LOAN AND SECURITY AGREEMENT



                          Dated as of December 10, 1998



                                     between



                                   ACCOM, INC.


                                   as Borrower

                                       and


                         LASALLE BUSINESS CREDIT, INC.,

                                    as Lender



                                   $7,500,000

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                            Page

1. DEFINITIONS.................................................................1
    (a)General Definitions.....................................................1
    (b)Accounting Terms and Definitions.......................................10

2. REVOLVING LOANS............................................................11

3. [INTENTIONALLY OMITTED.]...................................................12

4. LETTERS OF CREDIT..........................................................12

5. INTEREST, FEES AND CHARGES.................................................13
    (a)Rates of Interest......................................................13
    (b)Computation of Interest and Fees.......................................13
    (c)Maximum Interest.......................................................13
    (d)Letter of Credit Fees..................................................13
    (e)Facility Fee...........................................................13
    (f)Unused Line Fee........................................................14
    (g)Examination Fees.......................................................14
    (h)Capital Adequacy Charge................................................14

6. LOAN ADMINISTRATION........................................................14
    (a)Loan Requests..........................................................14
    (b)Disbursement...........................................................15

7. GRANT OF SECURITY INTEREST TO LASALLE......................................15

8. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS THEREIN....16

9. POSSESSION OF COLLATERAL AND RELATED MATTERS...............................16

10. COLLECTIONS...............................................................16

11. SCHEDULES AND REPORTS.....................................................18

12. TERMINATION...............................................................19

13. REPRESENTATIONS AND WARRANTIES............................................19

14. COVENANTS.................................................................23

15. CONDITIONS PRECEDENT......................................................31



                                        i
<PAGE>

16. DEFAULT...................................................................34

17. REMEDIES UPON AN EVENT OF DEFAULT.........................................35

18. INDEMNIFICATION...........................................................35

19. NOTICES...................................................................36

20. CHOICE OF GOVERNING LAW AND CONSTRUCTION..................................36

21. FORUM SELECTION AND SERVICE OF PROCESS....................................36

22. MODIFICATION AND BENEFIT OF AGREEMENT.....................................37

23. HEADINGS OF SUBDIVISIONS..................................................37

24. POWER OF ATTORNEY.........................................................37

25. WAIVER OF JURY TRIAL; OTHER WAIVERS.......................................37

26. ADVERTISING...............................................................38

27. BORROWER'S ACKNOWLEDGMENT.................................................39


                                       ii
<PAGE>


                             EXHIBITS AND SCHEDULES

EXHIBIT A CONCENTRATION LIMITS
EXHIBIT B BUSINESS AND COLLATERAL LOCATIONS
EXHIBIT C PERMITTED LIENS
EXHIBIT D FORM OF OFFICER'S CERTIFICATE
EXHIBIT E REPORTING REQUIREMENTS

SCHEDULE 13(i)    LITIGATION
SCHEDULE 13(q)    INDEBTEDNESS
SCHEDULE 13(s)    PARENTS, SUBSIDIARIES AND DIVISIONS
SCHEDULE 15(a)    CLOSING AGENDA

                                      iii
<PAGE>


                           LOAN AND SECURITY AGREEMENT

         THIS LOAN AND SECURITY AGREEMENT  ("Agreement") is made as of this 10th
day of December,  1998, by and between LASALLE BUSINESS CREDIT, INC., a Delaware
corporation ("LaSalle"),  with its principal office at 135 South LaSalle Street,
Chicago,  Illinois 60603, and ACCOM, INC., a Delaware corporation  ("Borrower"),
with its principal office at 1490 O'Brien Drive, Menlo Park, California 94025.

                                   WITNESSETH:

         WHEREAS,  from time to time Borrower may request  LaSalle to make loans
and advances to and extend certain credit  accommodations  to Borrower,  and the
parties  wish to provide  for the terms and  conditions  upon which such  loans,
advances and credit accommodations will be made.

         NOW,  THEREFORE,  in  consideration  of any loans,  advances and credit
accommodations  (including any loans by renewal or extension)  hereafter made to
Borrower by LaSalle, and for other good and valuable consideration,  the receipt
and sufficiency of which are hereby acknowledged by Borrower,  the parties agree
as follows:

1.       DEFINITIONS.

         (a) General Definitions.

         "A/R Advance Rate" means,  at any time,  the percentage set forth below
opposite the  applicable  average  Dilution of  Borrower's  Accounts for the six
months preceding the time of such determination:

             Dilution                           A/R Advance Rate
             --------                           ----------------

             0-5%                                    85%
             5.1-6%                                  83%
             6.1-7%                                  81%
             7.1-8%                                  79%
             8.1-9%                                  77%
             9.1-10%                                 75%
             More than 10%                           Rate determined by LaSalle
                                                     in the exercise of its sole
                                                     credit judgment

         "Account,"  "Account  Debtor,"  "Chattel  Paper,"  "Deposit  Accounts,"
"Documents,"   "Equipment,"  "General  Intangibles,"   "Goods,"   "Instruments,"
"Inventory,"  and  "Investment  Property"  shall  have the  respective  meanings
assigned to such terms, as of the date of this Agreement,  in the Oregon Uniform
Commercial Code.

         "Affiliate"  shall mean any Person directly or indirectly  controlling,
controlled by or under common control with Borrower.
<PAGE>

         "Appraisal"   shall  mean  the  net  liquidation   value  appraisal  of
Borrower's  inventory  to  be  performed  by  Emerald  Technology  Valuation  at
Borrower's expense as provided in paragraph 14(t) below.

         "Asset  Purchase  Agreement"  shall mean the Asset  Purchase  Agreement
dated December 10, 1998 among Borrower,  Scitex Digital Video, Inc.  ("Scitex"),
Scitex Digital Video (Europe) Ltd.,  Scitex Digital Video (Asia Pacific),  Inc.,
Scitex Development Corp. and Scitex Corporation Ltd.

         "Borrowing Base" shall have the meaning  specified in paragraph 2(b)(i)
hereof.

         "Business  Day" shall mean any day other than a  Saturday,  Sunday,  or
such other day as banks in Chicago,  Illinois or Portland, Oregon are authorized
or required to be closed for business.

         "Capital  Expenditures"  shall mean,  with  respect to any period,  the
aggregate of all  expenditures  (whether paid in cash or accrued as  liabilities
and including expenditures for capitalized lease obligations) by Borrower during
such period that are  required  by GAAP to be  included in or  reflected  by the
property,  plant or  equipment  or similar  fixed asset  accounts in the balance
sheet of Borrower.

         "Cash Flow" shall mean net income  before tax,  plus  depreciation  and
amortization,  minus tax  payments,  plus tax  refunds  received , less  Capital
Expenditures  (unless  financed by Persons other than LaSalle in compliance with
the provisions of this Agreement),  less Other  Capitalized  Expenses,  less all
scheduled principal payments made on indebtedness (excluding,  however, payments
made under this  Agreement and  prepayments  permitted  under the  Subordination
Agreement between LaSalle and Scitex Digital Video, Inc.).

         "Change of Control" shall mean if the current  shareholders of Borrower
shall  cease,  directly  or  indirectly,  of record or  beneficially,  to own or
control in the  aggregate at least sixty  percent  (60%) of the voting shares of
Borrower free and clear of all liens and security interests.

