Common use of BORROWER REPRESENTS AND WARRANTS AS FOLLOWS Clause in Contracts

BORROWER REPRESENTS AND WARRANTS AS FOLLOWS. Borrower 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, each jurisdiction for which the failure to so qualify would have a material adverse effect on Borrower's business or operations. The execution, delivery and performance of this Agreement has been duly authorized, and does not conflict with Borrower's organizational documents or constitute an Event of Default under any material agreement by which Borrower is bound. Borrower is not in default under any material agreement to which or by which it is bound. Borrower has good title to the Collateral. All inventory is in all material respects of good and marketable quality, free from material defects. Borrower is not an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act. 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 with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, for which the failure to comply with would have a material adverse effect on Borrower's business or operations. None of Borrower's properties or assets has been used by Borrower, to the best of Borrower's knowledge, by previous persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower has timely filed all required tax returns and paid, or made adequate provision to pay, all taxes. Borrower has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all government authorities for which the failure to so obtain would have a material adverse effect on Borrower's business or operations. All representations and warranties in the Agreement are true and correct in all material respects on this date. Sincerely, SIGNATURE TITLE DATE

BORROWER REPRESENTS AND WARRANTS AS FOLLOWS. 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, each jurisdiction for 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 qualify would have could not reasonably be expected to cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. The execution, delivery and performance of this Agreement has the Loan Documents have been duly authorized, and does do not conflict with Borrower's organizational documents or documents, nor constitute an Event event of Default default under any material agreement by which Borrower is bound. Borrower is not in default under any material agreement to which or by which it is boundbound in which the default could reasonably be expected to cause a Material Adverse Change. 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. Borrower is not an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act. 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, for the violation of which the failure could reasonably be expected to comply with would have cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. None of Borrower's or any Subsidiary's properties or assets has been used by BorrowerBorrower or any Subsidiary or, to the best of Borrower's knowledge, by previous personsPersons, 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 for which that are necessary to continue its business as currently conducted except where the failure to so obtain or make such consents, declarations, notices or filings would have not reasonably be expected to cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. All representations and warranties in the Agreement are true and correct in all material respects on this date, and the Borrower represents that there is no existing Event of Default. SincerelyPLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN. ------------------------------------------------------ ---------------------------------------- --------------------- REPORTING COVENANT REQUIRED COMPLIES ------------------------------------------------------ ---------------------------------------- --------------------- ------------------------------------------------------ ---------------------------------------- --------------------- Monthly financial statements with Monthly within 30 days Yes No Compliance Certificate ------------------------------------------------------ ---------------------------------------- --------------------- Monthly A/R, SIGNATURE TITLE DATEA/P agings and Inventory Reports Monthly within 30 days Yes No ------------------------------------------------------ ---------------------------------------- --------------------- Annual financial statement (CPA Audited) + XX XXX within 120 days Yes No ------------------------------------------------------ ---------------------------------------- --------------------- 10-Q, 10-K and 8-K Within 5 days after filing with SEC Yes No ------------------------------------------------------ ---------------------------------------- --------------------- Board approved financial projections Within 30 days after beginning of fiscal Yes No year ------------------------------------------------------ ---------------------------------------- --------------------- ------------------------------------------------------ ---------------------------------------- --------------------- --------------------------------------------------------------------------------------------------------------------- NET CASH CALCULATION UNDER THE REVOLVING LINE OF CREDIT ------------------------------------------------------ -------------------------------------------------------------- Cash as of period ending ___________ $_______________ ------------------------------------------------------ -------------------------------------------------------------- Current SVB Revolving Loan Outstanding Amount (net) $(_______________) ------------------------------------------------------ -------------------------------------------------------------- NET CASH BALANCE $_______________ ------------------------------------------------------ -------------------------------------------------------------- The following are the exceptions with respect to the certification above: (If no exceptions exist, state "No exceptions to note.") -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- I/O MAGIC CORPORATION AGENT USE ONLY Received by: _____________________ By:____________________________ AUTHORIZED SIGNER Name: _________________________ Date: ___________________________ Title: ________________________ Verified: ________________________ IOM HOLDINGS, INC. AUTHORIZED SIGNER Date: ___________________________ By:____________________________ Compliance Status: Yes No Name: _________________________ Title: ________________________

