and agreements, any statute, custom,
  or usage to the contrary notwithstanding. No such discussions or negotiations
  shall limit, modify, or otherwise affect the provisions hereof. No modification,
  amendment, or waiver of any provision of this Amendment, or any provision of
  any other document, instrument, or agreement between Borrower and Bank shall
  be effective unless executed in writing by the party to be charged with such
  modification, amendment, or waiver, and if such party be Bank, then by a duly
  authorized officer thereof.</font></p>
<p><font face="Times New Roman, Times, serif">17. <u>Construction of Agreement</u>.<br>
  </font></p>
<blockquote>
  <p><font face="Times New Roman, Times, serif">a. All rights and obligations
    hereunder and thereunder, including matters of construction, validity, and
    performance, shall be governed by and construed in accordance with the law
    of the State of California and are intended to take effect as sealed instruments.
    </font></p>
  <p>b. The captions of this Amendment are for convenience purposes only, and
    shall not be used in construing the intent of the Bank and the Borrower under
    this Amendment.</p>
  <p>c. In the event of any inconsistency between the provisions of this Amendment
    and any other document, instrument, or agreement entered into by and between
    the Bank and the Borrower, the provisions of this Amendment shall govern and
    control.</p>
</blockquote>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">7</font></p>
<hr>
<blockquote>
  <p>d. The Bank and the Borrower have prepared this Amendment and all documents,
    instruments, and agreements incidental hereto with the aid and assistance
    of their respective counsel. Accordingly, all of them shall be deemed to have
    been drafted by the Bank and the Borrower and shall not be construed against
    the Bank or the Borrower.</p>
</blockquote>
<p><font face="Times New Roman, Times, serif">18. <u>Illegality or Unenforceability</u>.
  Any determination that any provision or application of this Amendment is invalid,
  illegal, or unenforceable in any respect, or in any instance, shall not affect
  the validity, legality, or enforceability of any such provision in any other
  instance, or the validity, legality, or enforceability of any other provision
  of this Amendment.</font></p>
<p><font face="Times New Roman, Times, serif">19. <u>Consistent Changes; Conflicts</u>.
  The Loan Documents and EXIM Loan Documents are hereby amended wherever necessary
  to reflect the changes described above. To the extent any term or provision
  herein conflicts with any term or provision contained in any of the Loan Documents
  or any of the EXIM Loan Documents, the term or provision provided for herein
  shall control.</font></p>
<p><font face="Times New Roman, Times, serif">20. <u>Continuing Validity</u>.
  Borrower understands and agrees that in entering into this Amendment, Bank is
  relying upon Borrower's representations, warranties, and agreements, as set
  forth in the Loan Documents and EXIM Loan Documents. Except as expressly modified
  pursuant to this Amendment, the terms of the Loan Documents and EXIM Loan Documents
  remain unchanged and in full force and effect. Bank's agreement to modifications
  to the existing Loan Agreements pursuant to this Amendment in no way shall obligate
  Bank to make any future modifications to the Loan Agreements. Nothing in this
  Amendment shall constitute a satisfaction of the Obligations. It is the intention
  of Bank and Borrower to retain as liable parties all makers and endorsers of
  the Loan Documents and the EXIM Loan Documents, unless the party is expressly
  released by Bank in writing. No maker, endorser, or guarantor will be released
  by virtue of this Amendment. The terms of this Section 20 apply not only to
  this Amendment, but also to all subsequent loan modification agreements.</font></p>
<p><font face="Times New Roman, Times, serif">21. <u>No Waiver</u>. This Amendment
  is not applicable to any Event of Default under any Loan Document whether arising
  before or after the Effective Date or as a result of the transactions contemplated
  hereby other than the Existing Event of Default.</font></p>
<p><font face="Times New Roman, Times, serif">22. <u>Successors and Assigns</u>.
  This Amendment shall inure to the benefit of and be binding upon the heirs,
  successors, and permitted assigns of the parties.</font></p>
<p><font face="Times New Roman, Times, serif">23. <u>Governing Law and Jurisdiction</u>.
  This Amendment shall be construed and enforced in accordance with the terms
  of the laws of the State of California without regard to its conflicts of laws
  principles. If any provision of this Amendment is not enforceable, the remaining
  provisions of the Agreement shall be enforced in accordance with their terms.