         "Closing Agenda" shall have the meaning specified in paragraph 15(a)(i)
hereof.

         "Closing Date" shall mean the date first stated above.

         "Collateral"  shall  mean  all of the  personal  property  of  Borrower
described in paragraph 7 hereof,  and all other real or personal property of any
Obligor  or any other  Person  now or  hereafter  pledged  to LaSalle to secure,
either directly or indirectly, repayment of any of the Liabilities.

         "Debt Service  Coverage  Ratio" shall mean, with respect to any period,
the ratio of (i) net income before taxes for such period  (excluding any pre-tax
gains on the sale of assets  

                                       2
<PAGE>

other  than the  sale of  Inventory  in the  ordinary  course  of  business  and
excluding  other pre-tax  extraordinary  gains),  minus any income taxes as paid
during such period, plus any income tax refunds received,  plus depreciation and
amortization  deducted in determining net income for such period,  minus Capital
Expenditures for such period not financed,  minus Other Capitalized Expenses for
such period and minus any cash  dividends  paid or accrued and cash  withdrawals
paid or accrued to shareholders  or other  Affiliates for such period which were
not  calculated in  determining  pre-tax net income,  to (ii) current  principal
maturities of long term debt and capitalized leases paid or scheduled to be paid
during such period,  plus any  prepayments  on  indebtedness  owed to any Person
(except trade payables,  revolving loans and prepayments allowed on subordinated
indebtedness pursuant to paragraph 14(u) below) and paid during such period.

         "Default"  shall mean any event,  condition  or default  which with the
giving of notice, the lapse of time, or both, would be an Event of Default.

         "Dilution"  shall  mean,  with  respect to any period,  the  percentage
obtained  by  dividing:  (a) the sum of  non-cash  credits  against  Accounts of
Borrower  for such  period,  plus  pending  or  probable,  but not yet  applied,
non-cash credits against Accounts of Borrower for such period,  as determined by
LaSalle, by (b) gross invoiced sales of Borrower for such period.

         "EBITDA"  shall mean,  with  respect to any period,  net income  before
taxes for such  period  (excluding  any  before-tax  gains on the sale of assets
other  than the  sale of  inventory  in the  ordinary  course  of  business  and
excluding  other  pre-tax  extraordinary  gains)  plus  interest  expense,  plus
depreciation and amortization for such period, less Other Capitalized Expenses.

         "Eligible  Account"  shall mean an Account  owing to Borrower  which is
acceptable  to LaSalle in its sole  discretion  for  lending  purposes.  LaSalle
shall,  in general,  consider an Account to be an Eligible  Account if it meets,
and so long as it continues to meet, the following requirements:

                  (i) it is genuine  and in all  respects is what it purports to
         be;

                  (ii) it is owned by  Borrower  and  Borrower  has the right to
         subject it to a security interest in favor of LaSalle;

                                       3
<PAGE>

                  (iii)  it  arises  from (A) the  performance  of  services  by
         Borrower  and such  services  have been fully  performed  and have been
         acknowledged and accepted by the Account Debtor thereunder;  or (B) the
         sale of Goods by  Borrower,  and such  Goods  have  been  completed  in
         accordance  with  the  Account  Debtor's  specifications  (if  any) and
         delivered to and accepted by the Account  Debtor,  such Account  Debtor
         has not refused to accept and has not returned or offered to return any
         of the Goods,  and has not refused to accept any of the services  which
         are the subject of such Account, and Borrower has possession of, or has
         delivered  to LaSalle  at  LaSalle's  request,  shipping  and  delivery
         receipts evidencing delivery of such Goods;

                  (iv) it is  evidenced  by an invoice  rendered  to the Account
         Debtor thereunder, is due and payable within thirty (30) days after the
         stated invoice date thereof and does not remain unpaid more than ninety
         (90) days past the invoice date  thereof;  provided,  however,  that if
         more than  twenty-five  percent (25%) of the aggregate dollar amount of
         invoices  owing by a particular  Account  Debtor remain unpaid for more
         than ninety (90) days past the respective  invoice dates thereof,  then
         all Accounts  owing to Borrower by that Account  Debtor shall be deemed
         ineligible;

                  (v) it is not subject to any prior  assignment,  claim,  lien,
         security  interest  or  encumbrance  whatsoever,  other than  Permitted
         Liens;

                  (vi) it is a  valid,  legally  enforceable  and  unconditional
         obligation  of the  Account  Debtor  thereunder,  and is not subject to
         setoff,  counterclaim,  credit, allowance or adjustment by such Account
         Debtor,  or to any  claim  by such  Account  Debtor  denying  liability
         thereunder in whole or in part;

                  (vii) it does not arise out of a contract or order which fails
         in any material  respect to comply with the  requirements of applicable
         law;

                  (viii)  the  Account  Debtor  thereunder  is  not a  director,
         officer,  employee or agent of  Borrower,  or a  Subsidiary,  Parent or
         Affiliate of Borrower;

                  (ix) it is not an Account  with  respect to which the  Account
         Debtor is the United  States of America  or any  department,  agency or
         instrumentality  thereof,  unless Borrower assigns its right to payment
         of such Account to LaSalle  pursuant to, and in full  compliance  with,
         the Assignment of Claims Act of 1940, as amended,  or Borrower then has
         in effect in accordance with paragraph 10 hereof a lockbox satisfactory
         in all respects to LaSalle;

                  (x) it is not an Account  with  respect  to which the  Account
         Debtor is located in a state which requires Borrower, as a precondition
         to  commencing  or  maintaining  an action in the courts of that state,
         either to (A) receive a certificate  of authority to do business and be
         in good  standing  in such  state,  or (B)  file a

                                       4
<PAGE>

         notice of  business  activities  report  or  similar  report  with such
         state's  taxing  authority,  unless (x)  Borrower  has taken one of the
         actions described in clauses (A) or (B), (y) the failure to take one of
         the  actions  described  in  either  clause  (A)  or (B)  may be  cured
         retroactively by Borrower at its election,  or (z) Borrower has proven,
         to LaSalle's satisfaction, that it is exempt from any such requirements
         under any such state's laws;

                  (xi) it is an Account  which  arises out of a sale made in the
         ordinary course of Borrower's business;

                  (xii)  after  December  31,  1998,  the  Account  Debtor  is a
         resident or citizen  of, and is located  within,  the United  States of
         America or Canada or if the  Account  Debtor is not a  resident  of the
         United  States or Canada,  either (A) the Account  Debtor has  supplied
         Borrower with an  irrevocable  commercial  letter of credit issued by a
         financial  institution  and  in  form  and  substance  satisfactory  to
         LaSalle,  and, if so requested by LaSalle,  delivered to LaSalle or its
         agent in pledge for negotiation and presentment,  or (B) the Account is
         covered by credit insurance acceptable to LaSalle;

                  (xiii) it is not an Account  with respect to which the Account
         Debtor's  obligation to pay is  conditional  upon the Account  Debtor's
         approval  of the  Goods or  services  or is  otherwise  subject  to any
         repurchase  obligation  or  return  right,  as  with  sales  made  on a
         bill-and-hold,  guaranteed  sale,  sale on approval,  sale or return or
         consignment basis;

                  (xiv) it is not an  Account  (A)  with  respect  to which  any
         representation or warranty contained in this Agreement is untrue or (B)
         which  violates  any of the  covenants  of Borrower  contained  in this
         Agreement;

                  (xv) except to the extent otherwise  permitted with respect to
         Account  Debtors  listed in Exhibit A attached  hereto (as such exhibit
         may be amended from time to time by a writing signed by LaSalle), it is
         not an Account which, when added to a particular Account Debtor's other
         indebtedness  to Borrower,  exceeds the lesser of ten percent  (10%) of
         the  aggregate of Borrower's  Accounts or a credit limit  determined by
         LaSalle in its  reasonable  credit  judgment for that  Account  Debtor,
         provided, however, that Accounts excluded from Eligible Accounts solely
         by reason of this paragraph  1(a)(xv) shall be Eligible Accounts to the
         extent of such credit limit; and

                  (xvi) it is not an Account  with respect to which the prospect
         of payment or performance by the Account Debtor is or will be impaired,
         as determined by LaSalle in its sole discretion.

