EXHIBIT 10.29


                  LOAN AND SECURITY AGREEMENT

                           between

          INTEGRATED PACKAGING ASSEMBLY CORPORATION

                             and

              SILICON VALLEY FINANCIAL SERVICES,

              a Division of Silicon Valley Bank




                      TABLE OF CONTENTS

1.   DEFINITIONS AND CONSTRUCTION                                  1

     1.1.   Definitions                                            1
     1.2.   Accounting and Other Terms                             7
     1.3.   No Presumption Against Any Party                       7

2.   LOAN AND TERMS OF PAYMENT                                     8
     2.1.   Credit Extensions                                      8
     2.2.   Overadvances                                           9
     2.3.   Default Rates, Payments, and Calculations              9
     2.4.   Crediting Payments                                     9
     2.5.   Fees                                                   9
     2.6.   Additional Costs                                      10
     2.7.   Term                                                  10

3.   CONDITIONS OF LOANS                                          10
     3.1.   Conditions Precedent to Initial Credit Extension      10
     3.2.   Conditions Precedent to all Loans Credit Extensions   11

4.   CREATION OF SECURITY INTEREST                                11
     4.1.   Grant of Security Interest                            11
     4.2.   Delivery of Additional Documentation Required         11
     4.3.   Right to Inspect                                      12

5.   REPRESENTATIONS AND WARRANTIES                               12
     5.1.   Due Organization and Qualification                    12
     5.2.   Due Authorization; No Conflict                        12
     5.3.   No Prior Encumbrances                                 12
     5.4.   Intellectual Property                                 12
     5.5.   Name; Location of Chief Executive Office              13
     5.6.   Financial Statements                                  13
     5.7.   Regulatory Compliance                                 13
     5.8.   Environmental Condition                               13
     5.9.   Taxes                                                 13
     5.10.  Subsidiaries                                          13
     5.11.  Government Consents                                   14
     5.12.  Full Disclosure                                       14

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6.   AFFIRMATIVE COVENANTS                                        14
     6.1.   Good Standing                                         14
     6.2.   Government Compliance                                 14
     6.3.   Financial Statements, Reports, Certificates           14
     6.4.   Taxes                                                 15
     6.5.   Insurance                                             15
     6.6.   Principal Depository                                  15
     6.7.   Registration of Intellectual Property Rights          15
     6.8.   Further Assurances                                    16

7.   NEGATIVE COVENANTS                                           16
     7.1.   Dispositions                                          16
     7.2.   Changes in Business, Ownership, or Management,
            Business Locations                                    16
     7.3.   Mergers or Acquisitions                               16
     7.4.   Indebtedness                                          17
     7.5.   Distributions                                         17
     7.6.   Investments                                           17
     7.7.   Transactions with Affiliates                          17
     7.8.   Intellectual Property Agreements                      17
     7.9.   Subordinated Debt                                     17
     7.10.  Compliance                                            17

8.   EVENTS OF DEFAULT                                            17
     8.1.   Payment Default                                       18
     8.2.   Covenant Default                                      18
     8.3.   Insolvency                                            18
     8.4.   Misrepresentations                                    18
     8.5.   Guaranty                                              18

9.   BANK'S RIGHTS AND REMEDIES                                   18
     9.1.   Rights and Remedies                                   18
     9.2.   Power of Attorney                                     20
     9.3.   Accounts Collection                                   20
     9.4.   Bank Expenses                                         20
     9.5.   Bank's Liability for Collateral                       21
     9.6.   Remedies Cumulative                                   21
     9.7.   Demand; Protest                                       21

10.  NOTICES                                                      21

11.  CHOICE OF LAW AND VENUE; WAIVER OF JURY TRIAL                22

12.  GENERAL PROVISIONS                                           22
     12.1.  Successors and Assigns                                22
     12.2.  Indemnification                                       22
     12.3.  Time of Essence                                       22
     12.4.  Severability of Provisions                            22
     12.5.  Amendments in Writing, Integration                    22
     12.6.  Counterparts                                          23
     12.7.  Survival                                              23
     12.8.  Confidentiality                                       23

                                     Page 74

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This LOAN AND SECURITY AGREEMENT, dated as of December ___, 1998 is between 
SILICON VALLEY FINANCIAL SERVICES, a division of Silicon Valley Bank 
("Bank") and INTEGRATED PACKAGING ASSEMBLY CORPORATION, a Delaware 
corporation ("Borrower").


The parties agree as follows:

1.   DEFINITIONS AND CONSTRUCTION

     1.1.   Definitions.  As used in this Agreement, the following terms 
shall have the following definitions:

            "Accounts" means all presently existing and hereafter arising 
accounts, contract rights, and all other forms of obligations owing to 
Borrower arising out of the sale or lease of goods (including, without 
limitation, the licensing of software and other technology) or the rendering 
of services by Borrower, whether or not earned by performance, and any and 
all credit insurance, guaranties, and other security therefor, as well as 
all merchandise returned to or reclaimed by Borrower and Borrower's Books 
relating to any of the foregoing.

            "Affiliate" means, with respect to any Person, any Person that 
owns or controls directly or indirectly such Person, any Person that 
controls or is controlled by or is under common control with such Person, 
and each of such Person's senior executive officers, directors, partners 
and, for any Person that is a limited liability company, such Persons, 
managers and members.

            "Bank Expenses" means all reasonable costs or expenses 
(including reasonable attorneys' fees and expenses) incurred in connection 
with the preparation, negotiation, administration, and enforcement of the 
Loan Documents; and Bank's reasonable attorneys' fees and expenses incurred 
in amending, enforcing or defending the Loan Documents, (including fees and 
expenses of appeal or review, or those incurred in any Insolvency 
Proceeding) whether or not suit is brought.

            "Borrower's Books" means all of Borrower's books and records 
including, without limitation:  ledgers; records concerning Borrower's 
assets or liabilities, the Collateral, business operations or financial 
condition; and all computer programs, or tape files, and the equipment, 
containing such information.

            "Business Day" means any day that is not a Saturday, Sunday, or 
other day on which banks in the State of California are authorized or 
required to close.

            "Closing Date" means the date of this Agreement.

            "Collateral" means the property described on Exhibit A attached 
hereto.

                                     Page 1

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            "Contingent Obligation" means, as applied to any Person, any 
direct or indirect liability, contingent or otherwise, of that Person with 
respect to (i) any indebtedness, lease, dividend, letter of credit or other 
obligation of another, including, without limitation, any such obligation 
directly or indirectly guaranteed, endorsed, co-made or discounted or sold 
with recourse by that Person, or in respect of which that Person is 
otherwise directly or indirectly liable; (ii) any obligations with respect 
to undrawn letters of credit issued for the account of that Person; and 
(iii) all obligations arising under any interest rate, currency or commodity 
swap agreement, interest rate cap agreement, interest rate collar agreement, 
or other agreement or arrangement designated to protect a Person against 
fluctuation in interest rates, currency exchange rates or commodity prices; 
provided that the term "Contingent Obligation" shall not include 
endorsements for collection or deposit in the ordinary course of business.  
The amount of any Contingent Obligation shall be deemed to be an amount 
equal to the stated or determined amount of the primary obligation in 
respect of which such Contingent Obligation is made or, if not stated or 
determinable, the maximum reasonably anticipated liability in respect 
thereof as determined by such Person in good faith; provided that such 
amount shall not in any event exceed the maximum amount of the obligations 
under the guarantee or other support arrangement.

            "Copyrights" means any and all copyright rights, copyright 
applications, copyright registrations and like protections in each work or 
authorship and derivative work thereof, whether published or unpublished and 
whether or not the same also constitutes a trade secret, now or hereafter 
existing, created, acquired or held.
	
            "Credit Extension" means each Revolving Loan, or any other 
extension of credit by Bank for the benefit of Borrower hereunder.

            "Current Assets" means, as of any applicable date, all amounts 
that should, in accordance with GAAP, be included as current assets on the 
consolidated balance sheet of Borrower and its Subsidiaries as at such date.

            "Current Liabilities" means, as of any applicable date, all 
amounts that should, in accordance with GAAP, be included as current 
liabilities on the consolidated balance sheet of Borrower and its 
Subsidiaries, as at such date, plus, to the extent not already included 
therein, all outstanding Credit Extensions made under this Agreement, 
including all Indebtedness that is payable upon demand or within one year 
from the date of determination thereof unless such Indebtedness is renewable 
or extendable at the option of Borrower or any Subsidiary to a date more 
than one year from the date of determination, but excluding Subordinated 
Debt.

            "Default" means any condition or event which constitutes an 
Event of Default or which with the giving of notice or lapse of time or both 
would, unless cured or waived, become an Event of Default.

            "Equipment" means all present and future machinery, equipment, 
tenant improvements, furniture, fixtures, vehicles, tools, parts and 
attachments in which Borrower has any interest.

                                     Page 2

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            "ERISA" means the Employment Retirement Income Security Act of 
1974, as amended, and the regulations thereunder.

