Exhibit 10.4.2
                                                  							    ---------------

                               BUSINESS LOAN AGREEMENT


                    This Agreement dated as of February 7, 1996, is between
          Bank of America National Trust and Savings Association (the
          "Bank") and Separation and Recovery Systems, Inc. (the
          "Borrower").


          1.   FACILITY NO. 1:  LINE OF CREDIT AMOUNT AND TERMS

          1.1  LINE OF CREDIT AMOUNT.

          (a)  During the availability period described below, the Bank
               will provide a line of credit to the Borrower.  The amount
               of the line of credit (the "Facility No. 1 Commitment") is
               One Million Dollars ($1,000,000).

          (b)  This is a revolving line of credit with a within line
               facility for letters of credit.  During the availability
               period, the borrower may repay principal amounts and
               reborrow them.

          (c)  The Borrower agrees not to permit the outstanding principal
               balance of the line of credit plus the outstanding amounts
               of any letters of credit, including amounts drawn on letters
               of credit and not yet reimbursed, to exceed the Facility
               No. 1 Commitment.


          1.2  AVAILABILITY PERIOD.  The line of credit is available
          between the date of this Agreement and December 31, 1996 (the
          "Facility No. 1 Expiration Date") unless the Borrower is in
          default.


          1.3  INTEREST RATE.

          (a)  Unless the Borrower elects an optional interest rate as
               described below, the interest rate is the Bank's Reference
               Rate plus three-eights (0.375) of one percentage point.

          (b)  The Reference Rate is the rate of interest publicly
               announced from time to time by the bank in San Francisco,
               California, as its Reference Rate.  The Reference Rate is
               set by the Bank based on various factors, including the
               Bank's costs and desired return, general economic conditions
               and other factors, and is used as a reference point for
               pricing some loans.  The Bank may price loans to its
               customers at, above, or below the Reference Rate.  Any
               change in the Reference Rate shall take effect at the
               opening of business on the day specified in the public
               announcement of a change in the Bank's Reference Rate.


          1.4  REPAYMENT TERMS.

          (a)  The Borrower will pay interest on March 1, 1996, and then
               monthly thereafter until payment in full of any principal
               outstanding under this line of credit.

          (b)  The Borrower will repay in full all principal and any unpaid
               interest or other charges outstanding under this line of
               credit no later than the Facility No. 1 Expiration Date. 
               Any amount bearing interest at an optional interest rate (as
               described below) may be repaid at the end of the applicable
               interest period, which shall be no later than the Facility
               No. 1 Expiration Date.


          1.5  OPTIONAL INTEREST RATES.  Instead of the interest rate based
          on the Bank's Reference Rate, the Borrower may elect to have all
          or portions of the line of credit (during the availability
          period) bear interest at the rate(s) described below during an
          interest period agreed to by the Bank and the Borrower.  Each
          interest rate is a rate per year.  Interest will be paid on the
          last day of each interest period, and, if the interest period is
          long than 30 days, then on the first day each month during the
          interest period.  At the end of any interest period, the interest
          rate will revert to the rate based on the Reference Rate, unless
          the Borrower has designated another optional interest rate for
          the portion.


          1.6  FIXED RATE.  The Borrower may elect to have all or portions
          of the principal balance of the line of credit bear interest at
          the Fixed Rate, subject to the following requirements:

          (a)  The "Fixed Rate" means the fixed rate the Bank and the
               Borrower agree will apply to the portion during the
               applicable interest period.

          (b)  The interest period during which the Fixed Rate will be in
               effect will be no shorter than 14 days and no longer than
               one year.

          (c)  Each Fixed Rate portion will be for an amount not less than
               Five Hundred Thousand Dollars ($500,000).

          (d)  The Borrower may not elect a Fixed Rate with respect to any
               portion f the principal balance of the line of credit which
               is scheduled to be repaid before the last day of the
               applicable interest period.

          (e)  Any portion of the principal balance of the line of credit
               already bearing interest at the Fixed Rate will not be
               converted to a different rate during its interest period.

          (f)  Each prepayment of a Fixed Rate portion, whether voluntary,
               by reason of acceleration or otherwise, will be accompanied
               by the amount of accrued interest on the amount prepaid, and
               a prepayment fee equal to the amount (if any) by which:

               (i)   the additional interest which would have been payable
                     on the amount prepaid had it not been paid until the
                     last day of the interest period, exceeds

               (ii)  the interest which would have been recoverable by the
                     Bank by placing the amount prepaid on deposit in the
                     certificate of deposit market for a period staring on
                     the date on which it was prepaid and ending on the
                     last day of the interest period for such portion.


          1.7  LETTERS OF CREDIT.  This line of credit may be used for
          financing:

               (i)   commercial letters of credit with a maximum maturing
                     of 365 days but not to extend more than 90 days beyond
                     the Facility No. 1 Expiration Date.  Each commercial
                     letter of credit will require drafts payable at sight.

               (ii)  standby letters of credit with a maximum maturing of
                     365 days but not to extend more than 90 days beyond
                     the Facility No. 1 Expiration Date.

               (iii) The amount of letters of credit outstanding at any one
                     time, (including amounts drawn on letters of credit
                     and not yet reimbursed), may not exceed Five Hundred
                     Thousand Dollars ($500,000).


          The Borrower agrees:

          (a)  any sum drawn under a letter of credit may, at the option of
               the Bank, be added to the principal amount outstanding under
               this Agreement.  The amount will bear interest and be due as
               described elsewhere in this Agreement.

          (b)  if there is a default under this Agreement, to immediately
               prepay and make the Bank whole for any outstanding letters
               of credit.

          (c)  the issuance of any letter of credit and any amendment to a
               letter of credit is subject to the Bank's written approval
               and must be in form and content satisfactory to the Bank and
               in favor of a beneficiary acceptable to the Bank.

          (d)  to sign the Bank's form Application and Agreement for
               Commercial Letter of Credit or Application and Agreement for
               Standby Letter of Credit.