         "Eligible   Inventory"  shall  mean  Inventory  of  Borrower  which  is
acceptable  to  LaSalle  in its  sole  discretion.  Without  limiting  LaSalle's
discretion,  LaSalle  shall,  in  general, 

                                       5
<PAGE>

consider  Inventory  to be  Eligible  Inventory  if it meets,  and so long as it
continues to meet, the following requirements:

                  (i) it is owned by  Borrower  and  Borrower  has the  right to
         subject it to a security interest in favor of LaSalle;

                  (ii) it is not in transit  and it is  located on the  premises
         listed in Section A on Exhibit B and if any such  premises  are leased,
         LaSalle has received a landlord's  waiver with respect to such premises
         satisfactory to LaSalle;

                  (iii) it is not subject to any prior assignment,  claim, lien,
         security  interest  or  encumbrance  whatsoever,  other than  Permitted
         Liens;

                  (iv) It is not raw materials,  component parts,  service/spare
         parts,  supplies or work in process;  it is either  finished goods held
         for immediate  sale (subject only to brief,  final testing) or finished
         goods  which  are  otherwise  ready  for  sale  but are  being  used by
         Borrower's  employees at Borrower's  business  premises for purposes of
         software  development,  service  or similar  purposes  for a period not
         exceeding  three months  ("Rotational  Inventory");  it is not used for
         demonstration or other marketing  purposes;  it is not obsolete;  it is
         (except  for  Rotational  Inventory  as  provided  above and  except as
         LaSalle may  otherwise  consent in writing)  new and unused;  and it is
         free from defects which would, in LaSalle's sole determination,  affect
         its market value;

                  (v) it is not stored with a bailee,  consignee,  warehouseman,
         processor or similar  party unless such party is listed in Section B on
         Exhibit  B (as  such  exhibit  may be  amended  from  time to time by a
         writing  signed by LaSalle)  and  Borrower  has caused any such bailee,
         consignee,  warehouseman,  processor  or  similar  party to  issue  and
         deliver to LaSalle, in form and substance  acceptable to LaSalle,  such
         UCC  financing  statements,   warehouse  receipts,  waivers  and  other
         documents as LaSalle shall require;

                  (vi)  LaSalle has  determined  in  accordance  with  LaSalle's
         customary  business  practices that it is not  unacceptable due to age,
         type, category or quantity; and

                  (vii) it is not Inventory (A) with respect to which any of the
         representations  and warranties  contained in this Agreement are untrue
         or (B) which  violates any of the  covenants  of Borrower  contained in
         this Agreement.

Eligible Inventory may change after LaSalle receives the Appraisal.

         "Environmental Laws" shall mean all applicable foreign,  Federal, State
and local laws (including  common law),  legislation,  rules,  codes,  licenses,
permits (including any conditions imposed therein), authorizations,  judicial or
administrative  decisions,  injunctions or 

                                       6
<PAGE>

agreements  between  Borrower and any  governmental  authority,  (a) relating to
pollution and the  protection,  preservation  or restoration of the  environment
(including  air,  water vapor,  surface  water,  ground water,  drinking  water,
drinking water supply,  surface land,  subsurface land, plant and animal life or
any other natural  resource),  or to human health or safety (including under the
Occupational  Health and Safety  Act),  (b)  relating to the exposure to, or the
use,  storage,  recycling,  treatment,  generation,   manufacture,   processing,
distribution,   transportation,   handling,  labeling,  production,  release  or
disposal, or threatened release, of Hazardous Materials,  or (c) relating to all
laws with  regard to record  keeping,  notification,  disclosure  and  reporting
requirements  respecting  Hazardous  Materials.  The term  "Environmental  Laws"
includes (i) the Federal Comprehensive Environmental Response,  Compensation and
Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act,
the Federal Water  Pollution  Control Act of 1972,  the Federal Clean Water Act,
the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments  thereto),  the Federal
Solid Waste  Disposal  Act and the Federal  Toxic  Substances  Control  Act, the
Federal  Insecticide,  Fungicide  and  Rodenticide  Act,  and the  Federal  Safe
Drinking Water Act of 1974, (ii) applicable state counterparts to such laws, and
(iii)  any  common  law or  equitable  doctrine  that may  impose  liability  or
obligations  for injuries or damages due to, or  threatened  as a result of, the
presence of or exposure to any Hazardous Materials.

         "Event of Default"  shall have the meaning  specified  in  paragraph 16
hereof.

         "Excess  Availability"  means the excess,  if any, of (x) the Borrowing
Base over (y) the total outstanding Revolving Loans. For purposes of calculating
Borrower's  Excess  Availability  and the amount of the Borrowing  Base relating
thereto,  all of Borrower's trade payables and outstanding  debt, other than the
Liabilities  hereunder,  which remain unpaid 30 days or more after the due dates
thereof  shall,  on the date of the  determination  of Excess  Availability,  be
deemed to have been paid by Borrower from proceeds of a Revolving Loan.

         "Exhibit B" shall mean the exhibit  entitled  "Exhibit B - Business and
Collateral Locations" which is attached hereto and made a part hereof.

         "Fiscal  Year"  shall mean with  respect to  Borrower,  the twelve (12)
month accounting period of Borrower  commencing  January 1 of each calendar year
and ending December 31 of such calendar year.

         "GAAP" shall mean generally accepted accounting principles and policies
in the United States as in effect from time to time.

         "Hazardous  Materials"  shall mean any  hazardous,  toxic or  dangerous
substances,  materials and wastes,  including hydrocarbons  (including naturally
occurring  or  man-made  petroleum  and  hydrocarbons),   flammable  explosives,
asbestos,  urea  formaldehyde  insulation,   radioactive  materials,  biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or  contaminants  (including  materials  which include
hazardous  constituents),  sewage, sludge,  industrial slag, solvents and/or any
other  similar  substances,   materials,  or  wastes  and  including  any  other
substances,  materials or wastes 

                                       7
<PAGE>

that are or become subject to regulation under any  Environmental Law (including
any that are or become  classified as hazardous or toxic under any Environmental
Law).

         "Indemnified  Party"  shall have the meaning  specified in paragraph 18
hereof.

         "Interest  Coverage Ratio" shall mean, with respect to any period,  the
ratio of (i) EBITDA, to (ii) interest expense for such period.