            "Event of Default" has the meaning set forth in Section 8.

            "GAAP" means generally accepted accounting principles as in 
effect in the United States from time to time.

            "Guarantor" means any present or future guarantor of the 
Obligations, including, without limitation, CONFIDENTIAL.

            "Indebtedness" means (a) all indebtedness for borrowed money or 
the deferred purchase price of property or services, including without 
limitation reimbursement and other obligations with respect to surety bonds 
and letters of credit, (b) all obligations evidenced by notes, bonds, 
debentures or similar instruments, (c) all capital lease obligations and 
(d) all Contingent Obligations.

            "Insolvency Proceeding" means any proceeding commenced by or 
against any person or entity under any provision of the United States 
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency 
law, including assignments for the benefit of creditors, formal or informal 
moratoria, compositions, extension generally with its creditors, or 
proceedings seeking reorganization, arrangement, or other relief.

            "Intellectual Property Collateral" means

            (a)  Copyrights, Trademarks, Patents, and Mask Works;

            (b)  Any and all trade secrets, and any and all intellectual 
property rights in computer software and computer software products now or 
hereafter existing, created, acquired or held;

            (c)  Any and all design rights which may be available to 
Borrower now or hereafter existing, created, acquired or held;

            (d)  Any and all claims for damages by way of past, present and 
future infringement of any of the rights included above, with the right, but 
not the obligation, to sue for and collect such damages for said use or 
infringement of the intellectual property rights identified above;

            (e)  All licenses or other rights to use any of the Copyrights, 
Patents, Trademarks, or Mask Works, and all license fees and royalties 
arising from such use to the extent permitted by such license or rights;

            (f)  All amendments, renewals and extensions of any of the 
Copyrights, Trademarks, Patents, or Mask Works; and

            (g)  All proceeds and products of the foregoing, including 
without limitation all payments under insurance or any indemnity or warranty 
payable in respect of any of the foregoing.

                                     Page 3

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            "Inventory" means all present and future inventory in which 
Borrower has any interest, including merchandise, raw materials, parts, 
supplies, packing and shipping materials, work in process and finished 
products intended for sale or lease or to be furnished under a contract of 
service, of every kind and description now or at any time hereafter owned by 
or in the custody or possession, actual or constructive, of Borrower, 
including such inventory as is temporarily out of its custody or possession 
or in transit and including any returns upon any accounts or other proceeds, 
including insurance proceeds, resulting from the sale or disposition of any 
of the foregoing and any documents of title representing any of the above.

            "Investment" means any beneficial ownership of (including stock, 
partnership interest or other securities) any Person, or any loan, advance 
or capital contribution to any Person.

            "IRC" means the Internal Revenue Code of 1986, as amended, and 
the regulations thereunder.

            "Lien" means any mortgage, lien, deed of trust, charge, pledge, 
security interest or other encumbrance (or any agreement to grant any of the 
foregoing, whether or not contingent on the happening of any future event).

            "Loan Documents" means, collectively, this Agreement, any note 
or notes executed by Borrower, and any other present or future agreement 
entered into between Borrower and/or for the benefit of Bank in connection 
with this Agreement, all as amended, extended or restated from time to time.

            "Mask Works" means all mask work or similar rights available for 
the protection of semiconductor chips, now owned or hereafter acquired;

            "Material Adverse Effect" means a material adverse effect on (i) 
the business operations or condition (financial or otherwise) of Borrower 
and its Subsidiaries taken as a whole, (ii) the ability of Borrower to repay 
the Obligations or otherwise perform its obligations under the Loan 
Documents, (iii) the value or priority of Bank's security interests in the 
Collateral.

            "Negotiable Collateral" means all of Borrower's present and 
future letters of credit of which it is a beneficiary, notes, drafts, 
instruments, securities, documents of title, and chattel paper.

            "Obligations" means all debt, principal, interest, Bank Expenses 
and other amounts owed to Bank by Borrower pursuant to this Agreement, 
whether absolute or contingent, due or to become due, now existing or 
hereafter arising, including any interest that accrues after the 
commencement of an Insolvency Proceeding and including any debt, liability, 
or obligation owing from Borrower to others that Bank may have obtained by 
assignment or otherwise.

            "Patents" means all patents, patent applications and like 
protections including without limitation improvements, divisions, 
continuations, renewals, reissues, extensions and continuations-in-part of 
the same.
                                     Page 4

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            "Payment Date" means the last calendar day of each month.

            "Permitted Indebtedness" means:

            (a)  Indebtedness of Borrower in favor of Bank arising under 
this Agreement or any other Loan Document;

            (b)  Indebtedness existing on the Closing Date and disclosed in 
the Schedule;

            (c)  Subordinated Debt; 

		(d)  Indebtedness to trade creditors incurred in the ordinary 
course of business; 
                  and

            (e)  Indebtedness secured by Permitted Liens.

		"Permitted Investment" means:

            (a)  Investments existing on the Closing Date disclosed in the 
Schedule; and

            (b)  (i)  marketable direct obligations issued or 
unconditionally guaranteed by the United States of America or any agency or 
any State thereof maturing within one (1) year from the date of acquisition 
thereof, (ii) commercial paper maturing no more than one (1) year from the 
date of creation thereof and currently having the highest rating obtainable 
from either Standard & Poor's Corporation or Moody's Investors Service, 
Inc., and (iii) certificates of deposit maturing no more than one (1) year 
from the date of investment therein issued by Bank.

            "Permitted Liens" means the following:

            (a)  Any Liens existing on the Closing Date or arising under 
this Agreement or the other Loan Documents;

            (b)  Liens for taxes, fees, assessments or other governmental 
charges or levies, either not delinquent or being contested in good faith by 
appropriate proceedings and as to which adequate reserves are maintained on 
Borrower's Books in accordance with GAAP, provided the same have no priority 
over any of Bank's security interests;

            (c)  Liens (i) upon or in any Equipment acquired or held by 
Borrower or any of its Subsidiaries to secure the purchase price of such 
Equipment or indebtedness incurred solely for the purpose of financing the 
acquisition of such Equipment, or (ii) existing on such equipment at the 
time of its acquisition, provided that the Lien is confined solely to the 
property so acquired and improvements thereon, and the proceeds of such 
equipment;

            (d)  Leases or subleases and licenses or sublicenses granted to 
others in the ordinary course of Borrower's business not interfering in any 
material respect with the business of Borrower and its Subsidiaries taken as 
a whole, and any interest or title of a lessor, licensor or under any lease 
or license provided that such leases, subleases, licenses and sublicenses do 
not prohibit the grant of the security interest granted hereunder; and
                                     Page 5

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            (e)  Liens incurred in connection with the extension, renewal or 
refinancing of the indebtedness secured by Liens of the type described in 
clauses (a) through (c) above, provided that any extension, renewal or 
replacement Lien shall be limited to the property encumbered by the existing 
Lien and the principal amount of the indebtedness being extended, renewed or 
refinanced does not increase.

            "Person" means any individual, sole proprietorship, partnership, 
limited liability company, joint venture, trust, unincorporated 
organization, association, corporation, institution, public benefit 
corporation, firm, joint stock company, estate, entity or governmental 
agency.

            "Prime Rate" means the variable rate of interest, per annum, 
most recently announced by Bank, as its "prime rate," whether or not such 
announced rate is the lowest rate available from Bank.

            "Responsible Officer" means each of the Chief Executive Officer, 
the President, the Chief Financial Officer and the Controller of Borrower.

            "Revolving Commitment" means a credit extension of up to 
$6,950,000.00.

            "Revolving Loan" means a loan advance under the Revolving 
Commitment.

            "Revolving Maturity Date" means June 1, 1999.

            "Schedule" means the schedule of exceptions attached hereto, if 
any.

            "Subordinated Debt" means any debt incurred by Borrower that is 
subordinated to the debt owing by Borrower to Bank on terms acceptable to 
Bank (and identified as being such by Borrower and Bank).

            "Subsidiary" means with respect to any Person, corporation, 
partnership, company association, joint venture, or any other business 
entity of which more than 50% of the voting stock or other equity interests 
is owned or controlled, directly or indirectly, by such Person.

            "Total Liabilities" means as of any applicable date, any date as 
of which the amount thereof shall be determined, all obligations that 
should, in accordance with GAAP be classified as liabilities on the 
consolidated balance sheet of Borrower, including in any event all 
Indebtedness, but specifically excluding Subordinated Debt.

            "Trademarks" means any trademark and servicemark rights, whether 
registered or not, applications to register and registrations of the same 
and like protections, and the entire goodwill of the business of Borrower 
connected with and symbolized by such trademarks.

                                     Page 6

<PAGE>

            "UCC" means the California Uniform Commercial Code.

            "Year 2000 Problem" means the inability of computers, as well as 
embedded microchips in non-computing devices, to properly perform date-
sensitive functions with respect to certain dates prior to and after 
December 31, 1999.