          (e)  to allow the Bank to automatically charge its checking
               account for applicable fees, discounts, and other charges.


          2.   FACILITY NO. 2:  LINE OF CREDIT AMOUNT AND TERMS

          2.1  LINE OF CREDIT AMOUNT.

          (a)  During the availability period described below, the Bank
               will provide a line of credit to the Borrower.  The amount
               of the line of credit (the "Facility No. 2 Commitment") is
               Three Million Dollars ($3,000,000).

          (b)  This is a non-revolving line of credit with a term repayment
               option.  Any amount borrowed, even if repaid before the end
               of the availability period, permanently reduces the
               remaining available line of credit.

          (c)  The Borrower agrees not to permit the outstanding principal
               balance of the line of credit to exceed the Facility No. 2
               Commitment.


          2.2  AVAILABILITY PERIOD.  The line of credit is available
          between the date of this Agreement and December 31, 1996 (the
          "Facility No. 2 Expiration Date") unless the Borrower is in
          default.


          2.3  OUTSTANDING TERM LOAN.  There is outstanding from the Bank
          to the Borrower a term loan in the original principal amount of
          Six Hundred Fifty Thousand Dollars ($650,000).  This term loan is
          currently subject to the terms and conditions of Facility No. 2
          of the Business Loan Agreement dated December 21, 1994.  As of
          the date of this Agreement, the term loan shall be deemed to be
          outstanding as Facility No. 2 under this Agreement, and shall be
          subject to all the terms and conditions stated in this Agreement.


          2.4  INTEREST RATE.  Unless the Borrower elects an optional
          interest rate as described below, the interest rate is the Bank's
          Reference Rate plus three-eighths (0.375) of one percentage
          point.


          2.5  REPAYMENT TERMS.  

          (a)  The Borrower will pay interest on March 1, 1996, and then
               monthly thereafter until payment in full of any principal
               outstanding under this line of credit.

          (b)  The Borrower will repay the principal amount outstanding on
               the Facility No. 2 Expiration Date in 36 successive equal
               monthly installments starting January 31, 1997.  On
               December 31, 1999, the Borrower will repay the remaining
               principal balance plus any interest then due.

          (c)  The Borrower may prepay the loan in full or in part at any
               time.  The prepayment will be applied to the most remote
               installment of principal due under this Agreement.


          2.6  OPTIONAL INTEREST RATES.  Instead of the interest rate based
          ont he Bank's Reference Rate, the Borrower may elect to have all
          or portions of the loan (during the term repayment period) bear
          interest at the rate(s) described below during an interest period
          agreed to by the Bank and the Borrower.  Each interest rate is a
          rate per year.  Interest will be paid on the last day of each
          interest period, and, if the interest period is long than 30
          days, then on the first day each month during the interest
          period.  At the end of any interest period, the interest rate
          will revert to the rate based ont he Reference Rate, unless the
          Borrower has designated another optional interest rate for the
          portion.


          2.7  FIXED RATE.  The Borrower may elect to have all or portions
          of the principal balance of the loan bear interest at the Fixed
          rate, subject to the following requirements:

          (a)  The "Fixed Rate" means the fixed interest rate the Bank and
               the Borrower agree will apply to the portion during the
               applicable interest period.

          (b)  The interest period during which the Fixed Rate will be in
               effect will be no shorter than 14 days and no longer than
               one year.

          (c)  Each Fixed Rate portion will be for an amount not less than
               Five Hundred Thousand Dollars ($500,000).

          (d)  The Borrower may not elect a Fixed Rate with respect to any
               portion of the principal balance of the loan which is
               scheduled to be repaid before the last day of the applicable
               interest period.

          (e)  Any portion of the principal balance of the loan already
               bearing interest at the Fixed Rate will not be converted to
               a different rate during its interest period.

          (f)  Each prepayment of a Fixed Rate portion, whether voluntary,
               by reason of acceleration or otherwise, will be accompanied
               by the amount of accrued interest on the amount prepaid, and
               a prepayment fee equal to the amount (if any) by which:


               (i)   the additional interest which would have been payable
                     on the amount prepaid had it not been paid until the
                     last day of the interest period, exceeds

               (ii)  the interest which would have been recoverable by the
                     Bank by placing the amount prepaid on deposit in the
                     certificate of deposit market for a period starting on
                     the date on which it was prepaid and ending on the
                     last day of the interest period for such portion.


          3.   FACILITY NO. 3:  LINE OF CREDIT AMOUNT AND TERMS

          3.1  LINE OF CREDIT AMOUNT.

          (a)  During the availability period described below, the Bank
               will provide a line of credit to the Borrower.  The amount
               of the line of credit (the "Facility No. 3 Commitment") is
               One Million Four Hundred Thousand Dollars ($1,400,000).

          (b)  This is a non-revolving line of credit with a term repayment
               option.  Any amount borrowed, even if repaid before the end
               of the availability period, permanently reduces the
               remaining available line of credit.

          (c)  The Borrower agrees not to permit the outstanding principal
               balance of the line of credit to exceed the Facility No. 3
               Commitment.


          3.2  AVAILABILITY PERIOD.  The line of credit is available
          between the date of this Agreement and June 30, 1996 (the
          "Facility No. 3 Expiration Date") unless the Borrower is in
          default.


          3.3  INTEREST RATE.  Unless the Borrower elects an optional
          interest rate as described below, the interest rate is the Bank's
          Reference Rate plus three-eighths (0.375) of one percentage
          point.


          3.4  REPAYMENT TERMS.

          (a)  The Borrower will pay interest on March 1, 1996, and then
               monthly thereafter until payment in full of any principal
               outstanding under this line of credit.

          (b)  The Borrower will repay the principal amount outstanding on
               the Facility No. 3 Expiration Date in 14 successive equal
               monthly installments starting July 31, 1996.  On August 30,
               1997, the Borrower will repay the remaining principal
               balance plus any interest then due.
          (c)  The Borrower may prepay the loan in full or in part at any
               time.  The prepayment will be applied to the most remote
               installment of principal due under this Agreement.