  Borrower, and Bank represent and warrant to each other that each is duly authorized
  to execute and deliver this Amendment on their respective behalves.<br>
  </font></p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">8</font></p>
<hr>
<p>24. <u>Counterparts</u>. This Amendment may be executed in two or more counterparts
  each of which shall constitute an original and all of which shall, when taken
  together, constitute one and the same agreement, notwithstanding that all parties
  may not have signed all counterparts of this Amendment.<font face="Times New Roman, Times, serif">
  </font></p>
<p align="center">[Signatures Appear on the Following Page]</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">9</font></p>
<hr>
<p>&nbsp; </p>
<p>IN WITNESS WHEREOF, the parties hereto have executed, or caused this Amendment
  to be executed by the respective officer or authorized signatory thereunto duly
  authorized, as of the date first written above.</p>
<p><font face="Times New Roman, Times, serif"><br>
  </font></p>
<table width="890" border="0" cellspacing="0" cellpadding="0" align="center">
  <tr>
    <td width="508" valign="top" height="17">&nbsp;</td>
    <td width="376" height="17"><b>Bank:</b></td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top" height="2">&nbsp;</td>
    <td width="376" height="2">SILICON VALLEY BANK</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">By: <font face="Times New Roman, Times, serif"
      size=3><u>&nbsp;&nbsp;/s/ Aman Johal&nbsp;&nbsp;</u></font><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">Name: Aman Johal</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">Title: Relationship Manager</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376"><b>Borrower:</b></td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">SOCKET MOBILE, INC.</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">By: <font face="Times New Roman, Times, serif"
      size=3><u>&nbsp;&nbsp;/s/ David W. Dunlap&nbsp;&nbsp;</u></font><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">Name: David W. Dunlap</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">Title: CFO</td>
  </tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<hr>
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif"><b><u>EXHIBIT B</u></b><br>
  <br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif"><b>SILICON VALLEY
  BANK</b></font></p>
<p align="center"><br>
  <font face="Times New Roman, Times, serif"><b>SPECIALTY FINANCE DIVISION<br>
  Compliance Certificate</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">I, an authorized officer of Socket
  Mobile, Inc. (&quot;<b>Borrower</b>&quot;) certify under the Loan and Security
  Agreement (the &quot;<b>Agreement</b>&quot;) between Borrower and Silicon Valley
  Bank (&quot;<b>Bank</b>&quot;) as follows (all capitalized terms used herein
  shall have the meaning set forth in the Agreement):<br>
  </font></p>
<p><font face="Times New Roman, Times, serif"><b>Borrower represents and warrants
  for each Financed Receivable:</b><br>
  <br>
  Each Financed Receivable is an Eligible Account.</font><font face="Times New Roman, Times, serif"><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">Borrower is the owner with legal
  right to sell, transfer, assign and encumber such Financed Receivable;</font></p>
<p><font face="Times New Roman, Times, serif">The correct amount is on the Invoice
  Transmittal and is not disputed;</font></p>
<p><font face="Times New Roman, Times, serif">Payment is not contingent on any
  obligation or contract and Borrower has fulfilled all its obligations as of
  the Invoice Transmittal date;</font></p>
<p><font face="Times New Roman, Times, serif">Each Financed Receivable is based
  on an actual sale and delivery of goods and/or services rendered, is due to
  Borrower, is not past due or in default, has not been previously sold, assigned,
  transferred, or pledged and is free of any liens, security interests and encumbrances
  other than Permitted Liens;<br>
  </font></p>
<p><font face="Times New Roman, Times, serif">There are no defenses, offsets,
  counterclaims or agreements for which the Account Debtor may claim any deduction
  or discount;</font></p>
<p>It reasonably believes no Account Debtor is insolvent or subject to any Insolvency
  Proceedings;</p>
<p>It has not filed or had filed against it Insolvency Proceedings and does not
  anticipate any filing;</p>
<p>Bank has the right to endorse and/ or require Borrower to endorse all payments
  received on Financed Receivables and all proceeds of Collateral.</p>
<p>No representation, warranty or other statement of Borrower in any certificate
  or written statement given to Bank contains any untrue statement of a material
  fact or omits to state a material fact necessary to make the statement contained
  in the certificates or statement not misleading.</p>
<p>&nbsp;</p>
<hr>
<p><b>Additionally, Borrower represents and warrants as follows:</b></p>
<p>Borrower and each Subsidiary is duly existing and in good standing in its state
  of formation and qualified and licensed to do business in, and in good standing
  in, any state in which the conduct of its business or its ownership of property
  requires that it be qualified except where the failure to do so could not reasonably
  be expected to cause a Material Adverse Change. The execution, delivery and
  performance of the Loan Documents have been duly authorized, and do not conflict
  with Borrower's organizational documents, nor constitute an event of default
  under any material agreement by which Borrower is bound. Borrower is not in
  default under any agreement to which or by which it is bound in which the default
  could reasonably be expected to cause a Material Adverse Change.</p>
<p>Borrower has good title to the Collateral, free of Liens except Permitted Liens.
  All inventory is in all material respects of good and marketable quality, free
  from material defects.</p>
<p>Borrower is not an &quot;investment company&quot; or a company &quot;controlled&quot;
  by an &quot;investment company&quot; under the Investment Company Act of 1940,
  as amended. Neither Borrower nor any of its Subsidiaries is a &quot;holding
  company&quot; or an &quot;affiliate&quot; of a &quot;holding company&quot; or
  a &quot;subsidiary company&quot; of a &quot;holding company&quot; as each term
  is defined and used in the Public Utility Holding Company Act of 2005. Borrower
  is not engaged as one of its important activities in extending credit for margin
  stock (under Regulations X, T and U of the Federal Reserve Board of Governors).
  Borrower has complied in all material respects with the Federal Fair Labor Standards
  Act. Borrower has not violated any laws, ordinances or rules, the violation
  of which could reasonably be expected to cause a Material Adverse Change. None
  of Borrower's or any Subsidiary's properties or assets has been used by Borrower
  or any Subsidiary or, to the best of Borrower's knowledge, by previous Persons,
  in disposing, producing, storing, treating, or transporting any hazardous substance
  other than legally. Borrower and each Subsidiary has timely filed all required
  tax returns and paid, or made adequate provision to pay, all material taxes,
  except those being contested in good faith with adequate reserves under GAAP.