BORROWER REPRESENTS AND WARRANTS AS FOLLOWS. 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, each jurisdiction for 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 qualify would have could not reasonably be expected to cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. The execution, delivery and performance of this Agreement has the Loan Documents have been duly authorized, and does do not conflict with Borrower's organizational documents or documents, nor constitute an Event event of Default default under any material agreement by which Borrower is bound. Borrower is not in default under any material agreement to which or by which it is boundbound in which the default could reasonably be expected to cause a Material Adverse Change. 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. Borrower is not an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act. 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, for the violation of which the failure could reasonably be expected to comply with would have cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. None of Borrower's or any Subsidiary's properties or assets has been used by BorrowerBorrower or any Subsidiary or, to the best of Borrower's knowledge, by previous personsPersons, 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 for which that are necessary to continue its business as currently conducted except where the failure to so obtain or make such consents, declarations, notices or filings would have not reasonably be expected to cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. Borrower is in compliance with the Financial Covenant(s) set forth in Section 6.6 of the Agreement. All representations and warranties in the Agreement are true and correct in all material respects on this date, and the Borrower represents that there is no existing Event of Default. Sincerely, SIGNATURE TITLE DATESignature ____________________________ Title ____________________________ Date ____________________________

BORROWER REPRESENTS AND WARRANTS AS FOLLOWS. 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, each jurisdiction for 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 qualify would have could not reasonably be expected to cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. The execution, delivery and performance of this Agreement has the Loan Documents have been duly authorized, and does do not conflict with Borrower's organizational documents or documents, nor constitute an Event event of Default default under any material agreement by which Borrower is bound. Borrower is not in default under any material agreement to which or by which it is boundbound in which the default could reasonably be expected to cause a Material Adverse Change. 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. Borrower is not an "investment company" or a company "controlled" by an "investment company" under the Investment Company Act. 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, for the violation of which the failure could reasonably be expected to comply with would have cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. None of Borrower's or any Subsidiary's properties or assets has been used by BorrowerBorrower or any Subsidiary or, to the best of Borrower's knowledge, by previous personsPersons, 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 for which that are necessary to continue its business as currently conducted except where the failure to so obtain or make such consents, declarations, notices or filings would have not reasonably be expected to cause a material adverse effect on Borrower's business or operationsMaterial Adverse Change. Borrower is in compliance with the Financial Covenant(s) set forth in Section 6.6 of the Agreement. All representations and warranties in the Agreement are true and correct in all material respects on this date, and the Borrower represents that there is no existing Event of Default. Sincerely, SIGNATURE TITLE DATESignature ________________________________ Title ________________________________ Date ________________________________ EXHIBIT B [SILICON VALLEY BANK LOGO] SILICON VALLEY BANK SPECIALTY FINANCE DIVISION COMPLIANCE CERTIFICATE I, as authorized officer of Peerless Systems Imaging Products, Inc. ("Borrower") certify under the Loan and Security Agreement (the "Agreement") between Borrower and Silicon Valley Bank ("Bank") as follows (all capitalized terms used herein shall have the meaning set forth in the Agreement): BORROWER REPRESENTS AND WARRANTS FOR EACH FINANCED RECEIVABLE: Each Financed Receivable is an Eligible Account. Borrower is the owner with legal right to sell, transfer, assign and encumber such Financed Receivable; The correct amount is on the Invoice Transmittal and is not disputed; Payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the Invoice Transmittal date; 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; There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount; It reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings; It has not filed or had filed against it Insolvency Proceedings and does not anticipate any filing; Bank has the right to endorse and/ or require Borrower to endorse all payments received on Financed Receivables and all proceeds of Collateral. 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.