          3.5  OPTIONAL INTEREST RATES.  Instead of the interest rate based
          on the Bank's Reference Rate, the Borrower may elect to have all
          or portions of the loan (during the term repayment period) bear
          interest at the rate(s) described below during an interest period
          agreed to by the Bank and the Borrower.  Each interest rate is a
          rate per year.  Interest will be paid on the last day of each
          interest period, and, if the interest period is longer than 30
          days, then on the first day each month during the interest
          period.  At the end of any interest period, the interest rate
          will revert to the rate based on the Reference Rate, unless the
          Borrower has designated another optional interest rate for the
          portion.


          3.6  FIXED RATE.  The Borrower may elect to have all or portions
          of the principal balance of the loan bear interest at the Fixed
          Rate, subject to the following requirements:

          (a)  The "Fixed Rate" means the fixed interest rate the Bank and
               the Borrower agree will apply to the portion during the
               applicable interest period.

          (b)  The interest period during which the Fixed Rate will be in
               effect will be no shorter than 14 days and no longer than
               one year.

          (c)  Each Fixed Rate portion will be for an amount not less than
               Five Hundred Thousand Dollars ($500,000).

          (d)  The Borrower may not elect a Fixed Rate with respect to any
               portion of the principal balance of the loan which is
               scheduled to be repaid before the last day of the applicable
               interest period.

          (e)  Any portion of the principal balance of the loan already
               bearing interest at the Fixed Rate will not be converted to
               a different rate during its interest period.

          (f)  Each prepayment of a Fixed Rate portion, whether voluntary,
               by reason of acceleration or otherwise, will be accompanied
               by the amount of accrued interest on the amount prepaid, and
               a prepayment fee equal to the amount (if any) by which:

               (i)   the additional interest which would have been payable
                     on the amount prepaid had it not been paid until the
                     last day of the interest period, exceeds

               (ii)  the interest which would have been recoverable by the
                     Bank by placing the amount prepaid on deposit in the
                     certificate of deposit market for a period starting on
                     the date on which it was prepaid and ending on the
                     last day of the interest period for such portion.


          4.   FEES AND EXPENSES

          4.1  UNUSED COMMITMENT FEE (FACILITY NO. 1).  The Borrower agrees
          to pay a fee on any difference between the Facility No. 1
          Commitment and the amount of credit it actually uses, determined
          by the weighted average loan balance maintained during the
          specified period.  The fee will be calculated at .50% per year. 
          this fee is due on March 31, 1996, and on the last day of each
          following quarter until the Facility No. 1 Expiration Date.

          4.2  EXPENSES.

          (a)  The Borrower agrees to immediately repay the Bank for
               expenses that include, but are not limited to, filing,
               recording and search fees, appraisal fees, title report fees
               and documentation fees.

          (b)  The Borrower agrees to reimburse the Bank for any expenses
               it incurs in the preparation of this Agreement and any
               agreement or instrument required by this Agreement. 
               Expenses include, but are not limited to, reasonable
               attorneys' fees, including any allocated costs of the Bank's
               in-house counsel.

          (c)  The Borrower agrees to reimburse the Bank for the cost of
               periodic audits and appraisals of the personal property
               collateral securing this Agreement, at such intervals as the
               Bank may reasonably require.  The audits and appraisals may
               be performed by employees of the Bank or by independent
               appraisers.


          5.   COLLATERAL

          5.1  PERSONAL PROPERTY.  The Borrower's obligations to the Bank
          under this Agreement will be secured by personal property the
          Borrower now owns or will own in the future s listed below.  The
          collateral is further defined in security agreement(s) executed
          by the Borrower.  In addition, all personal property collateral
          securing this Agreement shall also secure all other present and
          future obligations of the Borrower to the Bank (excluding any
          consumer credit covered by the federal Truth in Lending law,
          unless the Borrower has otherwise agreed in writing).  All
          personal property collateral securing any other present or future
          obligations of the borrower to the Bank shall also secure this
          Agreement.

          (a)  Receivables and general intangibles.

          (b)  Inventory.

          (c)  Machinery and equipment.


          6.   DISBURSEMENTS, PAYMENTS AND COSTS

          6.1  REQUESTS FOR CREDIT.  Each request for an extension of
          credit will be made in writing in a manner acceptable to the
          Bank, or by another means acceptable to the Bank.


          6.2  DISBURSEMENTS AND PAYMENTS.  Each disbursement by the Bank
          and each payment by the Borrower will be:

          (a)  made at the Bank's branch (or other location) selected by
               the Bank from time to time;

          (b)  made for the account of the Bank's branch selected by the
               Bank from time to time;

          (c)  made in immediately available funds, or such other type of
               funds selected by the Bank;

          (d)  evidenced by records kept by the Bank.  In addition, the
               Bank may, at its discretion, require the Borrower to sign
               one or more promissory notes.


          6.3  TELEPHONE AUTHORIZATION.

          (a)  The Bank may honor telephone instructions for advances or
               repayments or for the designation of option interest rates
               given by any one of the individuals authorized to sign loan
               agreements on behalf of the Borrower, or any other
               individual designated by any one of such authorized signers.

          (b)  Advances will be deposited in and repayments will be
               withdrawn from the Borrower's account number 14569-50093, or
               such other of the Borrower's accounts with the Bank as
               designated in writing by the Borrower.

          (c)  The Borrower indemnifies and excuses the Bank (including its
               officers, employees, and agents) from all liability, loss,
               and costs in connection with any act resulting rom telephone
               instructions it reasonably believes are made by any
               individual authorized by the Borrower to give such
               instructions.  This indemnity and excuse will survive this
               Agreement.


          6.4  DIRECT DEBIT.

          (a)  The Borrower agrees that interest principal payments and any
               fees will be deducted automatically on the due date from
               checking account number 14569-500093.