  Borrower and each Subsidiary has obtained all consents, approvals and authorizations
  of, made all declarations or filings with, and given all notices to, all government
  authorities that are necessary to continue its business as currently conducted
  except where the failure to obtain or make such consents, declarations, notices
  or filings would not reasonably be expected to cause a Material Adverse Change.</p>
<p><font face="Times New Roman, Times, serif"><br>
  </font></p>
<div align="center"></div>
<table width="60%" border="1" cellspacing="0" cellpadding="0" align="center">
  <tr>
    <td colspan="3"><b>Please indicate compliance status by circling Yes/No under
      &quot;Complies&quot; column.</b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>
      <div align="center"><b><u>Reporting Covenant</u></b></div>
    </td>
    <td>
      <div align="center"><b><u>Required</u></b></div>
    </td>
    <td>
      <div align="center"><b><u>Complies</u></b></div>
    </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" height="22"> Monthly financial statements with Compliance
      Certificate</td>
    <td height="22">Monthly within 30 days</td>
    <td height="22">
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td height="16">Annual financial statement (CPA Audited) + CC</td>
    <td height="16">FYE within 120 days</td>
    <td height="16">
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td height="23">10 Q, 10 K and 8-K</td>
    <td height="23">Within 5 days after filing with SEC</td>
    <td height="23">
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td height="16">Borrowing Base Certificate A/R &amp; A/P Agings</td>
    <td height="16">Monthly within 30 days</td>
    <td height="16">
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td>Distributor sell-through reports</td>
    <td>Monthly within 30 days</td>
    <td height="16">
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td colspan="3" height="22">The following Intellectual Property was registered
      after the Closing Date (if no registrations, state &quot;None&quot;)</td>
  </tr>
</table>
<div align="center"></div>
<p>&nbsp;</p>
<p>&nbsp;</p>
<hr>
<p><font face="Times New Roman, Times, serif"><br>
  </font></p>
<table width="60%" border="1" cellspacing="0" cellpadding="0" align="center">
  <tr>
    <td><b><u>Financial Covenants</u></b></td>
    <td>
      <div align="center"><b><u>Required</u></b></div>
    </td>
    <td>
      <div align="center"><b><u>Actual</u></b></div>
    </td>
    <td>
      <div align="center"><b><u>Complies</u></b></div>
    </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>Maintain at all times:</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td> <font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>Minimum
      Cash at Bank</td>
    <td>
      <div align="center">$1,000,000</div>
    </td>
    <td>
      <div align="center">$________</div>
    </td>
    <td>
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td>Maintain on a Quarterly Basis:</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>Minimum
      Revenue</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>March
      31, 2010</td>
    <td>
      <div align="center">$4,565,000</div>
    </td>
    <td>
      <div align="center">$________</div>
    </td>
    <td>
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>June
      30, 2010</td>
    <td>
      <div align="center">$5,495,000</div>
    </td>
    <td>
      <div align="center">$________</div>
    </td>
    <td>
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>September
      30, 2010</td>
    <td>
      <div align="center">$6,115,000</div>
    </td>
    <td>
      <div align="center">$________</div>
    </td>
    <td>
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size="3" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>December
      31, 2010</td>
    <td>
      <div align="center">$6,265,000</div>
    </td>
    <td>
      <div align="center">$________</div>
    </td>
    <td>
      <div align="center">Yes No</div>
    </td>
  </tr>
</table>
<p>&nbsp; </p>
<table width="60%" border="1" cellspacing="0" cellpadding="0" align="center">
  <tr>
    <td colspan="2" height="22">
      <div align="center"><b><u>Performance Pricing</u></b></div>
    </td>
    <td width="17%" height="22">
      <div align="center"><b><u>Applies</u></b></div>
    </td>
  </tr>
  <tr>
    <td width="46%">Adjusted Quick Ratio <u>&gt;</u> 1.25:1.00</td>
    <td width="37%">No Collateral Handling Fee</td>
    <td width="17%">
      <div align="center">Yes No</div>
    </td>
  </tr>
  <tr>
    <td width="46%">Adjusted Quick Ratio <u>&lt;</u> 1.25:1.00</td>
    <td width="37%">Collateral Handling Fee of 0.62%</td>
    <td width="17%">
      <div align="center">Yes No</div>
    </td>
  </tr>
</table>
<p><font face="Times New Roman, Times, serif"><br>
  All representations and warranties in the Agreement are true and correct in
  all material respects on this date, and Borrower represents that there is no
  existing Event of Default.</font><font face="Times New Roman, Times, serif"><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">Sincerely,</font></p>
<p><font face="Times New Roman, Times, serif">Socket Mobile, Inc. </font></p>
<p><font face="Times New Roman, Times, serif"><br>
  ____________________________________<br>
  Signature</font></p>
<p><font face="Times New Roman, Times, serif">____________________________________<br>
  Title<br>
  ____________________________________<br>
  Date</font></p>
<p></p>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex102.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<html>
<head>
<title>Untitled Document</title>
</head>

<body bgcolor="#FFFFFF">
<p align="right"><font face="Times New Roman, Times, serif"><b>Exhibit 10.2</b></font></p>
<p align="center"><font face="Times New Roman, Times, serif"><br>
  <b><br>
  <u>FORBEARANCE AGREEMENT<br>
  </u></b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">THIS FORBEARANCE AGREEMENT (this
  &quot;<b>Agreement</b>&quot;) is executed and effective this 4th day of February,
  2010 (the &quot;<b>Effective Date</b>&quot;), by and between SILICON VALLEY
  BANK, a California corporation (&quot;<b>Bank</b>&quot;) with its principal
  place of business of 3003 Tasman Drive, Santa Clara, California 95054 and SOCKET
  MOBILE, INC., a Delaware corporation (&quot;<b>Borrower</b>&quot;) with a principal
  place of business of 39700 Eureka Drive, Newark, California 94560.<br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif"><b><br>
  RECITALS</b><br>
  </font></p>
<p><font face="Times New Roman, Times, serif">A. Bank and Borrower have entered
  into that certain (i) Second Amended and Restated Loan and Security Agreement
  dated as of December 24, 2008 (as the same may from time to time be amended,
  modified, supplemented or restated, the &quot;<b>Domestic Loan Agreement</b>&quot;),
  pursuant to which Bank has made available to Borrower, among other credit accommodations,
  a secured revolving credit facility in the original maximum principal amount
  of One Million Five Hundred Thousand Dollars ($1,500,000) (the &quot;<b>Revolving
  Loan</b>&quot;) and (ii) Second Amended and Restated Export-Import Bank Loan
  and Security Agreement dated as of December 24, 2008 (as the same may from time
  to time be amended, modified, supplemented or restated, the &quot;<b>EXIM Loan
  Agreement</b>&quot; and collectively with the Domestic Loan Agreement, the &quot;<b>Loan
  Agreements</b>&quot;), pursuant to which Bank has made available to Borrower,
  among other credit accommodations, a secured EXIM revolving credit facility
  in the original maximum principal amount of One Million Dollars ($1,000,000)
  (the &quot;<b>EXIM Revolving Loan</b>&quot; and collectively with the Revolving
  Loan, the &quot;<b>Loans</b>&quot;).<br>
  </font></p>
<p><font face="Times New Roman, Times, serif">B. Borrower is currently in default
  of the Domestic Loan Agreement for failing to comply with the minimum revenue
  covenant as required pursuant to Section 6.6(b) for the quarter ended December
  31, 2009. The Event of Default under the Domestic Loan Agreement creates an
  Event of Default under the EXIM Loan Agreement pursuant to Section 8.4 thereof.