         "Inventory  Advance  Rate"  shall  mean (a) with  respect  to  Eligible
Inventory  which is not  Rotational  Inventory,  the lesser of (i) forty percent
(40%) or (ii)  eighty-five  percent (85%) of the net  liquidation  value of such
Inventory  as  determined  by the  Appraisal  and (b) with  respect to  Eligible
Inventory which is Rotational  Inventory,  the lesser of (i) thirty-five percent
(35%) or (ii)  eighty-five  percent (85%) of the net  liquidation  value of such
Inventory as determined by the Appraisal.

         "Letters of Credit" shall mean those documentary or stand-by letters of
credit issued for Borrower's account in accordance with the terms of paragraph 4
hereof.

         "Letter  of  Credit   Obligations"  shall  mean,  as  of  any  date  of
determination,  the sum of (i) the aggregate  undrawn face amount of all Letters
of Credit and (ii) the  aggregate  unreimbursed  amount of all drawn  Letters of
Credit not already converted to a Loan hereunder.

         "Liabilities"  shall  mean  any and all  obligations,  liabilities  and
indebtedness of Borrower to LaSalle or to any parent, affiliate or subsidiary of
LaSalle  of any and  every  kind  and  nature,  howsoever  created,  arising  or
evidenced  and  howsoever  owned,  held or  acquired,  whether now or  hereafter
existing, whether now due or to become due, whether primary, secondary,  direct,
indirect,  absolute,  contingent or otherwise  (including,  without  limitation,
obligations of performance),  whether several,  joint or joint and several,  and
whether  arising or existing  under written or oral agreement or by operation of
law.

         "Loan"  or  "Loans"  shall  mean any and all  Revolving  Loans  made by
LaSalle to Borrower pursuant to paragraph 2 hereof and all other loans, advances
and  financial  accommodations  made by  LaSalle  to or on  behalf  of  Borrower
hereunder.

         "Lock Box" and "Blocked  Account" shall have the meanings  specified in
paragraph 10 hereof.

         "Material  Adverse  Effect" shall mean with respect to any event,  act,
condition or occurrence  of whatever  nature  (including  but not limited to any
adverse   determination   in  any   litigation,   arbitration  or   governmental
investigation  or proceeding),  whether singly or in conjunction  with any other
event  or  events,  act  or  acts,   condition  or  conditions,   occurrence  or
occurrences, whether or not related, a material adverse change in, or a material
adverse  effect  upon,  any  of  the  business,  property,  assets,  operations,
condition (financial or otherwise) or prospects of Borrower.

                                       8
<PAGE>

         "Note" shall mean the Revolving Note.

         "Obligor"  shall mean  Borrower  and each Person who is or shall become
primarily or secondarily liable for any of the Liabilities;  provided,  however,
that such term shall not include any Account Debtor.

         "Original  Term"  shall have the  meaning  specified  in  paragraph  12
hereof.

         "Other Agreements" shall mean all agreements, instruments and documents
including,  without limitation,  guaranties,  mortgages,  trust deeds,  pledges,
powers  of  attorney,  consents,   assignments,   contracts,  notices,  security
agreements,  leases, financing statements and all other writings heretofore, now
or from time to time hereafter executed by or on behalf of Borrower or any other
Person and  delivered to LaSalle or to any parent,  affiliate or  subsidiary  of
LaSalle in connection  with the  Liabilities  or the  transactions  contemplated
hereby.

         "Other  Capitalized  Expenses"  shall mean, with respect to any period,
the  aggregate  of  all  expenditures  (whether  paid  in  cash  or  accrued  as
liabilities)  by Borrower which are  capitalized as assets by Borrower and which
are  not  included  within  the  definition  of  Capital  Expenditures  in  this
Agreement.

         "Parent"  shall mean any  Person now or at any time or times  hereafter
owning or  controlling  (alone or with any other  Person) at least a majority of
the  issued  and  outstanding  stock or other  similar  ownership  interests  of
Borrower or any Subsidiary.

         "Permitted   Liens"  shall  mean  (i)  statutory  liens  of  landlords,
carriers,  warehousemen,  mechanics,  materialmen  or suppliers  incurred in the
ordinary  course of business and securing  amounts not yet due or declared to be
due by the  claimant  thereunder,  (ii) liens or security  interests in favor of
LaSalle,  (iii) zoning  restrictions  and  easements,  rights of way,  licenses,
covenants and other restrictions  affecting the use of real property that do not
individually  or in the aggregate  have a Material  Adverse Effect on Borrower's
ability to use such real property for its intended  purpose in  connection  with
Borrower's  business,  (iv)  liens  securing  the  payment  of  taxes  or  other
governmental  charges not yet delinquent or being contested in good faith and by
appropriate  proceedings,  (v) liens  incurred or deposits  made in the ordinary
course of Borrower's  business in connection with capitalized leases or purchase
money  security  interests  for  purchase of, and  applying  only to,  Equipment
included  in the  permitted  borrowings  under  paragraphs  13(q)  or  14(i)  or
permitted as Capital Expenditures under paragraph 14(n), such capitalized leases
and purchase  money security  interests to apply only to the specific  Equipment
which is  purchased  or leased,  the amount  secured  thereby  not to exceed the
purchase price for such equipment,  and the documents  relating to such liens to
be in form and substance acceptable to LaSalle, (vi) liens securing indebtedness
owing by any Subsidiary to Borrower to the extent such indebtedness is permitted
under paragraph 14(i), or to any other Subsidiary of Borrower, (vii) deposits to
secure  performance of bids, trade contracts,  leases and statutory  obligations
(to the  extent  not  excepted  elsewhere  herein);  (viii)  liens  specifically
permitted by LaSalle in writing as set forth on Exhibit C attached hereto;  (ix)
any lien arising out of the refinancing,  extension, renewal or refunding of any
indebtedness secured by any lien permitted by any of the foregoing 


                                       9
<PAGE>

subparagraphs (i) through (viii) inclusive; provided, that (a) such indebtedness
is not secured by any additional assets, and (b) the amount of such indebtedness
is  not  increased,   (x)  pledges  or  deposits  in  connection  with  worker's
compensation, unemployment insurance and other social security legislation, (xi)
securities  and other  properties  held at banks or  financial  institutions  to
secure the  payment  or  reimbursement  under  overdraft,  acceptance  and other
facilities,  and (xii) rights of setoff,  banker's lien and other similar rights
arising solely by operation of law.

         "Person" shall mean any individual,  sole proprietorship,  partnership,
limited  liability  company,   venture,  trust,   unincorporated   organization,
association, corporation, institution, entity, party or foreign or United States
government  (whether  federal,  state,  county,  city,  municipal or otherwise),
including,  without limitation,  any instrumentality,  division, agency, body or
department thereof.

         "Prime  Rate" shall mean the publicly  announced  prime rate of LaSalle
National Bank, Chicago, Illinois, in effect from time to time. The Prime Rate is
not intended to be the lowest or most favorable rate of LaSalle National Bank in
effect at any time.

         "Renewal Term" shall have the meaning specified in paragraph 12 hereof.

         "Revolving  Loans"  shall have the  meaning  specified  in  paragraph 2
hereof.

         "Revolving Loan Facility" shall mean the sum of $7,500,000.

         "Revolving  Note"  shall  mean  the  promissory  note  in the  original
principal  amount of  $7,500,000,  executed by Borrower to the order of LaSalle,
dated as of the Closing Date.