     1.2.   Accounting and Other Terms.  All accounting terms not 
specifically defined herein shall be construed in accordance with GAAP and 
all calculations and determinations made hereunder shall be made in 
accordance with GAAP.  When used herein, the term "financial statements" 
shall include the notes and schedules thereto.  In the computation of 
periods of time from a specified date to a later specified date, the word 
"from" means "from and including" and the words "to" and "until" each mean 
"to but excluding."  Periods of days referred to in this Agreement shall be 
counted in calendar days unless otherwise stated.  References to the plural 
include the singular and to the singular include the plural, references to 
any gender include any other gender, the part includes the whole, the term 
"including" is not limiting, and the term "or" has, except where otherwise 
indicated, the inclusive meaning represented by the phrase "and/or."  The 
words "hereof," "herein," "hereby," "hereunder," and similar terms in this 
Agreement refer to this Agreement as a whole and not to any particular 
provision of this Agreement.  Article, section, subsection, clause, exhibit 
and schedule references are to this Agreement, unless otherwise specified.  
All of the exhibits and schedules attached hereto shall be deemed 
incorporated herein by reference.  All terms contained in this Agreement 
which are not otherwise specifically defined herein (including the term 
"good faith") shall have the meanings provided by the UCC to the extent the 
same are used or defined therein.

     1.3.   No Presumption Against Any Party.  Neither this Agreement nor 
any other Loan Document nor any uncertainty or ambiguity herein or therein 
shall be construed or resolved using any presumption against any party 
hereto or thereto, whether under any rule of construction or otherwise.  On 
the contrary, this Agreement and the other Loan Documents have been reviewed 
by each of the parties and their counsel and, in the case of any ambiguity 
or uncertainty, shall be construed and interpreted according to the ordinary 
meaning of the words used so as to fairly accomplish the purposes and 
intentions of all parties hereto.
                                     Page 7

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2.   LOAN AND TERMS OF PAYMENT

     2.1.   Credit Extensions.  Borrower promises to pay to the order of 
Bank, in lawful money of the United States of America, the aggregate unpaid 
principal amount of all Credit Extensions made by Bank to Borrower 
hereunder.  Borrower shall also pay interest on the unpaid principal amount 
of such Loans at rates in accordance with the terms hereof.

            2.1.1.   (a)  Subject to and upon the terms and conditions of 
this Agreement, Bank agrees to make Revolving Loans to Borrower in an 
aggregate outstanding amount not to exceed the Revolving Commitment, 
provided, however, that the aggregate amount of the Revolving Loans made in 
each of the hereafter described time periods shall not exceed the amount 
hereafter specified for such time period:  (i) $1,454,200.00 during the 
period from December 1, 1998 to December 31, 1999; (ii) $2,020,700.00 during 
the period from January 1, 1999 to January 31, 1999; (iii) $1,194,600.00 
during the period from February 1, 1999 to February 28, 1999; 
(iv) $1,314,500.00 during the period from March 1, 1999 to April 4, 1999; 
(v) $585,200.00 during the period from April 5, 1999 to May 2, 1999; and 
(vi) $603,900.00 during the period from May 3, 1999 to May 30, 1999.  
Subject to the terms and conditions of this Agreement, amounts borrowed 
pursuant to this Section 2.1 may be repaid and reborrowed at any time during 
the term of this Agreement.

                     (b)  Whenever Borrower desires a Revolving Loan, 
Borrower will notify Bank by facsimile transmission or telephone no later 
than 3:00 p.m. Pacific time, on the Business Day that such Revolving Loan is 
to be made, and Borrower shall simultaneously deliver a copy of each such 
notice to the Guarantor.  Each such notification shall be promptly confirmed 
by a Payment/Loan Form in substantially the form of Exhibit B hereto.  Bank 
is authorized to make Loans under this Agreement, based upon instructions 
received from a Responsible Officer or a designee of a Responsible Officer, 
or without instructions if in Bank's discretion such Loans are necessary to 
meet Obligations which have become due and remain unpaid.  Bank shall be 
entitled to rely on any telephonic notice given by a person who Bank 
reasonably believes to be a Responsible Officer or a designee thereof, and 
Borrower shall indemnify and hold Bank harmless for any damages or loss 
suffered by Bank as a result of such reliance.  Bank will credit the amount 
of Loans made under this Section 2.1 to Borrower's deposit account.

                     (c)   Interest Rate.  Except as set forth in Section 
2.3(b), the outstanding principal amount of the Revolving Loans shall bear 
interest, on the average daily balance thereof, at a per annum rate equal to 
the Prime Rate.

                     (d)   The Revolving Commitment shall terminate on the 
Revolving Maturity Date, at which time all Revolving Loans and accrued 
interest thereon shall be immediately due and payable.

                                     Page 8

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     2.2.   Overadvances.  If, at any time or for any reason, the amount of 
Obligations owed by Borrower to Bank pursuant to Section 2.1.1, of this 
Agreement is greater than the Revolving Commitment, Borrower shall 
immediately pay to Bank, in cash, the amount of such excess.

     2.3.   Default Rates, Payments, and Calculations.

                     (a)  Default Rate.  All Obligations shall bear 
interest, from and after the occurrence of an Event of Default, at a rate 
equal to five percentage points above the interest rate applicable 
immediately prior to the occurrence of the Event of Default.

                     (b)  Payments.  Interest hereunder shall be due and 
payable on each Payment Date.  Borrower hereby authorizes Bank to debit any 
accounts with Bank, including, without limitation, Account Number         
for payments of principal and interest due on the Obligations and any other 
amounts owing by Borrower to Bank.  Bank will notify Borrower of all debits 
which Bank has made against Borrower's accounts.  Any such debits against 
Borrower's accounts in no way shall be deemed a set-off.  Any interest not 
paid when due shall be compounded by becoming a part of the Obligations, and 
such interest shall thereafter accrue interest at the rate then applicable 
hereunder.

                     (c)  Computation.  In the event the Prime Rate is 
changed from time to time hereafter, the applicable rate of interest 
hereunder shall be increased or decreased effective as of 12:01 a.m. on the 
day the Prime Rate is changed, by an amount equal to such change in the 
Prime Rate.  All interest chargeable under the Loan Documents shall be 
computed on the basis of a 360-day year for the actual number of days 
elapsed.

     2.4.   Crediting Payments .  Prior to the occurrence of an Event of 
Default, Bank shall credit a wire transfer of funds, check or other item of 
payment to such deposit account or Obligation as Borrower specifies.  After 
the occurrence of an Event of Default, the receipt by Bank of any wire 
transfer of funds, check, or other item of payment, whether directed to 
Borrower's deposit account with Bank or to the Obligations or otherwise,  
shall be immediately applied to conditionally reduce Obligations, but shall 
not be considered a payment in respect of the Obligations unless such 
payment is of immediately available federal funds or unless and until such 
check or other item of payment is honored when presented for payment.  
Notwithstanding anything to the contrary contained herein, any wire transfer 
or payment received by Bank after 12:00 noon Pacific time shall be deemed to 
have been received by Bank as of the opening of business on the immediately 
following Business Day.  Whenever any payment to Bank under the Loan 
Documents would otherwise be due (except by reason of acceleration) on a 
date that is not a Business Day, such payment shall instead be due on the 
next Business Day, and additional fees or interest, as the case may be, 
shall accrue and be payable for the period of such extension.

     2.5.   Fees.  Borrower shall pay to Bank the following:

                     (a)  Due Diligence Fee.  A Due Diligence Fee equal to 
$ 1,000.00, which fee shall be due on the Closing Date and shall be fully 
earned and non-refundable (the prior receipt of which by Bank is hereby 
acknowledged by Bank); and
                                     Page 9

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                     (b)  Bank Expenses. Upon demand from Bank, including, 
without limitation, upon the date hereof, all Bank Expenses incurred through 
the date hereof, including reasonable attorneys' fees and expenses, and, 
after the date hereof, all Bank Expenses, including reasonable attorneys. 
fees and expenses, as and when they become due.

     2.6.   Additional Costs.  In case any law, regulation, treaty or 
official directive or the interpretation or application thereof by any court 
or any governmental authority charged with the administration thereof or 
the compliance with any guideline or request of any central bank or other 
governmental authority (whether or not having the force of law):

                     (a)  subjects Bank to any tax with respect to payments 
of principal or interest or any other amounts payable hereunder by Borrower 
or otherwise with respect to the transactions contemplated hereby (except 
for taxes on the overall net income of Bank imposed by the United States of 
America or any political subdivision thereof);

                     (b)  imposes, modifies or deems applicable any deposit 
insurance, reserve, special deposit or similar requirement against assets 
held by, or deposits in or for the account of, or loans by, Bank; or

                     (c)  imposes upon Bank any other condition with respect 
to its performance under this Agreement, and the result of any of the 
foregoing is to increase the cost to Bank, reduce the income receivable by 
Bank or impose any expense upon Bank with respect to any loans, Bank shall 
notify Borrower thereof.  Borrower agrees to pay to Bank the amount of such 
increase in cost, reduction in income or additional expense as and when such 
cost, reduction or expense is incurred or determined, upon presentation by 
Bank of a statement of the amount and setting forth Bank's calculation 
thereof, all in reasonable detail, which statement shall be deemed true and 
correct absent manifest error.