  The foregoing Event of Default is hereinafter referred to as the &quot;<b>Existing
  Event of Default</b>&quot;.<br>
  </font></p>
<p><font face="Times New Roman, Times, serif">C. Borrower has requested that Bank
  forbear from exercising its rights and remedies under the Loan Agreements as
  a result of the Existing Event of Default during the Forbearance Period (as
  hereinafter defined).</font></p>
<p><font face="Times New Roman, Times, serif"><b>NOW</b>, <b>THEREFORE</b>, in
  consideration of the agreements and covenants contained herein, and for good
  and valuable consideration, the receipt and sufficiency of which are hereby
  acknowledged, the parties hereto agree as follows:<br>
  </font></p>
<p>1. <u>Incorporation by Reference; Acknowledgement of Recitals</u>. Borrower
  acknowledges the recitals set forth herein and the description of the Existing
  Event of Default set forth above are true and correct statements of fact, are
  incorporated herein, and form a substantive part of this Agreement.</p>
<p>2. <u>Definitions</u>. Capitalized terms used but not defined in this Agreement,
  including its preamble and recitals, shall have the meanings given to them in
  the Loan Agreements.</p>
<p><font face="Times New Roman, Times, serif"><br>
  </font></p>
<p align="center"><font face="Times New Roman, Times, serif">1</font></p>
<hr>
<p>3. <u>Acknowledgment of Indebtedness</u>. </p>
<blockquote>
  <p>a. Borrower hereby acknowledges and agrees that as of February 1, 2010, the
    outstanding principal balance under the Revolving Loan is five hundred seventy
    one thousand seven hundred Dollars ($571,700), excluding all accrued and unpaid
    interest, fees and Bank Expenses and that such sum is due and owing without
    offset or defense.</p>
  <p>b. Borrower hereby acknowledges and agrees that as of February 1, 2010, the
    outstanding principal balance under the EXIM Revolving Loan is two hundred
    thirty nine thousand three hundred Dollars ($239,300), excluding all accrued
    and unpaid interest, fees and Bank Expenses and that such sum is due and owing
    without offset or defense.</p>
</blockquote>
<p>4. <u>Ratification of Loan Documents and EXIM Loan Documents; Further Assurances</u>.</p>
<blockquote>
  <p>a. Borrower acknowledges and agrees that each of the Loan Documents and EXIM
    Loan Documents remain in full force and effect in accordance with the original
    terms, except as expressly amended and modified by this Agreement and the
    Forbearance Documents (as hereinafter defined).</p>
  <p>b. Borrower hereby ratifies, confirms, and reaffirms that the Obligations
    include, without limitation, the Loans, and any future modifications, amendments,
    substitutions or renewals thereof.</p>
  <p>c. Borrower hereby agrees that this Agreement is the legal, valid and binding
    obligation of Borrower, enforceable against Borrower.</p>
  <p>d. Borrower and Bank acknowledge that the Existing Event of Default is ongoing,
    existing and a continuing Event of Default under the Loan Agreements.</p>
  <p>e. Borrower and Bank confirm that neither party has heretofore waived or
    modified, and has not agreed to waive or modify, any term of the Loan Documents
    or EXIM Loan Documents, and any actions that Borrower takes or fails to take
    (including the expenditure of any funds) is voluntary, informed and taken
    at its own risk.</p>
  <p>f. Borrower shall, from and after the execution of this Agreement, execute
    and deliver to Bank whatever additional documents, instruments, and agreements
    that Bank may reasonably require in order to perfect the Collateral granted
    in the Loan Agreements more securely in Bank and to otherwise give effect
    to the terms and conditions of this Agreement.</p>
</blockquote>
<p>5. <u>Conditions Precedent</u>. The effectiveness of this Agreement and the
  forbearance described herein is subject to the satisfaction of each of the following
  conditions precedent:</p>
<blockquote>
  <p>a. This Agreement and any Forbearance Document shall be executed by all parties
    and delivered to Bank; and</p>
  <p>b. Borrower's payment of a non-refundable forbearance fee in an amount equal
    to Twenty Thousand Dollars ($20,000) and all legal fees and expenses of Bank
    shall have been paid in full, to the extent due in connection with the Existing
    Event of Default and the preparation, negotiation, execution and delivery
    of this Agreement and the Forbearance Documents. Borrower hereby authorizes
    Bank to debit the deposit account maintained by Borrower with Bank for all
    such amounts.</p>
</blockquote>
<p>&nbsp;</p>
<blockquote>
  <p align="center"><font face="Times New Roman, Times, serif">2</font></p>
</blockquote>
<hr>