          (b)  The Bank will debit the account on the dates the payments
               become due.  If a due date does not fall on a banking day,
               the Bank will debit the account on the first banking day
               following the due date.

          (c)  The Borrower will maintain sufficient funds in the account
               on the dates the Bank enters debits authorized by this
               Agreement.  If there are insufficient funds in the account
               on the date the Bank enters any debit authorized by this
               Agreement, the debit will be reversed.


          6.5  BANKING DAYS.  Unless otherwise provided in this Agreement a
          banking day is a day other than a Saturday or a Sunday on which
          the Bank is open for business in California.  All payments and
          disbursements which would be due on a day which is not a banking
          day will be due on the next banking day.  All payments received
          on a day which is not a banking day will be applied to the credit
          on the next banking day.


          6.6  TAXES.  The Borrower will not deduct any taxes from any
          payment sit makes to the Bank.  If any government authority
          imposes any taxes on any payments made by the Borrower, the
          Borrower will pay the taxes and will also pay to the Bank, at the
          time interest is paid, any additional amount which the Bank
          specifies as necessary to preserve the after-tax yield the Bank
          would have received if such taxes had not been imposed.  Upon
          request by the Bank, the Borrower will confirm that it has paid
          the taxes by giving the Bank official tax receipts (or notarized
          copies) within 30 days after the due date.  However, the Borrower
          will not pay the Bank's net income taxes.


          6.7  ADDITIONAL COSTS.  The Borrower will pay the Bank, on
          demand, for the Bank's costs or losses arising from any statute
          or regulation, or any request or requirement of a regulatory
          agency which is applicable to all national banks or a class of
          all national banks.  The costs and losses will be allocated to
          the loan in a manner determined b the Bank, using any reasonable
          method.  The costs include the following:

          (a)  any reserve or deposit requirements; and

          (b)  any capital requirements relating to the Bank's assets and
               commitments for credit.


          6.8  INTEREST CALCULATION.  Except as otherwise stated in this
          Agreement, all interest and fees, if any, will be computed on the
          basis of a 360-day year and the actual number of days elapsed. 
          This results in more interest or a higher fee than if a 365-day
          year is used.


          6.9  INTEREST ON LATE PAYMENTS.  At the Bank's sole option in
          each instance, any amount not paid when due under this Agreement
          (including interest) shall bear interest from the due date at the
          Bank's Reference Rate plus one and one-half (1.50) percentage
          points.  this may result in compounding of interest.


          7.   CONDITIONS

          The Bank must receive the following items, in form and content
          acceptable to the Bank, before it is required to extend any
          credit to the Borrower under this Agreement.

          7.1  AUTHORIZATIONS.  Evidence that the execution, delivery and
          performance by the Borrower and any guarantor) of this Agreement
          and any instrument or agreement required under this Agreement
          have been duly authorized.


          7.2  SECURITY AGREEMENTS.  Signed original security agreements,
          assignments, financing statements and fixture filings (together
          with collateral in which the Bank requires a possessory security
          interest), which the Bank requires.


          7.3  EVIDENCE OF PRIORITY.  Evidence that security interests and
          liens in favor of the Bank are valid, enforceable, and prior to
          all others' rights and interests, except those the Bank consents
          to in writing.


          7.4  INSURANCE.  Evidence of insurance coverage, as required in
          the "Covenants" section of this Agreement.


          7.5  OTHER ITEMS.  Any other items that the Bank reasonably
          requires.


          8.   REPRESENTATIONS AND WARRANTIES

          When the Borrower signs this Agreement, and until the Bank is
          repaid in full, the Borrower makes the following representations
          and warranties.  Each request for an extension of credit
          constitutes a renewed representation.

          8.1  ORGANIZATION OF BORROWER.  The Borrower is a corporation
          duly formed and existing under the laws of the state where
          organized.


          8.2  AUTHORIZATION.  This Agreement, and any instrument or
          agreement required hereunder, are within the Borrower's powers,
          have been duly authorized, and do not conflict with any of its
          organization papers.


          8.3  ENFORCEABLE AGREEMENT.  This Agreement is a legal, valid and
          binding agreement of the Borrower, enforceable against the
          Borrower in accordance with its terms, and any instrument or
          agreement required hereunder, when executed and delivered, will
          be similarly legal, valid, binding and enforceable.


          8.4  GOOD STANDING.  In each state in which the Borrower does
          business, it is properly 
          licensed, in good standing, and, where required, in compliance
          with fictitious name statutes.


          8.5  NO CONFLICTS.  This Agreement does not conflict with any
          law, agreement, or obligation by which the Borrower is bound.


          8.6  FINANCIAL INFORMATION.  All financial and other information
          that has been or will be supplied to the Bank, including the
          Borrower's financial statement dated as of June 30, 1995, is:

          (a)  sufficiently complete to vie the Bank accurate knowledge of
               the Borrower's ( and any guarantor's) financial condition.

          (b)  in form and content required by the Bank.

          (c)  in compliance with all government regulations that apply.

          Since the date of the financial statement specified above, there
          has been no material adverse change in the assets or the
          financial condition of the Borrower (or any guarantor).


          8.7  LAWSUITS.  There is no lawsuit, tax claim or other dispute
          pending or threatened against the Borrower, which, if lost, would
          impair the borrower's financial condition or ability to repay the
          loan, except as have been disclosed in writing to the Bank.


          8.8  COLLATERAL.  All collateral required in this Agreement is
          owned by the grantor of the security interest free of any title
          defects or any liens or interests of others.

          8.9  PERMITS, FRANCHISES.  The Borrower possesses all permits,
          memberships, franchises, contracts and licenses required and all
          trademark rights, trade name rights, patent rights and fictitious
          name rights necessary to enable it to conduct the business in
          which it is now engaged.


          8.10 OTHER OBLIGATIONS.  The Borrower is not in default on any
          obligation for borrowed money, any purchase money obligation or
          any other material lease, commitment, contract, instrument or
          obligation.


