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                                                                    EXHIBIT 10.7

                                    EXHIBIT A
                             ANTIDILUTION AGREEMENT

        This Antidilution Agreement is entered into as of January 5, 2001 by and
between Imperial Bank ("Purchaser") and MHL DEVELOPMENT COMPANY ("the Company").

        RECITALS

        A.      Concurrently with the execution of this Antidilution Agreement,
the Purchaser is purchasing from the Company a Warrant to Purchase Stock (the
"Warrant") pursuant to which Purchaser has the right to acquire from the Company
the Shares (as defined in the Warrant).

        B.      By this Antidilution Agreement, the Purchaser and the Company
desire to set forth the adjustment in the number of Shares issuable upon
exercise of the Warrant as a result of a Diluting Issuance (as defined below).

        C.      Capitalized terms used herein shall have the same meaning as set
forth in the Warrant.

        NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:

        1.      Definitions. As used in this Antidilution Agreement, the
following terms have the following respective meanings:

                (a)     "Option" means any right, option or warrant to subscribe
for, purchase or otherwise acquire common stock or Convertible Securities.

                (b)     "Convertible Securities" means any evidences of
indebtedness, shares of stock or other securities directly or indirectly
convertible into or exchangeable for common stock.

                (c)     "Issue" means to grant, issue, sell, assume or fix a
record date for determining persons entitled to receive any security (including
Options), whichever of the foregoing is the first to occur.

                (d)     "Additional Common Shares" means all common stock
(including reissued shares) Issued (or deemed to be issued pursuant to Section
2) after the date of the Warrant. Additional Common Shares does not include,
however, any securities deemed outstanding pursuant to Section 3.3; common stock
Issued in a transaction described in Sections 2.1 and 2.2 of the Warrant; any
common stock Issued upon conversion of preferred stock outstanding on the date
of the Warrant; the Shares; or common stock Issued as incentive


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or in a nonfinancing transaction to employees, officers, directors or
consultants to the Company.

        2.      Deemed Issuance of Additional Common Shares. The shares of
common stock ultimately Issuable upon exercise of an Option (including the
shares of common stock ultimately Issuable upon conversion or exercise of a
Convertible Security Issuable pursuant to an Option) are deemed to be Issued
when the Option is Issued. The shares of common stock ultimately Issuable upon
conversion or exercise of a Convertible Security (other than a Convertible
Security Issued pursuant to an Option) shall be deemed Issued upon Issuance of
the Convertible Security. The maximum amount of common stock Issuable is
determined without regard to any future adjustments permitted under the
instrument creating the Options or Convertible Securities.

        3.      Adjustment of Warrant Price for Diluting Issuances.

                3.1     Weighted Average Adjustment. If the Company issues
Additional Common Shares after the date of the Warrant and the consideration per
Additional Common Share (determined pursuant to Section 9) is less than the
Warrant Price in effect immediately before such Issue (a "Diluting Issuance"),
the Warrant Price in effect immediately before such Issue shall be reduced,
concurrently with such Issue, to a price (calculated to the nearest hundredth of
a cent) determined by multiplying the Warrant Price by a fraction:

                        (a)     the numerator of which is the amount of common
stock outstanding immediately before such Issue plus the amount of common stock
that the aggregate consideration received by Company for the Additional Common
Shares would purchase at the Warrant Price in effect immediately before such
Issue, and

                        (b)     the denominator of which is the amount of common
stock outstanding immediately before such Issue plus the number of such
Additional Shares.

                3.2     Adjustment of Number of Shares. Upon each adjustment of
the Warrant Price, the number of Shares Issuable upon exercise of the Warrant
shall be increased to equal the quotient obtained by dividing (a) the product
resulting from multiplying (i) the number of Shares Issuable upon exercise of
the Warrant and (ii) the Warrant Price, in each case as in effect immediately
before such adjustment, by (b) the adjusted Warrant Price.

                3.3     Securities Deemed Outstanding. For the purpose of this
Section 3, all securities Issuable upon exercise of any outstanding Convertible
Securities or Options, Warrants, or other rights to acquire securities of the
Company shall be deemed to be outstanding.

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        4.      No Adjustment for Issuances Following Deemed Issuances. No
adjustment to the Warrant Price shall be made upon the exercise of Options or
conversion of Convertible Securities.