<p>6. <u>Forbearance Period</u>. Subject to Borrower's strict compliance and performance
  with the terms of this Agreement and so long as no Event of Default (other than
  the Existing Event of Default) or Termination Event (as hereinafter defined)
  occurs, Bank will forbear from enforcing its rights and remedies under the Loan
  Documents and EXIM Loan Documents through March 24, 2010 (the &quot;<b>Forbearance
  Period</b>&quot;). Except as expressly provided herein, this Agreement does
  not constitute a waiver or release by Bank of any Obligations or of any Event
  of Default which may arise in the future after the Effective Date.</p>
<p>7. <u>Termination</u>. The Forbearance Period shall terminate automatically
  and without notice to Borrower upon the occurrence of a Termination Event.</p>
<p>8. <u>Termination Events</u>. The occurrence of any one or more of the following
  events shall constitute a termination event (hereinafter, a &quot;<b>Termination
  Event</b>&quot;) under this Agreement:</p>
<blockquote>
  <p>a. The failure of the Borrower to cause the Bank's Obligations to repaid
    as and when required by the Loan Agreements, it being expressly acknowledged
    and agreed that <b>TIME IS OF THE ESSENCE</b>.</p>
  <p>b. The filing of a petition for relief by or against Borrower under the United
    States Bankruptcy Code.</p>
  <p>c. The failure of the Borrower to promptly, punctually, or faithfully perform
    any other term, condition, or covenant of this Agreement or any of the other
    documents executed and delivered in connection with this Agreement (the &quot;<b>Forbearance
    Documents</b>&quot;) as and when due, it being expressly acknowledged and
    agreed that <b>TIME IS OF THE ESSENCE</b>.</p>
  <p>d. The occurrence of any further default or Event of Default under any Loan
    Agreement, any other Loan Document or any Forbearance Document.</p>
  <p>e. any recital, representation or warranty made herein, in any document Forbearance
    Document, or in any report, certificate, financial statement or other instrument
    or document previously, now or hereafter furnished by or on behalf of any
    Obligor in connection with this Agreement or any Forbearance Document, shall
    prove to have been false, incomplete or misleading in any material respect
    on the date as of which it was made; and</p>
  <p>f. a material impairment in the perfection or priority of Bank's security
    interest in the Collateral occurs.</p>
</blockquote>
<p>9. <u>Rights Upon Termination</u>. Upon the earlier of (i) the occurrence of
  any Termination Event or (ii) the expiration of the Forbearance Period, all
  of the Obligations shall, without notice or demand, become immediately due and
  payable in full and at the sole discretion of Bank and Bank shall be entitled
  to immediately pursue any and all remedies available under applicable law or
  pursuant to the Loan Documents and EXIM Loan Documents.</p>
<p align="center">&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">3</font></p>
<hr>
<p>10. <u>Representations of Borrower</u>. Borrower warrants and represents to
  Bank as follows:</p>
<blockquote>
  <p>a. Borrower has no defenses, affirmative or otherwise, rights of setoff,
    rights of recoupment, claims, counterclaims, actions or causes of action of
    any kind or nature whatsoever against Bank or any past, present or future
    agent, attorney, legal representative, predecessor-in-interest, affiliate,
    successor, assign, employee, director or officer of Bank, directly or indirectly,
    arising out of, based upon, or in any manner connected with, any transaction,
    event, circumstance, action, failure to act, or occurrence of any sort or
    type, whether known or unknown, which occurred, existed, was taken, permitted,
    or began prior to the execution of this Agreement and accrued, existed, was
    taken, permitted or begun in accordance with, pursuant to, or by virtue of
    the terms or conditions of the Loan Documents or EXIM Loan Documents, or which
    directly or indirectly relate to or arise out of or in any manner are connected
    with any of the Loan Documents or EXIM Loan Documents; TO THE EXTENT ANY SUCH
    DEFENSES, AFFIRMATIVE OR OTHERWISE, RIGHTS OF SETOFF, RIGHTS OF RECOUPMENT,
    CLAIMS, COUNTERCLAIMS, ACTIONS OR CAUSES OF ACTION EXIST OR EXTEND, SUCH DEFENSES,
    RIGHTS, CLAIMS, COUNTERCLAIMS, ACTIONS AND CAUSES OF ACTION ARE HEREBY FOREVER
    WAIVED, DISCHARGED AND RELEASED.</p>
  <p>b. Borrower has freely and voluntarily entered into this Agreement after
    an adequate opportunity and sufficient period of time to review, analyze and
    discuss all terms and conditions of this Agreement and all factual and legal
    matters relevant hereto with counsel freely and independently chosen by it.
