[SILICON VALLEY BANK LOGO]
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of October 27, 2004, between
SILICON VALLEY BANK, a California chartered bank, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 (FAX 408-654-6212) ("Bank") and PEERLESS SYSTEMS
CORPORATION, a Delaware corporation and PEERLESS SYSTEMS IMAGING PRODUCTS, INC., a
Washington corporation, with offices at 2381 Rosecrans Avenue, El Segundo, California 90245 (FAX 310-536-
9460) (jointly and severally, the "Borrower"), provides the terms on which Bank shall lend to Borrower and
Borrower shall repay Bank. The parties agree as follows:
1 ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and
determinations must be made following GAAP. The term "financial statements" includes the notes and schedules.
The terms "including" and "includes" always mean "including (or includes) without limitation," in this or any Loan
Document. Capitalized terms in this Agreement shall have the meanings set forth in Section 13. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meanings provided by the Code, to the
extent such terms are defined therein.
2 LOAN AND TERMS OF PAYMENT
2.1 PROMISE TO PAY. Borrower hereby unconditionally promises to pay Bank the unpaid principal amount of
all Advances hereunder with all interest, fees and finance charges due thereon as and when due in accordance
with this Agreement.
2.1.1 FINANCING OF ACCOUNTS.
(a) Availability. Subject to the terms of this Agreement, Borrower may request that Bank finance specific Eligible
Accounts. Bank may, in its good faith business discretion, finance such Eligible Accounts by extending credit to
Borrower in an amount equal to the result of the Advance Rate multiplied by the face amount of the Eligible
Account (the "Advance"). Bank may, in its sole discreti