        5.      Adjustable Following Changes in Terms of Options or Convertible
Securities. If the consideration payable to, or the amount of common stock
Issuable by, the Company increases or decreases, respectively, pursuant to the
terms of any outstanding Options or Convertible Securities, the Warrant Price
shall be recomputed to reflect such increase or decrease. The recomputation
shall be made as of the time of the Issuance of the Options or Convertible
Securities. Any changes in the Warrant Price that occurred after such Issuance
because other Additional Common Shares were Issued or deemed Issued shall also
be recomputed.

        6.      Recomputation Upon Expiration of Options or Convertible
Securities. The Warrant Price computed upon the original Issue of any Options or
Convertible Securities, and any subsequent adjustments based thereon, shall be
recomputed when any Options or rights of conversion under Convertible Securities
expire without having been exercised. In the case of Convertible Securities or
Options for common stock, the Warrant Price shall be recomputed as if the only
Additional Common Shares Issued were the shares of common stock actually Issued
upon the exercise of such securities, if any, and as if the only consideration
received therefor was the consideration actually received upon the Issue,
exercise or conversion of the Options or Convertible Securities. In the case of
Options for Convertible Securities, the Warrant Price shall be recomputed as if
the only Convertible Securities Issued were the Convertible Securities actually
Issued upon the exercise thereof, if any, and as if the only consideration
received therefor was the consideration actually received by the Company
(determined pursuant to Section 9), if any, upon the Issue of the Options for
the Convertible Securities.

        7.      Limit on Readjustments. No readjustment of the Warrant Price
pursuant to Sections 5 or 6 shall increase the Warrant Price more than the
amount of any decrease made in respect of the Issue of any Options or
Convertible Securities.

        8.      30 Day Options. In the case of any Options that expire by their
terms not more than 30 days after the date of Issue thereof, no adjustment of
the Warrant Price shall be made until the expiration or exercise of all such
Options.

        9.      Computation of Consideration. The consideration received by the
Company for the Issue of any Additional Common Shares shall be computed as
follows:

                (a)     Cash shall be valued at the amount of cash received by
the Corporation, excluding amounts paid or payable for accrued interest or
accrued dividends.

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                (b)     Property. Property, other than cash, shall be computed
at the fair market value thereof at the time of the Issue as determined in good
faith by the Board of Directors of the Company.

                (c)     Mixed Consideration. The consideration for Additional
Common Shares Issued together with other property of the Company for
consideration that covers both shall be determined in good faith by the Board of
Directors.

                (d)     Options and Convertible Securities. The consideration
per Additional Common Share for Options and Convertible Securities shall be
determined by dividing:

                        (i)     the total amount, if any, received or receivable
by the Company for the Issue of the Options or Convertible Securities, plus the
minimum amount of additional consideration (as set forth in the investments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to the Company upon
exercise of the Options or conversion of the Convertible Securities, by

                        (ii)    the maximum amount of common stock (as set forth
in the instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such number) ultimately Issuable upon the
exercise of such Options or the conversion of such Convertible Securities.

        10.     General.

                10.1    Governing Law. This Antidilution Agreement shall be
governed in all respects by the laws of the State of Oregon as such laws are
applied to agreements between Oregon residents entered into and to be performed
entirely within Oregon.

                10.2    Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.

                10.3    Entire Agreement. Except as set forth below, this
Antidilution Agreement and the other documents delivered pursuant thereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.

                10.4    Notices, etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be mailed by first
class mail, postage prepaid, certified or registered mail, return receipt
requested, addressed (a) if to Purchaser at Purchaser's address as set forth
below, or at such other address as Purchaser shall have furnished to the Company
in writing, or (b) if to the Company, at the Company's address set

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forth below, or at such other address as the Company shall have furnished to the
Purchaser in writing.

                10.5    Severability. In case any provision of this Antidilution
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Antidilution Agreement shall
not in any way be affected or impaired thereby.

                10.6    Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Antidilution Agreement.

                10.7    Counterparts. This Antidilution Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.

PURCHASER                           ISSUER

IMPERIAL BANK                       MHL DEVELOPMENT COMPANY


By:/s/ MIKE PARROTT                 By:/s/ RICHARD G. SASS
   ----------------------------        ----------------------------

Name:  Mike Parrott                 Name: Richard G. Sass

Title:  Venture Banking Officer     Title:  Chief Executive Officer

Address:                            Address:  16125 SW 72nd Avenue
        -----------------------               Portland, OR 97224

                                    By:/s/ JANE K.CONNER
                                       -----------------

                                    Name: Jane K. Conner

                                    Title: Chief Financial Officer

                                    Address: 16125 SW 72nd Avenue
                                             Portland, OR 97224

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