    Borrower further acknowledges that it has actively and with full understanding
    participated in the negotiation of this Agreement after consultation and review
    with its counsel and that this Agreement has been negotiated, prepared and
    executed without fraud, duress, undue influence or coercion of any kind or
    nature whatsoever having been exerted by or imposed upon any party to this
    Agreement.</p>
  <p>c. As of the Effective Date, there are no proceedings or investigations pending
    or, so far as Borrower knows, threatened against it, before any court or arbitrator
    or any governmental, administrative or other judicial authority or agency.</p>
  <p>d. There is no statute, rule, regulation, order or judgment, no charter,
    by-law or preference stock provision with respect Borrower, and no provision
    of any mortgage, indenture, contact or other Agreement binding on Borrower
    or any of its properties which would prohibit or cause a default under or
    in any way prevent the execution, delivery, performance, compliance or observance
    of any of the terms or conditions of this Agreement.</p>
  <p>e. Borrower has not voluntarily or involuntarily, granted any liens or security
    interests to any creditor not previously disclosed to Bank in writing on or
    before the Effective Date or taken any action or failed to take any action
    which could or would impair, change, jeopardize or otherwise adversely affect
    the priority, perfection, validity or enforceability of any liens or securing
    interests securing all or any portion of the Obligations or the priority or
    validity of Bank's claims with respect to the Obligations relative to any
    other creditor of Borrower.</p>
  <p>&nbsp;</p>
</blockquote>
<p align="center"><font face="Times New Roman, Times, serif">4</font></p>
<hr>
<blockquote>
  <p>f. Borrower has the full legal right, power and authority to enter into and
    perform its obligations under this Agreement and the Forbearance Documents,
    and the execution and delivery of this Agreement and the other Forbearance
    Documents by Borrower and the consummation by the Borrower of the transactions
    contemplated hereby and thereby and performance of their obligations hereunder
    and thereunder have been duly authorized by all appropriate action (corporate
    or otherwise).</p>
  <p>g. This Agreement, each of the Loan Documents and each of the EXIM Loan Documents
    to which it is a party constitutes the valid, binding and enforceable Agreement
    of Borrower, enforceable against Borrower in accordance with the terms thereof.</p>
</blockquote>
<p>11. <u>Reimbursement of Costs and Expenses</u>. Borrower shall reimburse Bank
  for any and all reasonable costs, expenses, and costs of collection (including
  attorneys' fees, expenses, audit fees, and appraisal fees) heretofore or hereafter
  incurred by Bank in connection with this Agreement and with the protection,
  preservation, and enforcement by Bank of its rights and remedies. Borrower hereby
  authorizes and directs Bank to debit Borrower's deposit account maintained at
  Bank for all such fees and expenses.</p>
<p>12. <u>Non-Interference</u>. From and after the expiration or termination of
  the Forbearance Period, Borrower agrees not to interfere with the exercise by
  Bank of any of its rights and remedies. Borrower further agrees that it shall
  not seek to distrain or otherwise hinder, delay, or impair Bank's efforts to
  realize upon the Collateral, or otherwise to enforce its rights and remedies
  pursuant to the Loan Documents and EXIM Loan Documents. The provisions of this
  Section 12 shall be specifically enforceable by Bank.</p>
<p>13. <u><b>RELEASE OF CLAIMS</b></u><b>. FOR AND IN CONSIDERATION OF BANK'S
  AGREEMENTS CONTAINED HEREIN, BORROWER, TOGETHER WITH ITS, SUCCESSORS AND ASSIGNS
  (INDIVIDUALLY AND COLLECTIVELY, &quot;RELEASORS&quot;) HEREBY VOLUNTARILY AND
  KNOWINGLY RELEASES AND FOREVER WAIVES AND DISCHARGES BANK AND EACH OF ITS RESPECTIVE
  PARENTS, DIVISIONS, SUBSIDIARIES, AFFILIATES, MEMBERS, MANAGERS, PARTICIPANTS,
  PREDECESSORS, SUCCESSORS, AND ASSIGNS, AND EACH OF THEIR RESPECTIVE CURRENT
  AND FORMER DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, MANAGERS, PARTNERS, AGENTS,
  AND EMPLOYEES, AND EACH OF THEIR RESPECTIVE PREDECESSORS, SUCCESSORS, HEIRS,
  AND ASSIGNS (INDIVIDUALLY AND COLLECTIVELY, THE &quot;RELEASED PARTIES&quot;)
  FROM ALL POSSIBLE CLAIMS, COUNTERCLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
  DAMAGES, COSTS, EXPENSES AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN,
  ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT OR
  CONDITIONAL, OR AT LAW OR IN EQUITY, IN ANY CASE ORIGINATING IN WHOLE OR IN
  PART ON OR BEFORE THE EFFECTIVE DATE THAT ANY OF THE RELEASORS MAY NOW OR HEREAFTER
  HAVE AGAINST THE RELEASED PARTIES, IF ANY, IRRESPECTIVE OF WHETHER ANY SUCH
  CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE,
  INCLUDING WITHOUT LIMITATION ARISING DIRECTLY OR INDIRECTLY FROM THE LAWSUIT,
  ANY PRIOR OR EXISTING LOANS BETWEEN RELEASORS AND RELEASED PARTIES, ANY OF THE
  LOAN DOCUMENTS OR EXIM LOAN DOCUMENTS, THE EXERCISE OF ANY RIGHTS AND REMEDIES
  UNDER ANY OF THE LOAN DOCUMENTS AND EXIM LOAN DOCUMENTS, AND/OR NEGOTIATION
  FOR AND EXECUTION OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING
  FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS
  OF THE HIGHEST LAWFUL RATE APPLICABLE. EACH OF THE RELEASORS WAIVES THE BENEFITS
  OF ANY LAW, WHICH MAY PROVIDE IN SUBSTANCE: &quot;A GENERAL RELEASE DOES NOT
  EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN ITS
  FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY IT MUST HAVE MATERIALLY
  AFFECTED ITS SETTLEMENT WITH THE DEBTOR.&quot; EACH OF THE RELEASORS UNDERSTANDS
  THAT THE FACTS WHICH IT BELIEVES TO BE TRUE AT THE TIME OF MAKING THE RELEASE
  PROVIDED FOR HEREIN MAY LATER TURN OUT TO BE DIFFERENT THAN IT NOW BELIEVES,
  AND THAT INFORMATION WHICH IS NOT NOW KNOWN OR SUSPECTED MAY LATER BE DISCOVERED.