     2.7.   Term.  Except as otherwise set forth herein, this Agreement 
shall become effective on the Closing Date and, subject to Section 12.7, 
shall continue in full force and effect until the Loans and all interest 
thereon have been fully and finally paid.  Notwithstanding the foregoing, 
Bank shall have the right to terminate its obligation to make Loans under 
this Agreement immediately and without notice upon the occurrence and during 
the continuance of an Event of Default.

3.   CONDITIONS OF LOANS

     3.1.   Conditions Precedent to Initial Credit Extension.  The 
obligation of Bank to make the initial Credit Extension is subject to the 
condition precedent that Bank shall have received, in form and substance 
satisfactory to Bank, the following:

                    (a)  this Agreement;

                    (b)  a certificate of the Secretary of Borrower with 
respect to articles, bylaws, incumbency and resolutions authorizing the 
execution and delivery of this Agreement;

                    (c)  a guaranty by the Guarantor;

                    (d)  insurance certificate;

                    (e)  payment of the fees and Bank Expenses then due 
specified in Section 2.5 hereof; and

                    (f)  such other documents, and completion of such other 
matters, as Bank may reasonably deem necessary or appropriate.

                                     Page 10

<PAGE>

     3.2.   Conditions Precedent to all Loans Credit Extensions.  The 
obligation of Bank to make each Credit Extension, including the initial Loan 
Credit Extension, is further subject to the following conditions:

                    (a)  timely receipt by Bank of the Payment/Loan Form as 
provided in Section 2.1; and

                    (b)  the representations and warranties contained in 
Section 5 shall be true and correct in all material respects on and as of 
the date of such Payment/Loan Form and on the effective date of each Credit 
Extension as though made at and as of each such date, and no Default shall 
have occurred and be continuing, or would result from such Credit Extension.  
The making of each Credit Extension shall be deemed to be a representation 
and warranty by Borrower on the date of such Credit Extension as to the 
accuracy of the facts referred to in this Section 3.2(b).

4.   CREATION OF SECURITY INTEREST

     4.1.   Grant of Security Interest.  Borrower grants and pledges to Bank 
a continuing security interest in all presently existing and hereafter 
acquired or arising Collateral in order to secure prompt payment of any and 
all Obligations and in order to secure prompt performance by Borrower of 
each of its covenants and duties under the Loan Documents.  Except as set 
forth in the Schedule, such security interest constitutes a valid, first 
priority security interest in the presently existing Collateral, and will 
constitute a valid, first priority security interest in Collateral acquired 
after the date hereof.  Notwithstanding termination of this Agreement, 
Bank's Lien on the Collateral shall remain in effect for so long as any 
Obligations are outstanding. 

     4.2.   Delivery of Additional Documentation Required.  Borrower shall 
from time to time execute and deliver to Bank, at the request of Bank, all 
Negotiable Collateral, all financing statements and other documents that 
Bank may reasonably request, in form satisfactory to Bank, to perfect and 
continue perfected Bank's security interests in the Collateral and in order 
to fully consummate all of the transactions contemplated under the Loan 
Documents.

                                     Page 11

<PAGE>


     4.3.   Right to Inspect.  Bank (through any of its officers, employees, 
or agents) shall have the right, upon reasonable prior notice, from time to 
time during Borrower's usual business hours, to inspect Borrower's Books and 
to make copies thereof and to check, test, and appraise the Collateral in 
order to verify Borrower's financial condition or the amount, condition of, 
or any other matter relating to, the Collateral.

5.   REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants as follows: 

     5.1.   Due Organization and Qualification.  Borrower and each 
Subsidiary is a corporation duly existing and in good standing under the 
laws of its state of incorporation and qualified and licensed to do business 
in, and is in good standing in, any state in which the conduct of its 
business or its ownership of property requires that it be so qualified.

     5.2.   Due Authorization; No Conflict.  The execution, delivery, and 
performance of the Loan Documents are within Borrower's powers, have been 
duly authorized, and are not in conflict with nor constitute a breach of any 
provision contained in Borrower's Articles/Certificate of Incorporation or 
Bylaws, nor will they constitute an event of default under any material 
agreement to which Borrower is a party or by which Borrower is bound, except 
to the extent that certain intellectual property agreements prohibit the 
assignment of the rights thereunder to a third party without Borrower's or 
other party's consent and the Loan Documents constitute an assignment.

     5.3.   No Prior Encumbrances.  Borrower has good and indefeasible title 
to the Collateral, free and clear of Liens, except for Permitted Liens.

     5.4.   Intellectual Property.  Borrower is the sole owner of the 
Intellectual Property Collateral, except for non-exclusive licenses granted 
by Borrower to its customers in the ordinary course of business.  Each of 
the Patents is valid and enforceable, and no part of the Intellectual 
Property Collateral has been judged invalid or unenforceable, in whole or in 
part, and no claim has been made that any part of the Intellectual Property 
Collateral violates the rights of any third party.  Except for and upon the 
filing with the United States Patent and Trademark Office with respect to 
the Patents and Trademarks and the Register of Copyrights with respect to 
the Copyrights and Mask Works necessary to perfect the security interests 
created hereunder, and except as has been already made or obtained, no 
authorization, approval or other action by, and no notice to or filing with, 
any United States governmental authority or United States regulatory body is 
required either (i) for the grant by Borrower of the security interest 
granted hereby or for the execution, delivery or performance of Loan 
Documents by Borrower in the United States or (ii) for the perfection in the 
United States or the exercise by Bank of its rights and remedies hereunder.

                                     Page 12

<PAGE>


     5.5.   Name; Location of Chief Executive Office.  Except as disclosed 
in the Schedule, Borrower has not done business and will not without at 
least 30 days prior written notice to Bank do business under any name other 
than that specified on the signature page hereof.  The chief executive 
office of Borrower is located at the address indicated in Section 10 hereof.

     5.6.   Financial Statements.  All consolidated financial statements 
related to Borrower and any Subsidiary that have been delivered by Borrower 
to Bank fairly present in all material respects Borrower's consolidated 
financial condition as of the date thereof and Borrower's consolidated 
results of operations for the period then ended.

     5.7.   Regulatory Compliance.  Borrower and each Subsidiary has met the 
minimum funding requirements of ERISA with respect to any employee benefit 
plans subject to ERISA.  No event has occurred resulting from Borrower's 
failure to comply with ERISA that is reasonably likely to result in 
Borrower's incurring any liability that could have a Material Adverse 
Effect.  Borrower is not an "investment company" or a company "controlled" 
by an "investment company" within the meaning of the Investment Company Act 
of 1940.  Borrower is not engaged principally, or as one of its important 
activities, in the business of extending credit for the purpose of 
purchasing or carrying margin stock (within the meaning of Regulations T and 
U of the Board of Governors of the Federal Reserve System).  Borrower has 
complied with all the provisions of the Federal Fair Labor Standards Act.  
Borrower has not violated any statutes, laws, ordinances or rules applicable 
to it, violation of which could have a Material Adverse Effect.

     5.8.   Environmental Condition.  None of Borrower's or any Subsidiary's 
properties or assets has ever been used by Borrower or any Subsidiary or, to 
the best of Borrower's knowledge, by previous owners or operators, in the 
disposal of, or to produce, store, handle, treat, release, or transport, any 
hazardous waste or hazardous substance other than in accordance with 
applicable law; to the best of Borrower's knowledge, none of Borrower's 
properties or assets has ever been designated or identified in any manner 
pursuant to any environmental protection statute as a hazardous waste or 
hazardous substance disposal site, or a candidate for closure pursuant to 
any environmental protection statute; no lien arising under any 
environmental protection statute has attached to any revenues or to any real 
or personal property owned by Borrower or any Subsidiary; and neither 
Borrower nor any Subsidiary has received a summons, citation, notice, or 
directive from the Environmental Protection Agency or any other federal, 
state or other governmental agency concerning any action or omission by 
Borrower or any Subsidiary resulting in the release, or other disposition of 
hazardous waste or hazardous substances into the environment.

     5.9.   Taxes.  Borrower and each Subsidiary has filed or caused to be 
filed all tax returns required to be filed on a timely basis, and has paid, 
or has made adequate provision for the payment of, all taxes reflected 
therein, except those being contested in good faith by proper proceedings 
with adequate reserves under GAAP.

     5.10.  Subsidiaries.  Borrower does not own any stock, partnership 
interest or other equity securities of any Person, except for Permitted 
Investments.

                                     Page 13

<PAGE>


     5.11.  Government Consents.  Borrower and each Subsidiary has obtained 
all consents, approvals and authorizations of, made all declarations or 
filings with, and given all notices to, all governmental authorities that 
are necessary for the continued operation of Borrower's business as 
currently conducted.