         "Subsidiary"  shall  mean any  corporation  of which  more  than  fifty
percent (50%) of the  outstanding  capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation  (irrespective of
whether at the time stock of any other class of such  corporation  shall have or
might have voting power by reason of the happening of any contingency) is at the
time,  directly or indirectly,  owned by Borrower or by any partnership or joint
venture  of which  more  than  fifty  percent  (50%) of the  outstanding  equity
interests are at the time, directly or indirectly, owned by Borrower.

         "Tangible  Net  Worth"  shall  mean  shareholders'   equity  (including
retained earnings) less the book value of all intangible  assets,  determined by
LaSalle on a consistent basis.

         (b)  Accounting  Terms and  Definitions.  Unless  otherwise  defined or
specified herein, all accounting terms used in this Agreement shall be construed
in accordance with GAAP,  applied on a basis consistent in all material respects
with the audited  financial  statements  delivered  by Borrower to LaSalle on or
before  the  Closing  Date.  All  accounting   determinations  for  purposes  of
determining  compliance  with the  covenants  contained in paragraph 14 shall be
made in  accordance  with GAAP as in effect on the Closing Date and applied on a
basis consistent in all material respects with the audited financial  statements
delivered to LaSalle by Borrower on or before the Closing  Date.  The  financial
statements  required to be delivered


                                       10
<PAGE>

hereunder from and after the Closing Date, and all financial  records,  shall be
maintained  in  accordance  with GAAP.  LaSalle  agrees that  interim  financial
statements will not include footnotes or a statement of cash flow.

     2. REVOLVING  LOANS.  Subject to the terms and conditions of this Agreement
and the Other Agreements, during the Original Term and any Renewal Term:

         (a) LaSalle  will make  revolving  loans and advances  (the  "Revolving
Loans")  to  Borrower  from time to time  based  upon  Borrower's  requests,  in
accordance  with the  terms of  paragraph  2(b)  hereof.  The  aggregate  unpaid
principal  amount of all  Revolving  Loans  outstanding  at any one time made to
Borrower  shall not  exceed  the  lesser of (i) the  Borrowing  Base or (ii) the
Revolving Loan Facility less the outstanding Letter of Credit  Obligations.  All
Revolving Loans shall be repaid in full upon the earlier to occur of (A) the end
of the Original Term or any Renewal Term, if either  LaSalle or Borrower  elects
to  terminate  this  Agreement  as of the  end of any  such  term,  and  (B) the
acceleration of the Liabilities  pursuant to paragraph 17 of this Agreement.  If
at any time the  outstanding  principal  balance of the Revolving  Loans made to
Borrower exceeds (i) the Borrowing Base or (ii) the Revolving Loan Facility less
the outstanding Letter of Credit  Obligations,  Borrower shall immediately,  and
without the necessity of a demand by LaSalle,  pay to LaSalle such amount as may
be  necessary to eliminate  such  excess,  and LaSalle  shall apply such payment
against the outstanding  principal  balance of the Revolving Loans. In addition,
if at any time the sum of (A) the outstanding principal balance of the Revolving
Loans and (B) the outstanding Letter of Credit Obligations exceeds the Revolving
Credit  Facility,  Borrower  shall  immediately  and without the  necessity of a
demand by LaSalle pay to LaSalle  such amount as may be  necessary  to eliminate
such  excess,  and LaSalle  shall  apply such  payment  against the  outstanding
principal  balance of the Loans in such order as LaSalle shall  determine in its
sole discretion.  Borrower hereby authorizes LaSalle to charge any of Borrower's
accounts  to make any  payments of  principal,  interest,  fees or  reimbursable
expenses  required by this  Agreement.  All Revolving  Loans shall, in LaSalle's
sole  discretion,  be  evidenced  by one or more  promissory  notes  in form and
substance  satisfactory to LaSalle.  However, if such Revolving Loans are not so
evidenced,  such  Revolving  Loans may be  evidenced  solely by entries upon the
books and records maintained by LaSalle.

         (b) LaSalle agrees to make Revolving Loans to Borrower up to the lesser
of the following  amounts,  the amount  calculated  pursuant to subparagraph (i)
below being the "Borrowing Base":

                  (i) an amount equal to the sum of:

                           (A) the  applicable  A/R Advance  Rate applied to the
                  face amount of Eligible Accounts plus,

                           (B) the lesser of three million five hundred thousand
                  dollars ($3,500,000) or the sum of

                                       11
<PAGE>

                                   (x) the Inventory Advance Rate applied to the
                                   value  of  Eligible   Inventory   other  than
                                   Rotational Inventory, calculated on the lower
                                   of  cost  or  market  value  on  a  first-in,
                                   first-out basis; plus

                                   (y) the lesser of (1) the  Inventory  Advance
                                   Rate   for   Eligible   Inventory   which  is
                                   Rotational  Inventory applied to the value of
                                   such Rotational Inventory,  calculated on the
                                   lower of cost or market  value on a first-in,
                                   first-out  basis or (2) one  million  dollars
                                   ($1,000,000), less

                           (C) the amount of all  Letter of Credit  Obligations,
                  less

                           (D) such  reserves as LaSalle in its sole  discretion
                  may from time to time establish in  determining  the Borrowing
                  Base to reflect  events,  conditions,  contingencies  or risks
                  which  may  affect  the  Collateral,  the  business,  business
                  prospects  or financial  condition  of Borrower,  the security
                  interests of LaSalle, or the security of the Loans,  including
                  but not limited to a five hundred  thousand dollar  ($500,000)
                  reserve  to be  maintained  until  LaSalle  has  received  and
                  approved the Appraisal and the Inventory Advance Rate has been
                  adjusted in LaSalle's  reasonable credit judgment based on the
                  Appraisal, or

                  (ii) the  Revolving  Loan  Facility,  less the  amount  of all
Letter of Credit Obligations.

     3. [INTENTIONALLY OMITTED.]

     4.  LETTERS  OF  CREDIT.  Subject  to the  terms  and  conditions  of  this
Agreement,  and the Other  Agreements,  during the Original  Term or any Renewal
Term,  LaSalle  may,  at its  discretion,  absent the  existence  of an Event of
Default,  from  time to  time  cause  the  issuance  of and  co-sign  for,  upon
Borrower's  request,  Letters of Credit;  provided,  that the  Letters of Credit
shall be in form and substance  acceptable to LaSalle in its sole discretion and
that the aggregate undrawn face amount of all such Letters of Credit shall at no
time exceed Five Hundred Thousand Dollars ($500,000); and provided further, that
no Letter of Credit  shall  have an expiry  date (a) more than 365 days from the
date of  issuance  or (b) beyond  five (5) days prior to the  expiration  of the
Original Term or the Renewal Term, as the case may be. Borrower's  reimbursement
obligation  in respect  of the  Letters of Credit  shall  automatically  reduce,
dollar for dollar, the amount which Borrower may borrow based upon the Revolving
Loan Facility and the Borrowing  Base. Any payment made by LaSalle to any Person
on account of any Letter of Credit shall  constitute a Revolving Loan hereunder.
At no time  shall the  aggregate  sum of direct  Revolving  Loans by  LaSalle to
Borrower  plus the Letter of Credit  Obligations  be in excess of the  Revolving
Loan Facility or the Borrowing Base.