  EACH OF THE RELEASORS ACCEPTS THIS POSSIBILITY, AND EACH OF THEM ASSUMES THE
  RISK OF THE FACTS TURNING OUT TO BE DIFFERENT AND NEW INFORMATION BEING DISCOVERED;
  AND EACH OF THEM FURTHER AGREES THAT THE RELEASE PROVIDED FOR HEREIN SHALL IN
  ALL RESPECTS CONTINUE TO BE EFFECTIVE AND NOT SUBJECT TO TERMINATION OR RESCISSION
  BECAUSE OF ANY DIFFERENCE IN SUCH FACTS OR ANY NEW INFORMATION.</b></p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">5</font></p>
<hr>
<p>14. <u>Automatic Stay</u>. Borrower agrees that upon the filing of any petition
  for relief by or against Borrower under the United States Bankruptcy Code, Bank
  shall be entitled to immediate and complete relief from the automatic stay,
  and Bank shall be permitted to proceed to protect and enforce its rights and
  remedies under state law. Borrower hereby expressly assents to any motion filed
  by Bank seeking relief from the automatic stay. Borrower further hereby expressly
  WAIVES the protections afforded under Section 362 of the United States Bankruptcy
  Code with respect to Bank.</p>
<p>15. <u>JURY TRIAL</u>. BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
  BY JURY OF ANY CLAIM OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR
  ANY OTHER LOAN DOCUMENT OR ANY RELATED AGREEMENT OR (II) IN ANY WAY RELATING
  TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS EVIDENCED HEREBY
  OR THEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND BORROWER
  HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
  TRIAL WITHOUT A JURY, AND THAT BORROWER OR BANK MAY FILE AN ORIGINAL COUNTERPART
  OR A COPY OF THIS SECTION 15 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
  OF BORROWER TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. EACH PARTY HAS REVIEWED
  THIS WAIVER WITH ITS COUNSEL.<br>
  <br>
</p>
<p align="center"><font face="Times New Roman, Times, serif">6</font></p>
<hr>
<p>WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES' AGREEMENT TO WAIVE THEIR
  RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial
  by jury is not enforceable, the parties hereto agree that any and all disputes
  or controversies of any nature between them arising at any time shall be decided
  by a reference to a private judge, mutually selected by the parties (or, if
  they cannot agree, by the Presiding Judge of the Santa Clara County, California
  Superior Court) appointed in accordance with California Code of Civil Procedure
  Section 638 (or pursuant to comparable provisions of federal law if the dispute
  falls within the exclusive jurisdiction of the federal courts), sitting without
  a jury, in Santa Clara County, California; and the parties hereby submit to
  the jurisdiction of such court. The reference proceedings shall be conducted
  pursuant to and in accordance with the provisions of California Code of Civil
  Procedure &sect;&sect;638 through 645.1, inclusive. The private judge shall
  have the power, among others, to grant provisional relief, including without
  limitation, entering temporary restraining orders, issuing preliminary and permanent
  injunctions and appointing receivers. All such proceedings shall be closed to
  the public and confidential and all records relating thereto shall be permanently
  sealed. If during the course of any dispute, a party desires to seek provisional
  relief, but a judge has not been appointed at that point pursuant to the judicial
  reference procedures, then such party may apply to the Santa Clara County, California
  Superior Court for such relief. The proceeding before the private judge shall
  be conducted in the same manner as it would be before a court under the rules
  of evidence applicable to judicial proceedings. The parties shall be entitled
  to discovery which shall be conducted in the same manner as it would be before
  a court under the rules of discovery applicable to judicial proceedings. The
  private judge shall oversee discovery and may enforce all discovery rules and
  orders applicable to judicial proceedings in the same manner as a trial court
  judge. The parties agree that the selected or appointed private judge shall
  have the power to decide all issues in the action or proceeding, whether of
  fact or of law, and shall report a statement of decision thereon pursuant to
  California Code of Civil Procedure &sect;644(a). Nothing in this paragraph shall
  limit the right of any party at any time to exercise self-help remedies, foreclose
  against collateral, or obtain provisional remedies. The private judge shall
  also determine all issues relating to the applicability, interpretation, and
  enforceability of this paragraph.</p>
<p>16. <u>Power of Attorney</u>. Borrower irrevocably appoints Bank as its lawful
  attorney to, after the expiration or termination of the Forbearance Period:
  (i) endorse Borrower's name on any checks or other forms of payment or security;
  (ii) sign Borrower's name on any invoice or bill of lading for any Accounts
  or drafts against Account Debtors, (iii) transfer the Collateral into the name
  of Bank or a third party as the Uniform Commercial Code in the State of California,
  as in effect from time to time, permits; and (iv) take such other actions as
  Bank deems necessary to carry out the intent of this Agreement and the Forbearance
  Documents. Bank may exercise the power of attorney to sign Borrower's name on
  any documents necessary to perfect or continue the perfection of any security
  interest regardless of whether a default has occurred under this Agreement,
  any of the Loan Documents or any of the EXIM Loan Documents. Bank's appointment
  as Borrower's attorney in fact, and all of Bank's rights and powers, coupled
  with an interest, are irrevocable until the Obligations have been fully repaid
  and performed and Bank's obligation to provide any extension of credit to Borrower
  under the Loan Documents or EXIM Loan Documents have been terminated.</p>
<p>17. <u>Entire Agreement</u>. This Agreement shall be binding upon Borrower
  and its successors and assigns, and shall inure to the benefit of Bank and its
  respective successors and assigns. This Agreement and all documents, instruments,
  and agreements executed in connection herewith incorporate all of the discussions
  and negotiations between Borrower and Bank, either expressed or implied, concerning
  the matters included herein and in such other documents, instruments and agreements,
  any statute, custom, or usage to the contrary notwithstanding. No such discussions
  or negotiations shall limit, modify, or otherwise affect the provisions hereof.