     5.12.  Full Disclosure.  No representation, warranty or other statement 
made by Borrower in any certificate or written statement furnished to Bank 
contains any untrue statement of a material fact or omits to state a 
material fact necessary in order to make the statements contained in  such 
certificates or statements not misleading.

6.   AFFIRMATIVE COVENANTS

     Borrower covenants and agrees that, until payment in full of all 
outstanding Obligations, and for so long as Bank may have any commitment to 
make a Credit Extension hereunder, Borrower shall do all of the following:

     6.1.   Good Standing.  Borrower shall maintain its and each of its 
Subsidiaries' corporate existence and good standing in its jurisdiction of 
incorporation and maintain qualification in each jurisdiction in which the 
failure to so qualify could have a Material Adverse Effect.  Borrower shall 
maintain, and shall cause each of its Subsidiaries to maintain, to the 
extent consistent with prudent management of Borrower's business, in force 
all licenses, approvals and agreements, the loss of which could have a 
Material Adverse Effect.

     6.2.   Government Compliance.  Borrower shall meet, and shall cause 
each Subsidiary to meet, the minimum funding requirements of ERISA with 
respect to any employee benefit plans subject to ERISA.  Borrower shall 
comply, and shall cause each Subsidiary to comply, with all statutes, laws, 
ordinances and government rules and regulations to which it is subject, 
noncompliance with which could have a Material Adverse Effect.

     6.3.   Financial Statements, Reports, Certificates.  Borrower shall 
deliver to Bank:  (a) within five days of filing, copies of all statements, 
reports and notices sent or made available generally by Borrower to its 
security holders or to any holders of Subordinated Debt and all reports on 
Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission; 
(b) promptly upon receipt of notice thereof, a report of any legal actions 
pending or threatened against Borrower or any Subsidiary that could result 
in damages or costs to Borrower or any Subsidiary of $100,000.00 or more; 
(c) prompt notice of any material change in the composition of the 
Intellectual Property Collateral, including, but not limited to, any 
subsequent ownership right of Borrower in or to any Copyright, Patent or 
Trademark not specified in any intellectual property security agreement 
between Borrower and Bank or knowledge of an event that materially adversely 
effects the value of the Intellectual Property Collateral; and (d) such 
budgets, sales projections, operating plans or other financial information 
as Bank may reasonably request from time to time.

            Bank shall have a right from time to time hereafter to audit 
Borrower's Accounts at Borrower's expense, provided that such audits will be 
conducted no more often than every six months unless an Event of Default has 
occurred and is continuing.

                                     Page 14

<PAGE>

     6.4.   Taxes.  Borrower shall make, and shall cause each Subsidiary to 
make, due and timely payment or deposit of all material federal, state, and 
local taxes, assessments, or contributions required of it by law, and will 
execute and deliver to Bank, on demand, appropriate certificates attesting 
to the payment or deposit thereof; and Borrower will make, and will cause 
each Subsidiary to make, timely payment or deposit of all material tax 
payments and withholding taxes required of it by applicable laws, including, 
but not limited to, those laws concerning F.I.C.A., F.U.T.A., state 
disability, and local, state, and federal income taxes, and will, upon 
request, furnish Bank with proof satisfactory to Bank indicating that 
Borrower or a Subsidiary has made such payments or deposits; provided that 
Borrower or a Subsidiary need not make any payment if the amount or validity 
of such payment is (I) contested in good faith by appropriate proceedings , 
(ii) is reserved against (to the extent required by GAAP) by Borrower and 
(iii) no lien other than a Permitted Lien results.

      6.5.   Insurance.

                     (a)  Borrower, at its expense, shall keep the 
Collateral insured against loss or damage by fire, theft, explosion, 
sprinklers, and all other hazards and risks, and in such amounts, as 
ordinarily insured against by other owners in similar businesses conducted 
in the locations where Borrower's business is conducted on the date hereof.  
Borrower shall also maintain insurance relating to Borrower's ownership and 
use of the Collateral in amounts and of a type that are customary to 
businesses similar to Borrower's.

                     (b)  All such policies of insurance shall be in such 
form, with such companies, and in such amounts as are reasonably 
satisfactory to Bank.  All such policies of property insurance shall contain 
a lender's loss payable endorsement, in a form satisfactory to Bank, showing 
Bank as an additional loss payee thereof and all liability insurance 
policies shall show the Bank as an additional insured, and shall specify 
that the insurer must give at least 20 days notice to Bank before canceling 
its policy for any reason.  At Bank's request, Borrower shall deliver to 
Bank certified copies of such policies of insurance and evidence of the 
payments of all premiums therefor.  All proceeds payable under any such 
policy shall, at the option of Bank, be payable to Bank to be applied on 
account of the Obligations.

     6.6.   Principal Depository.  Borrower shall maintain its principal 
depository and operating accounts with Bank.

     6.7.   Registration of Intellectual Property Rights.

                     (a)  Borrower shall register or cause to be registered 
(to the extent not already registered) with the United States Patent and 
Trademark Office or the United States Copyright Office, as applicable, all 
intellectual property owned by Borrower within 30 days of the date of this 
Agreement.  Borrower shall register or cause to be registered with the 
United States Patent and Trademark Office or the United States Copyright 
Office, as applicable, those additional intellectual property rights 
developed or acquired by Borrower from time to time in connection with any 
product prior to the sale or licensing of such product to any third party, 
including without limitation revisions or additions to any intellectual 
property now owned by Borrower.

                                     Page 15

<PAGE>

                     (b)  Borrower shall execute and deliver such additional 
instruments and documents from time to time as Bank shall reasonably request 
to perfect Bank's security interest in the Intellectual Property Collateral.

                     (c)  Borrower shall (i) protect, defend and maintain 
the validity and enforceability of the Trademarks, Patents, Copyrights, and 
Mask Works, (ii) use its best efforts to detect infringements of the 
Trademarks, Patents, Copyrights and Mask Works and promptly advise Bank in 
writing of material infringements detected and (iii) not allow any 
Trademarks, Patents, Copyrights, or Mask Works to be abandoned, forfeited or 
dedicated to the public without the written consent of Bank, which shall not 
be unreasonably withheld, unless Bank determines that reasonable business 
practices suggest that abandon-ment is appropriate.

                     (d)   Bank shall have the right, but not the 
obligation, to take, at Borrower's sole expense, any actions that Borrower 
is required under this Section 6.8 to take but which Borrower fails to take, 
after 15 days' notice to Borrower.  Borrower shall reimburse and indemnify 
Bank for all reasonable costs and reasonable expenses incurred in the 
reasonable exercise of its rights under this Section 6.7.

     6.8.   Further Assurances.  At any time and from time to time Borrower 
shall execute and deliver such further instruments and take such further 
action as may reasonably be requested by Bank to effect the purposes of this 
Agreement.

7.   NEGATIVE COVENANTS

     Borrower covenants and agrees that, so long as any Credit Extension 
hereunder shall be available and until payment in full of the outstanding 
Obligations or for so long as Bank may have any commitment to make any 
Loans, Borrower will not do any of the following:

     7.1.   Dispositions.  Convey, sell, lease, transfer or otherwise 
dispose of (collectively, a "Transfer"), or permit any of its Subsidiaries 
to Transfer, all or any part of its business or property, other than 
Transfers: (i)  of inventory in the ordinary course of business, (ii) of 
non-exclusive licenses and similar arrangements for the use of the property 
of Borrower or its Subsidiaries in the ordinary course of business; (iii) 
that constitute payment of normal and usual operating expenses in the 
ordinary course of business;; or (iii) of worn-out or obsolete Equipment.

     7.2.   Changes in Business, Ownership, or Management, Business 
Locations.  Engage in any business, or permit any of its Subsidiaries to 
engage in any business, other than the businesses currently engaged in by 
Borrower and any business substantially similar or related thereto (or 
incidental thereto), or suffer a material change in Borrower's ownership or 
management.  Borrower will not, without at least 30 days prior written 
notification to Bank, relocate its chief executive office or add any new 
offices or business locations.

     7.3.   Mergers or Acquisitions.  Merge or consolidate, or permit any of 
its Subsidiaries to merge or consolidate, with or into any other business 
organization, or acquire, or permit any of its Subsidiaries to acquire, all 
or substantially all of the capital stock or property of another Person.

                                     Page 16

<PAGE>


     7.4.   Indebtedness.  Create, incur, assume or be or remain liable with 
respect to any Indebtedness, or permit any Subsidiary so to do, other than 
Permitted Indebtedness.

     7.5.   Distributions.  Pay any dividends or make any other distribution 
or payment on account of or in redemption, retirement or purchase of any 
capital stock.

     7.6.   Investments.  Directly or indirectly acquire or own, or make any 
Investment in or to any Person, or permit any of its Subsidiaries so to do, 
other than Permitted Investments.