                                       12
<PAGE>

     5. INTEREST, FEES AND CHARGES.

         (a) Rates of  Interest.  Interest  accrued on all Loans shall be due on
the earliest of: (i) the first day of each month (for the immediately  preceding
month),  computed  through the last  calendar day of the preceding  month;  (ii)
LaSalle's  election to accelerate the maturity and payment of the Liabilities in
accordance  with  paragraph 17 hereof;  or (iii)  termination  of this Agreement
pursuant to paragraph 12 hereof.  Interest shall accrue on the principal  amount
of the Revolving Loans made to Borrower  outstanding at the end of each day at a
fluctuating  rate per annum equal to one and  one-quarter  percent (1.25%) above
the Prime Rate. The rate of interest payable on Loans shall increase or decrease
by an amount equal to any  increase or decrease in the Prime Rate,  effective as
of the  opening of  business  on the day that any such  change in the Prime Rate
occurs.  Upon and after the  occurrence  of an Event of Default,  and during the
continuation  thereof,  the principal amount of all Loans shall bear interest on
demand at a rate per annum  equal to the rate of interest  then in effect  under
this paragraph 5(a) plus two percent (2%).

         (b) Computation of Interest and Fees.  Interest and collection  charges
hereunder  shall be calculated  daily and shall be computed on the actual number
of days elapsed over a year  consisting  of three  hundred and sixty (360) days.
For the purpose of computing interest  hereunder,  all items of payment received
by LaSalle  shall be deemed  applied  by  LaSalle on account of the  Liabilities
(subject to final payment of such items) on the first Business Day after receipt
by LaSalle of good funds in LaSalle's account located in Chicago, Illinois.

         (c) Maximum Interest.  It is the intent of the parties that the rate of
interest and the other charges to Borrower under this Agreement shall be lawful;
therefore,  if for any reason the interest or other  charges  payable under this
Agreement  are  found  by  a  court  of  competent  jurisdiction,   in  a  final
determination,  to exceed the limit which LaSalle may lawfully charge  Borrower,
then the  obligation to pay interest and other charges  shall  automatically  be
reduced to such limit and, if any amount in excess of such limit shall have been
paid, then such amount shall be refunded to Borrower.

         (d) Letter of Credit Fees.  Borrower shall remit to LaSalle a Letter of
Credit fee equal to two percent  (2.0%) per annum on the aggregate  undrawn face
amount of all outstanding  Letters of Credit issued for the account of Borrower,
which fee shall be  payable  monthly in  arrears  on each day that  interest  is
payable  hereunder.  Borrower  shall also pay on demand the normal and customary
administrative  charges  for  issuance,  amendment,   negotiation,   renewal  or
extension  of any Letter of Credit  imposed by the bank  issuing  such Letter of
Credit.  Upon the occurrence and during the  continuance of an Event of Default,
all  Letter of Credit  fees  shall be  payable on demand at a rate equal to four
percent (4.0%) per annum on the aggregate undrawn face amount thereof.

         (e) Facility Fee. Borrower shall pay to LaSalle a facility fee equal to
seventy-five   thousand  dollars  ($75,000)  ,  which  shall  be  fully  earned,
nonrefundable and due on the Closing Date.

                                       13
<PAGE>

         (f) Unused Line Fee.  Borrower shall pay to Lender monthly,  in arrears
on the  first  day of  each  month,  an  unused  line  fee  at a rate  equal  to
three-eighths of one percent (.375%) per annum calculated upon the daily average
amount  by  which  the  Revolving  Loan  Facility  exceeds  the  sum of (i)  the
outstanding  principal  balance of the Revolving Loans plus (ii) the outstanding
Letter of Credit Obligations.  The Unused Line Fee shall accrue from the Closing
Date until the last day of the Original Term, and if applicable,  from the first
day to the last day of each Renewal Term.

         (g) Examination  Fees. In addition to the costs and expenses  described
in paragraph  14(o) below,  Borrower shall pay to LaSalle an examination  fee of
$600 per auditor per day, plus reasonable costs and expenses  (including but not
limited to  airfare,  lodging,  transportation  and meals) for each  examination
performed  by or at  LaSalle's  direction  of  Borrower's  books and records and
Collateral  and such  other  matters as LaSalle  shall deem  appropriate  in its
commercially reasonable judgment, such fees to be paid upon demand by LaSalle.

         (h) Capital Adequacy Charge.  If LaSalle shall have determined that the
adoption of any law,  rule or  regulation  regarding  capital  adequacy,  or any
change therein or in the interpretation or application thereof, or compliance by
LaSalle with any request or directive regarding capital adequacy (whether or not
having the force of law) from any central bank or governmental authority enacted
after the Closing  Date,  does or shall have the effect of reducing  the rate of
return on LaSalle's  capital as a consequence of its obligations  hereunder to a
level below that which LaSalle could have achieved but for such adoption, change
or  compliance  (taking into  consideration  LaSalle's  policies with respect to
capital adequacy) by a material amount, then from time to time, after submission
by LaSalle to Borrower of a written demand therefor  ("Capital Adequacy Demand")
together with the  certificate  described  below,  Borrower shall pay to LaSalle
such additional amount or amounts ("Capital Adequacy Charge") as will compensate
LaSalle  for such  reduction,  such  Capital  Adequacy  Demand  to be made  with
reasonable  promptness  following such  determination.  A certificate of LaSalle
claiming  entitlement  to payment as set forth above shall be  conclusive in the
absence of manifest error.  Such  certificate  shall set forth the nature of the
occurrence  giving rise to such  reduction,  the amount of the Capital  Adequacy
Charge  to be  paid  to  LaSalle,  and the  method  by  which  such  amount  was
determined. In determining such amount, LaSalle may use any reasonable averaging
and attribution method, applied on a non-discriminatory basis.

     6. LOAN ADMINISTRATION.

         (a) Loan  Requests.  A request  for a  Revolving  Loan shall be made or
shall be deemed to be made,  each in the following  manner:  (i) Borrower  shall
give LaSalle same day notice,  no later than 10:30 A.M.  (Portland time) of such
day, of its intention to borrow a Revolving Loan, in which notice Borrower shall
specify the amount of the proposed  borrowing and the proposed  borrowing  date;
provided,  however, that no such request may be made at a time when there exists
a Default or an Event of Default; and (ii) the coming due of any amount required
to be paid under this  Agreement or any Note,  whether on account of interest or
for any other  Liability,  shall be  deemed  irrevocably  to be a request  for a
Revolving  Loan on the due  date  

                                       14
<PAGE>

thereof in the amount  required to pay such interest or other  Liability.  As an
accommodation to Borrower,  LaSalle may permit telephone  requests for Revolving
Loans and electronic transmittal of instructions,  authorizations, agreements or
reports to LaSalle by Borrower.  Unless Borrower specifically directs LaSalle in
writing not to accept or act upon telephonic or electronic  communications  from
Borrower,  LaSalle  shall have no  liability  to Borrower for any loss or damage
suffered  by  Borrower  as a  result  of  LaSalle's  honoring  of any  requests,
execution of any  instructions,  authorizations or agreements or reliance on any
reports  communicated to it telephonically  or electronically  and purporting to
have been sent to LaSalle by Borrower  and LaSalle  shall have no duty to verify
the origin of any such  communication or the authority of the Person sending it.
Each notice of borrowing shall be irrevocable by and binding on Borrower.