  No modification, amendment, or waiver of any provision of this Agreement, or
  any provision of any other document, instrument, or agreement between Borrower
  and Bank shall be effective unless executed in writing by the party to be charged
  with such modification, amendment, or waiver, and if such party be Bank, then
  by a duly authorized officer thereof.</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">7</font></p>
<hr>
<p>18. <u>Construction of Agreement</u>. </p>
<blockquote>
  <p>a. All rights and obligations hereunder and thereunder, including matters
    of construction, validity, and performance, shall be governed by and construed
    in accordance with the law of the State of California and are intended to
    take effect as sealed instruments.</p>
  <p>b. The captions of this Agreement are for convenience purposes only, and
    shall not be used in construing the intent of the Bank and the Borrower under
    this Agreement.</p>
  <p>c. In the event of any inconsistency between the provisions of this Agreement
    and any other document, instrument, or agreement entered into by and between
    the Bank and the Borrower, the provisions of this Agreement shall govern and
    control.</p>
  <p>d. The Bank and the Borrower have prepared this Agreement and all documents,
    instruments, and agreements incidental hereto with the aid and assistance
    of their respective counsel. Accordingly, all of them shall be deemed to have
    been drafted by the Bank and the Borrower and shall not be construed against
    the Bank or the Borrower.</p>
</blockquote>
<p>19. <u>Illegality or Unenforceability</u>. Any determination that any provision
  or application of this Agreement is invalid, illegal, or unenforceable in any
  respect, or in any instance, shall not affect the validity, legality, or enforceability
  of any such provision in any other instance, or the validity, legality, or enforceability
  of any other provision of this Agreement.</p>
<p>20. <u>Consistent Changes; Conflicts</u>. The Loan Documents and EXIM Loan
  Documents are hereby amended wherever necessary to reflect the changes described
  above. To the extent any term or provision herein conflicts with any term or
  provision contained in any of the Loan Documents or any of the EXIM Loan Documents,
  the term or provision provided for herein shall control.</p>
<p>21. <u>Continuing Validity</u>. Borrower understands and agrees that in entering
  into this Agreement, Bank is relying upon Borrower's representations, warranties,
  and agreements, as set forth in the Loan Documents and EXIM Loan Documents.
  Except as expressly modified pursuant to this Agreement, the terms of the Loan
  Documents and EXIM Loan Documents remain unchanged and in full force and effect.
  Bank's agreement to modifications to the existing Loan Agreements pursuant to
  this Agreement in no way shall obligate Bank to make any future modifications
  to the Loan Agreements. Nothing in this Agreement shall constitute a satisfaction
  of the Obligations. It is the intention of Bank and Borrower to retain as liable
  parties all makers and endorsers of the Loan Documents and the EXIM Loan Documents,
  unless the party is expressly released by Bank in writing. No maker, endorser,
  or guarantor will be released by virtue of this Agreement. The terms of this
  Section 21 apply not only to this Agreement, but also to all subsequent loan
  modification agreements.</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif">8</font></p>
<hr>
<p>22. <u>No Waiver</u>. This Agreement is not applicable to any Event of Default
  under any Loan Document whether arising before or after the Effective Date or
  as a result of the transactions contemplated hereby other than the Existing
  Event of Default.</p>
<p>23. <u>Successors and Assigns</u>. This Agreement shall inure to the benefit
  of and be binding upon the heirs, successors, and permitted assigns of the parties.</p>
<p>24. <u>Governing Law and Jurisdiction</u>. This Agreement shall be construed
  and enforced in accordance with the terms of the laws of the State of California
  without regard to its conflicts of laws principles. If any provision of this
  Agreement is not enforceable, the remaining provisions of the Agreement shall
  be enforced in accordance with their terms. Borrower, and Bank represent and
  warrant to each other that each is duly authorized to execute and deliver this
  Agreement on their respective behalves.</p>
<p>25. <u>Counterparts</u>. This Agreement may be executed in two or more counterparts
  each of which shall constitute an original and all of which shall, when taken
  together, constitute one and the same agreement, notwithstanding that all parties
  may not have signed all counterparts of this Agreement.</p>
<p align="center">[Signatures Appear on the Following Page]<br>
  <br>
</p>
<p align="center"><br>
  9</p>
<hr>
<p>IN WITNESS WHEREOF, the parties hereto have executed, or caused this Agreement
  to be executed by the respective officer or authorized signatory thereunto duly
  authorized, as of the date first written above.</p>
<p><font face="Times New Roman, Times, serif"><br>
  </font></p>
<table width="890" border="0" cellspacing="0" cellpadding="0" align="center">
  <tr>
    <td width="508" valign="top" height="17">&nbsp;</td>
    <td width="376" height="17"><b>Bank:</b></td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top" height="2">&nbsp;</td>
    <td width="376" height="2">SILICON VALLEY BANK</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">By: <font face="Times New Roman, Times, serif"
      size=3><u>&nbsp;&nbsp;/s/ Aman Johal&nbsp;&nbsp;</u></font><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">Name: Aman Johal</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">Title: Relationship Manager</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376"><b>Borrower:</b></td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">SOCKET MOBILE, INC.</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">&nbsp;</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">By: <font face="Times New Roman, Times, serif"
      size=3><u>&nbsp;&nbsp;/s/ David W. Dunlap&nbsp;&nbsp;</u></font><font face="Times New Roman, Times, serif"></font></td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">Name: David W. Dunlap</td>
  </tr>
  <tr>
    <td width="508" valign="top">&nbsp;</td>
    <td width="376">Title: Chief Financial Officer</td>
  </tr>
</table>
<p><font face="Times New Roman, Times, serif"><br>
  <br>
  <br>
  </font></p>
<p align="center">&nbsp;</p>
<hr>
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