     7.7.   Transactions with Affiliates.  Directly or indirectly enter into 
or permit to exist any material transaction with any Affiliate of Borrower 
except for transactions that are in the ordinary course of Borrower's 
business, upon fair and reasonable terms that are no less favorable to 
Borrower than would be obtained in an arm's length transaction with a 
non-affiliated Person.

     7.8.   Intellectual Property Agreements. Borrower shall not permit the 
inclusion in any material contract to which it becomes a party of any 
provisions that could or might in any way prevent the creation of a security 
interest in Borrower's rights and interests in any property included within 
the definition of the Intellectual Property Collateral acquired under such 
contracts, except to the extent that such provisions are necessary in 
Borrower's exercise of its reasonable business judgement.

     7.9.   Subordinated Debt.  Make any payment in respect of any 
Subordinated Debt, or permit any of its Subsidiaries to make any such 
payment, except in compliance with the terms of such Subordinated Debt, or 
amend any provision contained in any documentation relating to the 
Subordinated Debt without Bank's prior written consent.

     7.10.   Compliance.  Become an "investment company" or a company 
controlled by an "investment company," within the meaning of the Investment 
Company Act of 1940, or become principally engaged in, or undertake as one 
of its important activities, the business of extending credit for the 
purpose of purchasing or carrying margin stock, or use the proceeds of any 
Loan for such purpose; fail to meet the minimum funding requirements of 
ERISA; permit a Reportable Event or Prohibited Transaction, as defined in 
ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or 
violate any other law or regulation, which violation could have a Material 
Adverse Effect; or permit any of its Subsidiaries to do any of the 
foregoing.

8.   EVENTS OF DEFAULT

     Any one or more of the following events shall constitute an "Event of 
Default" by Borrower under this Agreement:

                                     Page 17

<PAGE>


     8.1.   Payment Default.  If Borrower fails to pay, when due, any of the 
Obligations, and such default is not cured within five days after receipt by 
Borrower of notice of such default.

     8.2.   Covenant Default.

                     (a)  If Borrower fails to perform any obligation under 
Sections 6.3, 6.5, 6.6, or 6.7 or violates any of the covenants contained in 
Article 7 of this Agreement, and such default is not cured within ten days 
after receipt by Borrower of notice of such default, or 

                     (b)  If Borrower fails or neglects to perform, keep, or 
observe any other material term, provision, condition, covenant, or 
agreement contained in this Agreement or in any of the Loan Documents and 
as to any default under such other term, provision, condition, covenant or 
agreement that can be cured, has failed to cure such default within ten days 
after receipt by Borrower of notice of such default; provided that if the 
default cannot by its nature be cured within the ten day period or cannot 
after diligent attempts by Borrower be cured within such 10 day period, and 
such default is likely to be cured within a reasonable time, then Borrower 
shall have an additional reasonable period (which shall not in any case 
exceed 30 days) to attempt to cure such default, and within such reasonable 
time period the failure to have cured such default shall not be deemed an 
Event of Default (provided that no Loans will be required to be made during 
such cure period);

     8.3.   Insolvency.  If an Insolvency Proceeding is commenced by 
Borrower, or if an Insolvency Proceeding is commenced against Borrower and 
is not dismissed or stayed within 30 days (provided that no Loans will be 
made prior to the dismissal of such Insolvency Proceeding);

     8.4.   Misrepresentations.  If any material misrepresentation or 
material misstatement exists now or hereafter in any warranty or 
representation set forth herein or in any certificate or writing delivered 
to Bank by Borrower or any Person acting on Borrower's behalf pursuant to 
this Agreement or to induce Bank to enter into this Agreement or any other 
Loan Document.

     8.5.   Guaranty.  Any guaranty of all or a portion of the Obligations 
ceases for any reason to be in full force and effect, or any Guarantor fails 
to perform any obligation under any guaranty of all or a portion of the 
Obligations, or any material misrepresentation or material misstatement 
exists now or hereafter in any warranty or representation set forth in any 
guaranty of all or a portion of the Obligations or in any certificate 
delivered to Bank in connection with such guaranty, or any of the 
circumstances described in Section 8.3 occurs with respect to any Guarantor.

9.   BANK'S RIGHTS AND REMEDIES

     9.1.   Rights and Remedies.  Upon the occurrence and during the 
continuance of an Event of Default, Bank may, at its election, without 
notice of its election and without demand, do any one or more of the 
following, all of which are authorized by Borrower:

                     (a)  Declare all Obligations, whether evidenced by this 
Agreement, by any of the other Loan Documents, or otherwise, immediately due 
and payable (provided that upon the occurrence of an Event of Default 
described in Section 8.5 all Obligations shall become immediately due and 
payable without any action by Bank);

                                     Page 18

<PAGE>


                     (b)  Cease advancing money or extending credit to or 
for the benefit of Borrower under this Agreement or under any other 
agreement between Borrower and Bank;

                     (c)  Settle or adjust disputes and claims directly with 
account debtors for amounts, upon terms and in whatever order that Bank 
reasonably considers advisable;

                     (d)  Without notice to or demand upon Borrower, make 
such payments and do such acts as Bank considers necessary or reasonable to 
protect its security interest in the Collateral.  Borrower agrees to 
assemble the Collateral if Bank so requires, and to make the Collateral 
available to Bank as Bank may designate.  Borrower authorizes Bank to enter 
the premises where the Collateral is located, to take and maintain 
possession of the Collateral, or any part of it, and to pay, purchase, 
contest, or compromise any encumbrance, charge, or lien which in Bank's 
determination appears to be prior or superior to its security interest and 
to pay all expenses incurred in connection therewith.  With respect to any 
of Borrower's premises, Borrower hereby grants Bank a license to enter such 
premises and to occupy the same, without charge in order to exercise any of 
Bank's rights or remedies provided herein, at law, in equity, or other-wise;

                     (e)  Without notice to Borrower set off and apply to 
the Obligations any and all (i) balances and deposits of Borrower held by 
Bank, or (ii) indebtedness at any time owing to or for the credit or the 
account of Borrower held by Bank;

                     (f)  Ship, reclaim, recover, store, finish, maintain, 
repair, prepare for sale, advertise for sale, and sell (in the manner 
provided for herein) the Collateral.  Bank is hereby granted a non-
exclusive, royalty-free license or other right, solely pursuant to the 
provisions of this Section 9.1, to use, without charge, Borrower's labels, 
patents, copyrights, mask works, rights of use of any name, trade secrets, 
trade names, trademarks, service marks, and advertising matter, or any 
property of a similar nature, as it pertains to the Collateral, in 
completing production of, advertising for sale, and selling any Collateral 
and, in connection with Bank's exercise of its rights under this Section 
9.1, Borrower's rights under all licenses and all franchise agreements shall 
inure to Bank's benefit;

                     (g)  Sell the Collateral at either a public or private 
sale, or both, by way of one or more contracts or transactions, for cash or 
on terms, in such manner and at such places (including Borrower's premises) 
as Bank determines is commercially reasonable, and apply the proceeds 
thereof to the Obligations in whatever manner or order it deems appropriate;

                     (h)  Bank may credit bid and purchase at any public 
sale, or at any private sale as permitted by law;

                     (i)  Any deficiency that exists after disposition of 
the Collateral as provided above will be paid immediately by Borrower; and

                                     Page 19

<PAGE>

                     (j)  Bank shall have a non-exclusive, royalty-free 
license to use the Intellectual Property Collateral to the extent reasonably 
necessary to permit Bank to exercise its rights and remedies upon the 
occurrence of an Event of Default.

     9.2.   Power of Attorney.  Effective only upon the occurrence and 
during the continuance of an Event of Default, Borrower hereby irrevocably 
appoints Bank (and any of Bank's designated officers, or employees) as 
Borrower's true and lawful attorney to:  (a) send requests for verification 
of Accounts or notify account debtors of Bank's security interest in the 
Accounts; (b) endorse Borrower's name on any checks or other forms of 
payment or security that may come into Bank's possession; (c) sign 
Borrower's name on any invoice or bill of lading relating to any Account, 
drafts against account debtors, schedules and assignments of Accounts, 
verifications of Accounts, and notices to account debtors; (d) make, settle, 
and adjust all claims under and decisions with respect to Borrower's 
policies of insurance; and (e) settle and adjust disputes and claims 
respecting the accounts directly with account debtors, for amounts and upon 
terms which Bank determines to be reasonable; (f) to modify, in its sole 
discretion, any intellectual property security agreement entered into 
between Borrower and Bank without first obtaining Borrower's approval of or 
signature to such modification by amending Exhibit A, Exhibit B, Exhibit C, 
and Exhibit D, thereof, as appropriate, to include reference to any right, 
title or interest in any Copyrights, Patents, Trademarks, Mask Works 
acquired by Borrower after the execution hereof or to delete any reference 
to any right, title or interest in any Copyrights, Patents, Trademarks, or 
Mask Works in which Borrower no longer has or claims any right, title or 
interest; (g) to file, in its sole discretion, one or more financing or 
continuation statements and amendments thereto, relative to any of the 
Collateral without the signature of Borrower where permitted by law; and (h) 
to transfer the Intellectual Property Collateral into the name of Bank or a 
third party to the extent permitted under the UCC provided Bank may exercise 
such power of attorney to sign the name of Borrower on any of the documents 
described in Section 4.2 regardless of whether an Event of Default has 
occurred.  The appointment of Bank as Borrower's attorney in fact, and each 
and every one of Bank's rights and powers, being coupled with an interest, 
is irrevocable until all of the Obligations have been fully repaid and 
performed and Bank's obligation to provide Loans hereunder is terminated.