         (b) Disbursement.  Borrower hereby  irrevocably  authorizes  LaSalle to
disburse the proceeds of each Revolving Loan requested by Borrower, or deemed to
be requested by Borrower,  as follows:  (i) the proceeds of each  Revolving Loan
requested under paragraph  6(a)(i) shall be disbursed by LaSalle in lawful money
of the United States of America in immediately  available  funds, in the case of
the initial borrowing,  in accordance with the terms of the written disbursement
letter from  Borrower,  and in the case of each  subsequent  borrowing,  by wire
transfer to such bank account as may be agreed upon by Borrower and LaSalle from
time to time, or elsewhere if pursuant to a written direction from Borrower; and
(ii) the proceeds of each  Revolving  Loan requested  under  paragraph  6(a)(ii)
shall be disbursed by LaSalle by way of direct payment of the relevant  interest
or other Liability.

     7. GRANT OF SECURITY  INTEREST TO LASALLE.  As security  for the payment of
all Loans now or in the future made by LaSalle to Borrower hereunder and for the
payment or other satisfaction of all other Liabilities,  Borrower hereby assigns
to LaSalle and grants to LaSalle a continuing security interest in the following
property of Borrower,  whether now or  hereafter  owned,  existing,  acquired or
arising and wherever now or hereafter located:  (a) all Accounts (whether or not
Eligible  Accounts)  and all Goods whose  sale,  lease or other  disposition  by
Borrower has given rise to Accounts and have been returned to or  repossessed or
stopped in transit by Borrower;  (b) all Chattel Paper,  Instruments,  Documents
and General  Intangibles  (including,  without limitation,  all patents,  patent
applications,  trademarks,  trademark applications,  trade names, trade secrets,
goodwill, copyrights,  registrations,  licenses, franchises, customer lists, tax
refund claims, claims against carriers and shippers, guarantee claims, contracts
rights,   security   interests,    security   deposits   and   any   rights   to
indemnification);  (c) all  Inventory;  (d) all  Goods  (other  than  Inventory)
including, without limitation, Equipment, vehicles and fixtures; (e) all Deposit
Accounts;  (f) all Investment Property;  (g) all deposits and cash and any other
property of Borrower now or hereafter in the  possession,  custody or control of
LaSalle or any agent or any parent,  affiliate or  subsidiary  of LaSalle or any
participant  with LaSalle in the Loans for any purpose (whether for safekeeping,
deposit,  collection,  custody, pledge,  transmission or otherwise); and (h) all
additions and accessions to,  substitutions for, and replacements,  products and
proceeds of the foregoing property,  including, without limitation,  proceeds of
all insurance  policies insuring the foregoing  property,  and all of Borrower's
books and records relating to any of the foregoing and to Borrower's business.


                                       15
<PAGE>

     8. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS THEREIN.
Borrower shall, at LaSalle's request, at any time and from time to time, execute
and deliver to LaSalle such financing statements, documents and other agreements
and instruments  (and pay the cost of filing or recording the same in all public
offices deemed  reasonably  necessary or desirable by LaSalle) and do such other
acts and things as LaSalle may deem necessary or desirable in order to establish
and maintain a valid, attached and perfected security interest in the Collateral
in favor of  LaSalle  (free and clear of all other  liens,  claims and rights of
third parties whatsoever,  whether voluntarily or involuntarily created,  except
Permitted  Liens)  to  secure  payment  of  the  Liabilities,  and in  order  to
facilitate the collection of the Collateral.  Borrower irrevocably hereby makes,
constitutes and appoints LaSalle (and all Persons designated by LaSalle for that
purpose) as Borrower's  true and lawful  attorney and  agent-in-fact  to execute
such financing statements, documents and other agreements and instruments and do
such other acts and things as may be necessary to preserve and perfect LaSalle's
security  interest in the  Collateral.  Borrower  further  agrees that a carbon,
photographic,  photostatic  or  other  reproduction  of this  Agreement  or of a
financing statement shall be sufficient as a financing statement.

     9. POSSESSION OF COLLATERAL AND RELATED MATTERS.  Until an Event of Default
has occurred,  Borrower  shall have the right,  except as otherwise  provided in
this  Agreement,  in the ordinary  course of Borrower's  business,  to (a) sell,
lease or furnish under contracts of service any of Borrower's Inventory normally
held by  Borrower  for any  such  purpose,  and  (b)  use  and  consume  any raw
materials, work in process or other materials normally held by Borrower for such
purpose; provided, however, that a sale in the ordinary course of business shall
not include any transfer or sale in satisfaction, partial or complete, of a debt
owed by Borrower.

     10. COLLECTIONS.

         (a) Borrower  shall, at LaSalle's  election,  direct all of its Account
Debtors to make all  payments  on the  Accounts  directly  to a post  office box
("Lock  Box") with a financial  institution  acceptable  to, and in the name and
under  exclusive  control  of,  LaSalle.  Borrower  shall  establish  an account
("Blocked  Account")  in  LaSalle's  name for the  benefit  of  Borrower  with a
financial institution acceptable to LaSalle, into which all payments received in
the Lock Box  shall be  deposited,  and into  which  Borrower  will  immediately
deposit all payments made for Inventory or services sold or rendered by Borrower
and received by Borrower in the identical form in which such payments were made,
whether by cash or check. If Borrower,  any Affiliate or Subsidiary of Borrower,
or any  shareholder,  officer,  director,  employee  or agent of Borrower or any
Affiliate  or  Subsidiary,  or any other  Person  acting for or in concert  with
Borrower,  shall receive any monies,  checks,  notes,  drafts or other  payments
relating to or as proceeds of Accounts or other  Collateral,  Borrower  and each
such  Person  shall  receive  all such items in trust  for,  and as the sole and
exclusive  property of, LaSalle and,  immediately  upon receipt  thereof,  shall
remit  the  same  (or  cause  the same to be  remitted)  in kind to the  Blocked
Account.  Each financial  institution  with which a Lock Box and Blocked Account
are  established  shall  acknowledge  and  agree,  in a manner  satisfactory  to
LaSalle,  that the amounts on deposit in such Lock Box and  Blocked  Account are
the sole and exclusive property of LaSalle,  that such