          8.11 INCOME TAX RETURNS.  The Borrower had no knowledge of any
          pending assessments or adjustments of its income tax for any
          year.


          8.12 NO EVENT OF DEFAULT.  There is no event which is, or with
          notice or lapse of time or both would be, a default under this
          Agreement.


          8.13 ERISA PLANS.

          (a)  the Borrower has fulfilled its obligations, if any, under
               the minimum funding standards of ERISA and the Code with
               respect to each Plan and is in compliance in all material
               respects with the presently applicable provisions of ERISA
               and the Code, and has not incurred any liability with
               respect to any Plan under title IV of ERISA.

          (b)  No reportable event has occurred under Section 4043(b) of
               ERISA for which the PBGC requires 30 day notice.

          (c)  No action by the Borrower to terminate or withdraw from any
               Plan has been taken and no notice of intent to terminate a
               Plan has been filed under Section 4041 of ERISA.

          (d)  No proceeding has been commenced with respect to a Plan
               under Section 4042 of ERISA, and no event has occurred or
               condition exists which might constitute grounds for the
               commencement of such a proceeding.

          (e)  The following terms have the meanings indicated for purposes
               of this Agreement:

               (i)   "Code" means the Internal Revenue Code of 1986, as
                     amended from time to time.

               (ii)  "ERISA" means the Employee Retirement Income Act of
                     1974, as amended from time to time.

               (iii) "PBGC" means the Pension Benefit Guaranty Corporation
                     established pursuant to Subtitle A of Title IV of
                     ERISA.

               (iv)  "Plan" means any employee pension benefit plan
                     maintained or contributed to by the Borrower and
                     insured by the Pension Benefit Guaranty Corporation
                     under Title IV of ERISA.


          8.14 LOCATION OF BORROWER.  The Borrower's place of business (or,
          if the Borrower has more than one place of business, its chief
          executive office) is located at the address listed under the
          Borrower's signature on this Agreement.


          9.   COVENANTS

          The Borrower agrees, so long as credit is available under this
          Agreement and until the Bank is repaid in full:


          9.1  USE OF PROCEEDS.  To use the proceeds of Facility No. 1 only
          for working capital and issuance of letters of credit; and to use
          the proceeds of Facility No. 2 and facility No. 3 only for
          capital expenditures.


          9.2  FINANCIAL INFORMATION.  To provide the following financial
          information and statements and such additional information as
          requested by the Bank from time to time:

          (a)  Within 120 days of the Borrower's fiscal year end, the
               Borrower's annual financial statements.  These financial
               statements must be audited (with an unqualified opinion) by
               a Certified Public Accountant ("CPA") acceptable to the
               Bank.  The statements shall be prepared on a consolidated
               basis.

          (b)  Within 45 days of the period's end, the Borrower's quarterly
               financial statements.  these financial statements may be
               Borrower prepared.  The statements shall be prepared on a
               solidated basis.

          (c)  Within the periods provided in (a) and (b) above, a
               compliance certificate of the Borrower signed by an
               authorized financial officer of the Borrower setting forth
               (i) the information and computations (in sufficient detail)
               to establish that the Borrower is in compliance with all
               financial covenants at the end of the period covered by the
               financial statements then being furnished and (ii) whether
               there existed as of the date of such financial statements
               and whether there exists as of the date of the certificate,
               any default under this Agreement and, if any such default
               exists, specifying the nature thereof and the action the
               Borrower is taking and proposes to take with respect
               thereto.

          (d)  Within 45 days of the period's end, the Borrower's quarterly
               equipment list.  This equipment list must include model
               number and location, and such other information as the Bank
               may require.


          9.3  QUICK RATIO.  To maintain on a consolidated basis a ratio of
          quick assets to current liabilities of at least 65:1, on a
          quarterly basis.  "Quick assets" means cash, short-term cash
          investments, net trade receivables and marketable securities not
          classified as long-term investments.


          9.4  TANGIBLE NET WORTH.  To maintain on a consolidated basis
          tangible net worth, on a quarterly basis, equal to at least the
          sum of the following:

          (a)  Seven Million Four Hundred Thousand Dollars ($7,400,000),
               plus

          (b)  75% of net income after income taxes earned in each annual
               accounting period commencing fiscal year ending June 30,
               1996.

          "Tangible net worth" means the gross book value of the Borrower's
          assets (excluding goodwill, patents, trademarks, trade names,
          ,organization expense, treasury stock, unamortized debt discount
          and expense, deferred research and development costs, deferred
          marketing expenses, and other like intangibles) less total
          liabilities, including but not limited to accrued and deferred
          income taxes, and any reserves against assets.


          9.5  TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO.  to maintain
          on a consolidated basis a ratio of total liabilities to tangible
          net worth not exceeding .75:1, on a quarterly basis.  "Total
          liabilities" means the sum of current liabilities plus long term
          liabilities.


          9.6  FIXED CHARGE COVERAGE RATIO.  To maintain on a consolidated
          basis a Fixed Charge Coverage Ratio of at least 1:40:1.  "Fixed
          charge Coverage Ratio" is defined as the (sum of net profit after
          taxes plus depreciation and interest expense minus non-financed
          capital expenditures) divided by (the sum of current maturities
                                ----------
          of long term debt plus capital leases and interest expense). 
          This ratio will be calculated at the end of each fiscal quarter,
          using the results of that quarter and each of the 3 immediately
          preceding quarters.  Current maturities of long term debt is
          defined as required principal payments for the four-quarter
          period measured.  Non-financed capital expenditures is defined as
          actual capital expenditures less positive increases in current
          maturities of long term debt and long term debt outstanding for
          the four-quarter period measured.


          9.7  LIMITATION ON LOSSES.  Not to incur on a consolidated basis
          a net loss before taxes and extraordinary items in any two
          consecutive quarterly accounting periods.