     9.3.   Accounts Collection.  Upon the occurrence and during the 
continuance of an Event of Default, Bank may notify any Person owing funds 
to Borrower of Bank's security interest in such funds and verify the amount 
of such Account.  Borrower shall collect all amounts owing to Borrower for 
Bank, receive in trust all payments as Bank's trustee, and if requested or 
required by Bank, immediately deliver such payments to Bank in their 
original form as received from the account debtor, with proper endorsements 
for deposit.

     9.4.   Bank Expenses.  If Borrower fails to pay any amounts or furnish 
any required proof of payment due to third persons or entities, as required 
under the terms of this Agreement, then Bank may do any or all of the 
following:  (a) make payment of the same or any part thereof; (b) set up 
such reserves under the Revolving Commitment as Bank deems necessary to 
protect Bank from the exposure created by such failure; or (c) obtain and 
maintain insurance policies of the type discussed in Section 6.6 of this 
Agreement, and take any action with respect to such policies as Bank deems 
prudent.  Any amounts so paid or deposited by Bank shall constitute Bank 
Expenses, shall be immediately due and payable, and shall bear interest at 
the then applicable rate hereinabove provided, and shall be secured by the 
Collateral.  Any payments made by Bank shall not constitute an agreement by 
Bank to make similar payments in the future or a waiver by Bank of any Event 
of Default under this Agreement.

                                     Page 20

<PAGE>


     9.5.   Bank's Liability for Collateral.  So long as Bank complies with 
reasonable banking practices, Bank shall not in any way or manner be liable 
or responsible for:  (a) the safekeeping of the Collateral; (b) any loss or 
damage thereto occurring or arising in any manner or fashion from any cause; 
(c) any diminution in the value thereof; or (d) any act or default of any 
carrier, warehouseman, bailee, forwarding agency, or other person 
whomsoever.  All risk of loss, damage or destruction of the Collateral shall 
be borne by Borrower.

     9.6.   Remedies Cumulative.  Bank's rights and remedies under this 
Agreement, the Loan Documents, and all other agreements shall be cumulative.  
Bank shall have all other rights and remedies  not expressly set forth 
herein  as provided under the UCC, by law, or in equity.  No exercise by 
Bank of one right or remedy shall be deemed an election, and no waiver by 
Bank of any Event of Default on Borrower's part shall be deemed a continuing 
waiver.  No delay by Bank shall constitute a waiver, election, or 
acquiescence by it.  No waiver by Bank shall be effective unless made in a 
written document signed on behalf of Bank and then shall be effective only 
in the specific instance and for the specific purpose for which it was 
given.

     9.7.   Demand; Protest.  Borrower waives demand, protest, notice of 
protest, notice of default or dishonor, notice of payment and nonpayment, 
notice of any default, nonpayment at maturity, release, compromise, 
settlement, extension, or renewal of accounts, documents, instruments, 
chattel paper, and guarantees at any time held by Bank on which Borrower may 
in any way be liable.

10.  NOTICES

     Unless otherwise provided in this Agreement, all notices or demands by 
any party relating to this Agreement or any other agreement entered into in 
connection herewith shall be in writing and (except for financial statements 
and other informational documents which may be sent by first-class mail, 
postage prepaid) shall be personally delivered or sent by a recognized 
overnight delivery service, by certified mail, postage prepaid, return 
receipt requested, or by telefacsimile to Borrower or to Bank, as the case 
may be, at its addresses set forth below for such party on the signature 
pages hereof.  The parties hereto may change the address at which they are 
to receive notices hereunder, by notice in writing in the foregoing manner 
given to the other.

                                     Page 21

<PAGE>


11.  CHOICE OF LAW AND VENUE; WAIVER OF JURY TRIAL

     The Loan Documents shall be governed by, and construed in accordance 
with, the internal laws of the State of California, without regard to 
principles of conflicts of law.  Each of Borrower and Bank hereby submits to 
the exclusive jurisdiction of the state and Federal courts located in the 
County of Santa Clara, State of California.   BORROWER AND BANK EACH HEREBY 
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF 
ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE 
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, 
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH 
PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL 
INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT.  EACH PARTY REPRESENTS AND 
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT 
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING 
CONSULTATION WITH LEGAL COUNSEL.

12.  GENERAL PROVISIONS

     12.1.   Successors and Assigns.  This Agreement shall bind and inure to 
the benefit of the respective successors and permitted assigns of each of 
the parties; provided that neither this Agreement nor any rights hereunder 
may be assigned by Borrower without Bank's prior written consent, which 
consent may be granted or withheld in Bank's sole discretion.  Bank shall 
have the right without the consent of or notice to Borrower to sell, 
transfer, negotiate, or grant participation in all or any part of, or any 
interest in, Bank's obligations, rights and benefits hereunder.

     12.2.   Indemnification.  Borrower shall , indemnify ,defend, protect 
and hold harmless Bank and its officers, employees, and agents against:  (a) 
all obligations, demands, claims, and liabilities claimed or asserted by any 
other party in connection with the transactions contemplated by the Loan 
Documents; and (b) all losses or Bank Expenses in any way suffered, 
incurred, or paid by Bank as a result of or in any way arising out of, 
following, or consequential to transactions between Bank and Borrower 
whether under the Loan Documents, or otherwise (including without limitation 
reasonable attorneys fees and expenses), except for losses caused by Bank's 
gross negligence or willful misconduct.

     12.3.   Time of Essence.  Time is of the essence for the performance of 
all obligations set forth in this Agreement.

     12.4.   Severability of Provisions.  Each provision of this Agreement 
shall be severable from every other provision of this Agreement for the 
purpose of determining the legal enforceability of any specific provision.

     12.5.   Amendments in Writing, Integration.  This Agreement cannot be 
amended or terminated except by a writing signed by Borrower and Bank.  All 
prior agreements, understandings, representations, warranties, and 
negotiations between the parties hereto with respect to the subject matter 
of this Agreement, if any, are merged into this Agreement and the Loan 
Documents.

                                     Page 22

<PAGE>


     12.6.   Counterparts.  This Agreement may be executed in any number of 
counterparts and by different parties on separate counterparts, each of 
which, when executed and delivered, shall be deemed to be an original, and 
all of which, when taken together, shall constitute but one and the same 
Agreement.

     12.7.   Survival.  All covenants, representations and warranties made 
in this Agreement shall continue in full force and effect so long as any 
Obligations remain outstanding.  The obligations of Borrower to indemnify 
Bank with respect to the expenses, damages, losses, costs and liabilities 
described in Section 12.2 shall survive until all applicable statute of 
limitations periods with respect to actions that may be brought against Bank 
have run; provided that so long as the obligations referred to in the first 
sentence of this Section 12.7 have been satisfied, and Bank has no 
commitment to make any Credit Extensions or to make any other loans to 
Borrower, Bank shall release all security interests granted hereunder and 
redeliver all Collateral held by it in accordance with applicable law.

     12.8.   Confidentiality.  In handling any confidential information Bank 
shall exercise the same degree of care that it exercises with respect to its 
own proprietary information of the same types to maintain the 
confidentiality of any non-public information thereby received or received 
pursuant to this Agreement except that disclosure of such information may be 
made (i) to the subsidiaries or affiliates of Bank in connection with their 
present or prospective business relations with Borrower, (ii) to prospective 
transferees or purchasers of any interest in the Loans, provided that they 
have entered into a comparable confidentiality agreement in favor of 
Borrower and have delivered a copy to Borrower, (iii) as required by law, 
regulations, rule or order, subpoena, judicial order or similar order,  
(iv) as may be required in connection with the examination, audit or similar 
investigation of Bank, and (v) as Bank may deem appropriate in connection 
with the exercise of any remedies hereunder.  Confidential information 
hereunder shall not include information that either: (a) is in the public 
domain or in the knowledge or possession of Bank when disclosed to Bank, or 
becomes part of the public domain after disclosure to Bank through no fault 
of Bank; or (b) is disclosed to Bank by a third party, provided Bank does 
not have actual knowledge that such third party is prohibited from 
disclosing such information.

                                     Page 23

<PAGE>


     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
executed as of the date first above written.