          9.8  OTHER DEBTS.  Not to have outstanding or incur any direct or
          contingent debts or lease obligations (other than those to the
          Bank), or become liable for the debts of others without the
          Bank's written consent.  This does not prohibit:

          (a)  Acquiring goods, supplies, or merchandise on normal trade
               credit.

          (b)  Endorsing negotiable instruments received in the usual
          course of business.

          (c)  Obtaining surety bonds in the usual course of business.

          (d)  Debts and leases in existence on the date of this Agreement
               disclosed in writing to the Bank in the Borrower's financial
               statement dated June 30, 1995.


          9.9  OTHER LIENS.  Not to create, assume, or allow any security
          interest or lien (including judicial liens) on property the
          Borrower now or later owns, except:

          (a)  Debts of trust and security agreements in favor of the Bank.

          (b)  Liens for taxes not yet due.


          9.10 DIVIDENDS.  Not to declare or pay any dividends on any of
          its shares except dividends payable in capital stock of the
          Borrower, and not to purchase, redeem or otherwise acquire for
          value any of its shares, or create any sinking fund in relation
          thereto.


          9.11 OUT OF DEBT PERIOD (FACILITY NO. 1).  To repay any advances
          in full, and not to draw any additional advances on its Facility
          No. 1 line of credit, for a period of at least 30 consecutive
          days in each line-year.  "Line-year" means the period between the
          date of this Agreement and December 31, 1996, and each subsequent
          one-year period (if any).  For the purposes of this paragraph,
          "advances" does not include undrawn amounts of outstanding
          letters of credit.

          9.12 NOTICES TO BANK.  To promptly notify the Bank in writing of:

          (a)  any lawsuit over Two Hundred Fifty Thousand Dollars
               (S250.000) against the Borrower (or any guarantor). 

          (b)  any substantial dispute between the Borrower (or any
               guarantor) and any government authority. 

          (c)  any failure to comply with this Agreement. 

          (d)  any material adverse change in the Borrower's (or any
               guarantor's) financial condition or operations. 

          (e)  any change in the Borrower's name, legal structure, place of
               business, or chief execute office if the Borrower has more
               than one place of business. 


          9.13 BOOKS AND RECORDS.  To maintain adequate books and records. 


          9.14 AUDITS.  To allow the Bank and its agents to inspect the
          Borrower's properties and examine, audit and make copies of books
          and records at any reasonable time. If any of the Borrower's
          properties, books or records are in the possession of a third
          party, the Borrower authorizes that third party to permit the
          Bank or its agents to have access to perform inspections or
          audits and to respond to the Bank's requests for information
          concerning such properties, books and records. 


          9.15 COMPLIANCE WITH LAWS. To comply with the laws including any
          fictitious name statute), regulations, and orders of any
          government body with authority over the Borrower's business. 


          9.16 PRESERVATION OF RIGHTS. To maintain and preserve all rights,
          privileges, and franchises the Borrower now has. 


          9.17 MAINTENANCE OF PROPERTIES.  To make any repairs, renewals,
          or replacements to keep the Borrower's properties in good working
          condition. 


          9.18 PERFECTION OF LIENS. To help the Bank perfect and protect
          its security interests and liens, and reimburse it for related
          costs it incurs to protect its security interests and liens. 


          9.19 COOPERATION.  To take any action requested by the Bank to
          carry out the intent of this Agreement. 

          9.20 INSURANCE.

          (a)  Insurance Covering Collateral. To maintain all risk property
               damage insurance policies covering the tangible property
               comprising the collateral. Each insurance policy must be in
               an amount acceptable to the Bank. The insurance must be
               issued by an insurance company acceptable to the Bank and
               must include a lender's loss payable endorsement in favor of
               the Bank in a form acceptable to the Bank. 

          (b)  General Business Insurance. To maintain insurance as is
               usual for the business it is in. 

          (c)  Evidence of Issuance. Upon the request of the Bank, to
          deliver to the Bank a copy of each insurance policy, or, if
          permitted by the Bank, a certificate of insurance listing an
          insurance in force. 


          9.21 ADDITIONAL NEGATIVE COVENANTS.  Not to, without the Bank's
          written consent 

          (a)  engage in any business activities substantially different
               from the Borrower's present business. 

          (b)  liquidate or dissolve the Borrower's business. 

          (c)  enter into any consolidation, merger, pool, joint venture,
          syndicate, or other combination.

          (d)  lease, or dispose of all or a substantial part of the
               Borrower's business or the Borrower's assets. 

          (e)  acquire or purchase a business or its assets.

          (f)  sell or otherwise dispose of any assets for less than fair
               market value, or enter into any sale and leaseback agreement
               covering any of its fixed or capital assets. (g) voluntarily
               suspend its business for more than 5 consecutive days in any
               30 day period. 


          9.22 ERISA PLANS.  To give prompt written notice to the Bank of: 

          (a)  The occurrence of any reportable event under Section 4043(b)
               of ERISA for which the PBGC requires 30 day notice. 

          (b)  Any action by the Borrower to terminate or withdraw from a
               Plan or the filing of any notice of intent to terminate
               under Section 4041 of ERISA. 

          (c)  Any notice of noncompliance made with respect to a Plan
               under Section 4041 (b) of ERISA.
          (d)  The commencement of any proceeding with respect to a Plan
               under Section 4042 of ERISA. 


          10.  HAZARDOUS WASTE INDEMNIFICATION

          The Borrower, will indemnify and hold harmless the Bank from any
          loss or liability directly or indirectly arising out of the use,
          generation, manufacture, production, storage, release, threatened
          release, discharge, disposal or presence of a hazardous
          substance. This indemnity will apply whether the hazardous
          substance is on, under or about the Borrower's property or
          operations or property leased to the Borrower. The indemnity
          includes but is not limited to attorneys' fees (including the
          reasonable estimate of the allocated cost of in-house counsel and
          staff). The indemnity extends to the Bank, its parent,
          subsidiaries and all of their directors, officers, employees,
          agents, successors, attorneys and assigns. For these purposes,
          the term "hazardous substances" means any substance which is or
          becomes designated as "hazardous" or "toxic" under any federal,
          state or local law. This indemnity will survive repayment of the
          Borrower's obligations to the Bank. 