INTEGRATED PACKAGING ASSEMBLY CORPORATION,
a Delaware corporation


By						
  ------------------------------------------

Title
     ---------------------------------------   

Address for Notices:

     2221 Old Oakland Road
     San Jose, CA  95131
     Attention: Patrick Verderico




SILICON VALLEY FINANCIAL SERVICES
A division of Silicon Valley Bank


By
  -----------------------------------------

Title
     --------------------------------------

Address for Notices:

     3003 Tasman Drive
     Santa Clara, CA  95054
     Attention:  Richelle Medina 

                                     Page 24

<PAGE>
                                  
                                  EXHIBIT A
                                  ---------

     The Collateral shall consist of all right, title and interest of 
Borrower, whether now existing or hereafter acquired or created and wherever 
located, in and to the following:

     (a)   All goods, equipment, machinery, fixtures, vehicles (including 
motor vehicles and trailers), and any interest in any of the foregoing, and 
all attachments, accessories, accessions, replacements, substitutions, 
additions, and improvements to any of the foregoing;

     (b)   All inventory,  merchandise, raw materials, parts, supplies, 
packing and shipping materials, work in process and finished products 
including such inventory as is temporarily out of Borrower's custody or 
possession or in transit and including any returns upon any accounts or 
other proceeds, including insurance proceeds, resulting from the sale or 
disposition of any of the foregoing and any documents of title representing 
any of the above;

     (c)   All contract rights, general intangibles, goodwill, trademarks, 
servicemarks, trade styles, trade names, patents, patent applications, 
leases, license agreements, franchise agreements, blueprints, drawings, 
purchase orders, customer lists, route lists, infringements, claims, 
computer programs, computer discs, computer tapes, literature, reports, 
catalogs, design rights, income tax refunds, payments of insurance and 
rights to payment of any kind;

     (d)   All accounts, contract rights, royalties, license rights and all 
other forms of obligations owing to Borrower, whether or not arising out of 
the sale or lease of goods, the licensing of technology or the rendering of 
services by Borrower, and whether or not earned by performance, and any and 
all credit insurance, guaranties, and other security therefor, as well as 
all merchandise returned to or reclaimed by Borrower;

     (e)   All documents, cash, deposit accounts, securities, investment 
property, letters of credit, certificates of deposit, instruments and 
chattel paper and Borrower's Books relating to the foregoing;

     (f)   All copyright rights, copyright applications, copyright 
registrations and like protections in each work of authorship and derivative 
work thereof, whether published or unpublished; all trade secret rights, 
including all rights to unpatented inventions, know-how, operating manuals, 
license rights and agreements and confidential information; all mask work or 
similar rights available for the protection of semiconductor chips; all 
claims for damages by way of any past, present and future infringement of 
any of the foregoing; and

     (g)   All Borrower's Books relating to the foregoing and any and all 
claims, rights and interests in any of the above and all substitutions for, 
additions and accessions to and proceeds thereof.

                                     Page 25

<PAGE>


                              EXHIBIT B
                              ---------

           LOAN PAYMENT/LOAN ADVANCE TELEPHONE REQUEST FORM
         DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.


TO:  CENTRAL CLIENT SERVICE DIVISION            DATE:  			

FAX#:  (408)                                    TIME:  			
            ----------------

FROM:											
       BORROWER'S NAME

FROM:											
       AUTHORIZED SIGNER'S NAME

												
       AUTHORIZED SIGNATURE

PHONE:
       ----------------------


FROM:  ACCOUNT #
                 ------------------------------

TO:    ACCOUNT #
                 ------------------------------


REQUESTED TRANSACTION TYPE          REQUEST DOLLAR AMOUNT
--------------------------          ---------------------

PRINCIPAL INCREASE (Loan)           $	
PRINCIPAL PAYMENT (ONLY)            $	
INTEREST PAYMENT (ONLY)             $	
PRINCIPAL AND INTEREST (PAYMENT)    $	

OTHER INSTRUCTIONS: 								

     All representations and warranties of Borrower stated in the Loan and 
Security Agreement are true, correct and complete in all material respects 
as of the date of the telephone request for and Loan confirmed by this Loan 
Request; provided that those representations and warranties expressly 
referring to another date shall be true, correct and complete in all 
material respects as of such date.

BANK USE ONLY:
TELEPHONE REQUEST:
-----------------

The following person is authorized to request the loan payment transfer/loan 
advance on the advance designated account and is known to me.

Authorized Requester: 				 

						
     Authorized Signature (Bank)
     Phone #

                  DISBURSEMENT REQUEST AND AUTHORIZATION

TO:      SILICON VALLEY BANK

FROM:                                ("Borrower")
      ------------------------------

                                     Page 26

<PAGE>



LOAN TYPE.  This is a Variable Rate, Revolving Line of Credit of a
principal amount up to $              .

PRIMARY PURPOSE OF LOAN.  The primary purpose of this loan is for
business.

SPECIFIC PURPOSE.  The specific purpose of this loan is:                .
                                                        ----------------

DISBURSEMENT INSTRUCTIONS.  Borrower understands that no loan proceeds will 
be disbursed until all of Bank's conditions for making the loan have been 
satisfied.  Please disburse the loan proceeds as follows:

                                                           Revolving Line
                                                           --------------

     Amount paid to Borrower directly:                     $        
     Undisbursed Funds                                     $        
     Principal                                             $        

CHARGES PAID IN CASH.  Borrower has paid or will pay in cash as agreed the 
following charges:

     Prepaid Finance Charges Paid in Cash:                 $        
     Loan Fee                                              $ 
     Receivables Audit                                     $

     Other Charges Paid in Cash:                           $        
     UCC Search Fees                                       $
     UCC Filing Fees                                       $
     Patent Filing Fees                                    $
     Trademark Filing Fees                                 $
     Copyright Filing Fees                                 $
     Outside Counsel Fees and Expenses                     $ 
     [ESTIMATE, DO NOT LEAVE BLANK] 

      Total Charges Paid in Cash                           $        

AUTOMATIC PAYMENTS.  Borrower hereby authorizes Bank automatically to deduct 
from Borrower's account numbered ______ the amount of any loan payment.  If 
the funds in the account are insufficient to cover any payment, Bank shall 
not be obligated to advance funds to cover the payment. 

                                     Page 27

<PAGE>


FINANCIAL CONDITION.  BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND 
WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND 
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS 
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO BANK.  THIS 
AUTHORIZATION IS DATED AS OF ________________,19____.

BORROWER:

By:
   ----------------------------------------
   Authorized Officer



                      AGREEMENT TO PROVIDE INSURANCE

TO:    SILICON VALLEY BANK
FROM:  INTEGRATED PACKAGING ASSEMBLY CORPORATION ("Borrower")

     INSURANCE REQUIREMENTS. Borrower understands that insurance coverage is 
required in connection with the extending of a loan or the providing of 
other financial accommodations to Borrower by Bank.  These requirements are 
set forth in the Loan Documents.  The following minimum insurance coverages 
must be provided on the following described collateral (the "Collateral"):

          Collateral:     All Inventory, Equipment and Fixtures.
          Type:           All risks, including fire, theft and liability.
          Amount:         Full insurable value.
          Basis:          Replacement value.
          Endorsements:   Loss payable clause to Bank with stipulation that 
coverage will not be cancelled or diminished without a minimum of 20 days 
prior written notice to Bank.

     INSURANCE COMPANY.  Borrower may obtain insurance from any insurance 
company Borrower may choose that is reasonably acceptable to Bank.  Borrower 
understands that credit may not be denied solely because insurance was not 
purchased through Bank.

     FAILURE TO PROVIDE INSURANCE.  Borrower agrees to deliver to Bank, on 
or before closing, evidence of the required insurance as provided above, 
with an effective date of_________________,19____, or earlier.  Borrower
acknowledges and agrees that if Borrower fails to provide any required 
insurance or fails to continue such insurance in force, Bank may do so at 
Borrower's expense as provided in the Loan and Security Agreement.  The cost 
of such insurance, at the option of Bank, shall be payable on demand or 
shall be added to the indebtedness as provided in the security document.  
BORROWER ACKNOWLEDGES THAT IF BANK SO PURCHASES ANY SUCH INSURANCE, THE 
INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE TO THE 
COLLATERAL, UP TO THE BALANCE OF THE LOAN; HOWEVER, BORROWER'S EQUITY IN THE 
COLLATERAL MAY NOT BE INSURED.  IN ADDITION, THE INSURANCE MAY NOT PROVIDE 
ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE 
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.

                                     Page 28

<PAGE>


     AUTHORIZATION.  For purposes of insurance coverage on the Collateral, 
Borrower authorizes Bank to provide to any person (including any insurance 
agent or company) all information Bank deems appropriate, whether regarding 
the Collateral, the loan or other financial accommodations, or both.

     BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT 
TO PROVIDE INSURANCE AND AGREES TO ITS TERMS.  THIS AGREEMENT IS DATED
____________________,19____.

BORROWER:

By:
   -------------------------------
         Authorized Officer

     FOR BANK USE ONLY
     INSURANCE VERIFICATION

DATE:                                   PHONE: 
AGENT'S NAME:
INSURANCE COMPANY:
POLICY NUMBER:
EFFECTIVE DATES:
COMMENTS:

                                     Page 29