          11.  DEFAULT

          If any of the following events occur, the Bank may do one or more
          of the following: declare the Borrower in default, stop making
          any additional credit available to the Borrower, and require the
          Borrower to repay its entire debt immediately and without prior
          notice. If an event of default occurs under the paragraph
          entitled "Bankruptcy," below, with respect to the Borrower, then
          the entire debt outstanding under this Agreement will
          automatically be due immediately. 


          11.1 FAILURE TO PAY.  The Borrower fails to make a payment under
          this Agreement when due. 


          11.2 LIEN PRIORITY.  The Bank fails to have an enforceable first
          lien (except for any prior liens to which the Bank has consented
          in writing) on or security interest in any property given as
          security for this loan. 


          11.3 FALSE INFORMATION.  The Borrower has given the Bank false or
          misleading information or representations. 


          11.4 BANKRUPTCY.  The Borrower (or any guarantor) files a
          bankruptcy petition, a bankruptcy petition is filed against the
          Borrower (or any guarantor), or the Borrower (or any guarantor)
          makes a general assignment for the benefit of creditors. 

          11.5 RECEIVERS.  A receiver or similar official is appointed for
          the Borrower's (or any guarantor's) business, or the business is
          terminated. 


          11.6 LAWSUITS.  Any lawsuit or lawsuits are filed on behalf of
          one or more trade creditors against the Borrower in an aggregate
          amount of Two Hundred Fifty Thousand Dollars (S250,000) or more
          in excess of any insurance coverage. 


          11.7 JUDGMENTS.  Any judgments or arbitration awards are entered
          against the Borrower (or any guarantor), or the Borrower (or any
          guarantor) enters into any settlement agreements with respect to
          any litigation or arbitration, in an aggregate amount of Two
          Hundred Fifty Thousand Dollars (S250,000) or more in excess of
          any insurance coverage. 


          11.8 GOVERNMENT ACTION.  Any government authority takes action
          that the Bank believes materially adversely affects the
          Borrower's (or any guarantor's) financial condition or ability to
          repay. 


          11.9 MATERIAL ADVERSE CHANGE.  A material adverse change occurs
          in the Borrower's (or any guarantor's) financial condition,
          properties or prospects, or ability to repay the loan. 


          11.10      CROSS-DEFAULT.  Any default occurs under any agreement
          in connection with any credit the Borrower (or any guarantor) has
          obtained from anyone else or which the Borrower (or any
          guarantor) has guaranteed. 


          11.11      DEFAULT UNDER RELATED DOCUMENTS.  Any guaranty,
          subordination agreement, security agreement or other document
          required by this Agreement is violated or no longer in effect. 


          11.12      OTHER BANK AGREEMENTS.  The Borrower (or any
          guarantor) fails to meet the conditions of, or fails to perform
          any obligation under any other agreement the Borrower (or any
          guarantor) has with the Bank or any affiliate of the Bank. 


          11.13      ERISA PLANS. The occurrence of any one or more of the
          following events with respect to the Borrower, provided such
          event or events could reasonably be expected, in the judgment of
          the Bank, to subject the Borrower to any tax, penalty or
          liability (or any combination of the foregoing) which, in the
          aggregate, could have a material adverse effect on the financial
          condition of the Borrower with respect to a Plan: 

          (a)  A reportable event shall occur with respect to a Plan which
               is, in the reasonable judgment of the Bank likely to result
               in the termination of such Plan for purposes of Title IV of
               ERISA. 

          (b)  Any Plan termination (or commencement of proceedings to
               terminate a Plan) or the Borrower's full or partial
               withdrawal from a Plan. 


          11.14      OTHER BREACH UNDER AGREEMENT.  The Borrower fails to
          meet the conditions of, or fails to perform any obligation under,
          any term of this Agreement not specifically referred to in this
          Article. 


          12.  ENFORCING THIS AGREEMENT; MISCELLANEOUS

          12.1 GAAP.  Except as otherwise stated in this Agreement, all
          financial information provided to the Bank and all financial
          covenants will be made under generally accepted accounting
          principles, consistently applied. 


          12.2 CALIFORNIA LAW.  This Agreement is governed by California
          law. 


          12.3 SUCCESSORS AND ASSIGNS.  This Agreement is binding on the
          Borrowers and the Bank's successors and assignees. The Borrower
          agrees that it may not assign this Agreement without the Bank's
          prior consent. The Bank may sell participations in or assign this
          loan, and may exchange financial information about the Borrower
          with actual or potential participants or assignees. If a
          participation is sold or the loan is assigned, the purchaser will
          have the right of set-off against the Borrower. 


          12.4 ARBITRATION.

          (a)  This paragraph concerns the resolution of any controversies
               or claims between the Borrower and the Bank, including but
               not limited to those that arise from: 

               (i)   This Agreement (including any renewals, extensions or
                     modifications of this Agreement); 

               (ii)  Any document, agreement or procedure related to or
                     delivered in connection with this Agreement; 

               (iii) Any violation of this Agreement; or 

               (iv)  Any claims for damages resulting from any business
                     conducted between the Borrower and the Bank, including
                     claims for injury to persons, property or business
                     interests (torts). 

          (b)  At the request of the Borrower or the Bank, any such
               controversies or claims will be settled by arbitration in
               accordance with the United States Arbitration Act. The
               United States Arbitration Act-will apply even though this
               Agreement provides that it is governed by California law. 

          (c)  Arbitration proceedings will be administered by the American
               Arbitration Association and will be subject to its
               commercial rules of arbitration. 

          (d)  For purposes of the application of the statute of
               limitations, the filing of an arbitration pursuant to this
               paragraph is the equivalent of the filing of a lawsuit, and
               any claim or controversy which may be arbitrated under this
               paragraph is subject to any applicable statute of
               limitations. The arbitrators will have the authority to
               decide whether any such claim or controversy is barred by
               the statute of limitations and, if so, to dismiss the
               arbitration on that basis. 

          (e)  If there is a dispute as to whether an issue is arbitrable,
               the arbitrators will have the authority to resolve any such
               dispute. 

          (f)  The decision that results from an arbitration proceeding may
               be submitted to any authorized court of law to be confirmed
               and enforced. 

          (g)  The procedure described above will not apply if the
               controversy or claim, at the time of the proposed submission
               to arbitration, arises from or relates to an obligation to
               the Bank secured by real property located in California. In
               this case, both the Borrower and the Bank must consent to
               submission of the claim or controversy to arbitration. If
               both parties do not consent to arbitration, the controversy
               or claim will be settled as follows: 

               (i)   The Borrower and the Bank will designate a referee (or
                     a panel of referees) selected under the auspices of
                     the American Arbitration Association in the same
                     manner as arbitrators are selected in
                     Association-sponsored proceedings; 

               (ii)  The designated referee (or the panel of referees) will
                     be appointed by a court as provided in California Code
                     of Civil Procedure Section 638 and the following
                     related sections; 

               (iii) The referee (or the presiding referee of the panel)
                     will be an active attorney or a retired judge; and 

               (iv)  The award that results from the decision of the
                     referee (or the panel) will be entered as a judgment
                     in the court that appointed the referee, in accordance
                     with the provisions of California Code of Civil
                     Procedure Sections 644 and 645. 

          (h)  This provision does not limit the right of the Borrower or
          the Bank to:

               (i)   exercise self-help remedies such as setoff;

               (ii)  foreclose against or sell any real or personal
                     property collateral; or

               (iii) act in a court of law, before, during or after the
                     arbitration proceeding to obtain:

                     (A) an interim remedy; and/or

                     (B) additional or supplementary remedies.

          (i)  The pursuit of or a successful action for interim,
               additional or supplementary remedies, or the filing of a
               court action, does not constitute a waiver of the right of
               the Borrower or the Bank, including the suing party, to
               submit the controversy or claim to arbitration if the other
               party contests the lawsuit. However, if the controversy or
               claim arises from or relates to an obligation to the Bank
               which is secured by real property located in California at
               the time of the proposed submission to arbitration, this
               right is limited according to the provision above requiring
               the consent of both the Borrower and the Bank to seek
               resolution through arbitration. 

          (j)  If the Bank forecloses against any real property securing
               this Agreement, the Bank has the option to exercise the
               power of sale under the deed of trust or mortgage, or to
               proceed by judicial foreclosure. 


          12.5 SEVERABILITY; WAIVERS.  If any part of this Agreement is not
          enforceable, the rest of the Agreement may be enforced. The Bank
          retains all rights, even if it makes a loan after default. If the
          Bank waives a default, it may enforce a later default. Any
          consent or waiver under this Agreement must be in writing. 


          12.6 ADMINISTRATION COSTS.  The Borrower shall pay the Bank for
          all reasonable costs incurred by the Bank in connection with
          administering this Agreement. 

          12.7 ATTORNEYS' FEES.  The Borrower shall reimburse the Bank for
          any reasonable costs and attorneys' fees incurred by the Bank in
          connection with the enforcement or preservation of any rights or
          remedies under this Agreement and any other documents executed in
          connection with this Agreement, and including any amendment,
          waiver, "workout or restructuring under this Agreement. In the
          event of a lawsuit or arbitration proceeding, the prevailing
          party is entitled to recover costs and reasonable attorneys' fees
          incurred in connection with the lawsuit or arbitration
          proceeding, as determined by the court or arbitrator. As used in
          this paragraph, attorneys' fees" includes the allocated costs of
          in-house counsel. 


          12.8 ONE AGREEMENT.  This Agreement and any related security or
          other agreements required by this Agreement, collectively: 

          (a)  represent the sum of the understandings and agreements
               between the Bank and the Borrower concerning this credit;
               and 

          (b)  replace any prior oral or written agreements between the
               Bank and the Borrower concerning this credit; and 

          (c)  are intended by the Bank and the Borrower as the final,
               complete and exclusive statement of the terms agreed to by
               them. 

          In the event of any conflict between this Agreement and any other
          agreements required by this Agreement, this Agreement will
          prevail. 

     <PAGE>


          12.9 NOTICES.  Notices required under this Agreement shall be
          personally delivered or sent by first class mail, postage
          prepaid, to the addresses on the signature page of this
          Agreement, or to such other addresses as the Bank and the
          Borrower may specify from time to time in writing. 


          12.10      HEADINGS.  Article and paragraph headings are for
          reference only and shall not affect the interpretation or meaning
          of any provisions of this Agreement. 


          12.11      COUNTERPARTS.  This Agreement may be executed in as
          many counterparts as necessary or convenient, and by the
          different parties on separate counterparts each of which, when so
          executed, shall be deemed an original but all such counterparts
          shall constitute but one and the same agreement. 


          12.12      PRIOR AGREEMENT SUPERSEDED.  This Agreement supersedes
          the Business Loan Agreement entered into as of December 21, 1994,
          between the Bank and the Borrower, and any credit outstanding
          thereunder shall be deemed to be outstanding under this
          Agreement.

          This Agreement is executed as of the date stated at the top of
          the first page.



          Bank of America
          National Trust and Savings          Separation &
          Association                         Recovery Systems, Inc.



          X   /s/ L.A. Perfetto              X  /s/ Joseph De Franco
           -------------------------------    -----------------------------
          By:     L.A. Perfetto              By:     Joseph De Franco
          Title:  Vice President             Title:  President



          Address where notices to the       Address where notices to the
          Bank are to be sent:               Borrower are to be sent:


          North Orange County RCBO #1456
          300 South Harbor Boulevard         1762 McGaw Avenue
          Anaheim, CA  92805                 Irvine, CA 92714-4962