                                       16
<PAGE>

financial  institution  has no right to setoff  against such Lock Box or Blocked
Account or against any other account  maintained by such  financial  institution
into which the contents of such Blocked Account are  transferred,  and that such
financial institution shall wire, or otherwise transfer in immediately available
funds in a manner  satisfactory  to  LaSalle,  funds  deposited  in the  Blocked
Account on a daily basis as such funds are collected.  Borrower  agrees that all
payments  made to the Blocked  Account  established  by  Borrower  or  otherwise
received  by  LaSalle,  whether in respect of the  Accounts  of  Borrower  or as
proceeds  of other  Collateral  of  Borrower  or  otherwise,  will be applied on
account of the  Liabilities  of  Borrower in  accordance  with the terms of this
Agreement. Borrower agrees to pay all fees, costs and expenses which Borrower or
LaSalle incurs in connection with opening and maintaining a Lock Box and Blocked
Account.  All of such fees,  costs and expenses  which remain unpaid by Borrower
pursuant to any Lock Box or Blocked  Account  Agreement  with  Borrower,  to the
extent  same  shall  have  been  paid by  LaSalle  hereunder,  shall  constitute
Revolving Loans hereunder,  shall be payable to LaSalle by Borrower upon demand,
and,  until paid,  shall bear  interest at the highest rate then  applicable  to
Revolving Loans hereunder.  All checks,  drafts,  instruments and other items of
payment or proceeds of Collateral delivered to LaSalle in kind shall be endorsed
by Borrower to LaSalle,  and, if  endorsement of any such item shall not be made
for any reason,  LaSalle is hereby irrevocably authorized to endorse the same on
Borrower's  behalf.  For the  purpose of this  paragraph,  Borrower  irrevocably
hereby makes,  constitutes and appoints  LaSalle (and all Persons  designated by
LaSalle  for  that  purpose)  as  Borrower's   true  and  lawful   attorney  and
agent-in-fact  (i) to endorse  Borrower's name upon said items of payment and/or
proceeds  of  Collateral  of  Borrower  and upon any  Chattel  Paper,  document,
instrument,  invoice or similar document or agreement relating to any Account of
Borrower or goods pertaining thereto;  (ii) to take control in any manner of any
item of payment or  proceeds  thereof;  (iii) to have  access to any lock box or
postal box into which any of Borrower's mail is deposited;  and (iv) to open and
process all mail addressed to Borrower and deposited therein; provided, however,
that LaSalle shall not exercise any such powers described in subparagraphs  (i),
(ii) (except for routine Lock Box  payments/proceeds)  and (iv) unless and until
an Event of Default has occurred.

         (b) LaSalle may, at any time and from time to time after the occurrence
of an Event of  Default,  whether  before or after  notification  to any Account
Debtor and whether before or after the maturity of any of the  Liabilities,  (i)
enforce  collection of any of Borrower's  Accounts or contract rights by suit or
otherwise;  (ii) exercise all of Borrower's  rights and remedies with respect to
proceedings  brought  to  collect  any  Accounts;  (iii)  surrender,  release or
exchange all or any part of any Accounts of Borrower, or compromise or extend or
renew for any  period  (whether  or not longer  than the  original  period)  any
indebtedness  thereunder;  (iv) sell or assign any Account of Borrower upon such
terms, for such amount and at such time or times as LaSalle deems advisable; (v)
prepare,  file and sign  Borrower's  name on any proof of claim in bankruptcy or
other  similar  document  against any Account  Debtor  indebted on an Account of
Borrower;  and (vi) do all  other  acts  and  things  which  are  necessary,  in
LaSalle's  sole  discretion,   to  fulfill  Borrower's  obligations  under  this
Agreement  and to allow LaSalle to collect the  Accounts.  LaSalle,  through its
officers,  employees or agents,  shall have the right, at any time and from time
to time in LaSalle's  name, in the name of a nominee of LaSalle or in Borrower's
name,  to verify the  validity,  amount or any other  matter  relating to any of
Borrower's Accounts, by mail, telephone,  telegraph or otherwise. Borrower shall
reimburse  LaSalle,  on demand,  for all  


                                       17
<PAGE>

reasonable costs, fees and expenses incurred by LaSalle in this regard after the
occurrence and during the  continuation of any Event of Default.  In addition to
any other provision  hereof,  LaSalle may at any time on or after the occurrence
of an Event of Default, at Borrower's  expense,  notify any parties obligated on
any of the  Accounts  of  Borrower  to make  payment  directly to LaSalle of any
amounts due or to become due thereunder.

         (c) For the purpose of determining Borrower's Borrowing Base hereunder,
LaSalle shall, upon receipt by LaSalle in its bank account in Chicago, Illinois,
of cash or  other  immediately  available  funds  from  collections  of items of
payment  and  proceeds  of any  Collateral,  apply the whole or any part of such
collections or proceeds  against the  Liabilities in such order as LaSalle shall
determine in its sole discretion.

         (d) In its sole  credit  judgment,  without  waiving or  releasing  any
obligation,  liability  or duty of Borrower  under this  Agreement  or the Other
Agreements or any Event of Default, at any time or times hereafter,  LaSalle may
(but shall not be  obligated  to) pay,  acquire or accept an  assignment  of any
security interest, lien, encumbrance or claim asserted by any Person in, upon or
against  the  Collateral.  All sums paid by LaSalle in respect  thereof  and all
costs, fees and expenses  (including,  without  limitation,  reasonable attorney
fees for both inside and outside counsel,  all court costs and all other charges
relating thereto) incurred by LaSalle shall constitute  Revolving Loans, payable
by  Borrower to LaSalle on demand and,  until paid,  shall bear  interest at the
highest rate then applicable to Revolving Loans hereunder.

         (e)  Immediately  upon  Borrower's   receipt  of  any  portion  of  the
Collateral evidenced by an agreement,  Instrument or Document including, without
limitation,  any Chattel Paper,  Borrower shall deliver the original  thereof to
LaSalle together with an appropriate  endorsement or other specific  evidence of
assignment thereof to LaSalle (in form and substance acceptable to LaSalle).  If
an  endorsement or assignment of any such item shall not be made for any reason,
LaSalle  is  hereby   irrevocably   authorized,   as  Borrower's   attorney  and
agent-in-fact, to endorse or assign the same on Borrower's behalf.

     11. SCHEDULES AND REPORTS.

         (a) Borrower shall provide to LaSalle  compliance  certificates  in the
form attached as Exhibit D and the periodic  reports and other  information  and
schedules  described  on  Exhibit  E at the times  specified  on  Exhibit  E. In
addition,  Borrower shall furnish LaSalle with such other statements and reports
as  LaSalle  may  request  from  time to time,  including,  without  limitation,
providing the reports,  information, and schedules listed on Exhibit E on a more
frequent basis than specified on Exhibit E.

         (b) Borrower shall immediately notify LaSalle of any event causing loss
or  depreciation  in value of the  Collateral  (other than  normal  depreciation
occurring in the ordinary course of business).

         (c) All  schedules,  certificates,  reports and  assignments  and other
items  delivered  by  Borrower  to LaSalle  hereunder  shall be  executed  by an
authorized representative of


                                       18
<PAGE>

Borrower and shall be in such form and contain such information as LaSalle shall
reasonably request.

     12. TERMINATION.

         (a) This  Agreement  shall be in effect from the date hereof  until the
third anniversary of the Closing Date ("Original Term") and shall  automatically
renew  itself from year to year  thereafter  (each such one year  renewal  being
referred  to  herein  as a  "Renewal  Term")  unless  (i)  the  due  date of the
Liabilities  is  accelerated  pursuant to paragraph 17 hereof;  or (ii) Borrower
elects or LaSalle  elects to terminate this Agreement at the end of the Original
Term or at the end of any Renewal Term by giving the other party written  notice
of such election at least ninety (90) days prior to the end of the Original Term
or the then current  Renewal Term,  in which case Borrower  shall pay all of the
Liabilities  in full on the last day of such term.  If one or more of the events
specified in subparagraphs (i) or (ii) occurs, this Agreement shall terminate on
the date  thereafter  that  the  Liabilities  are paid in full and the  security
interests and liens created under this Agreement and the Other  Agreements shall
survive such  termination  until the date upon which payment and satisfaction in
full of the Liabilities shall have occurred. At such time as Borrower has repaid
all of the  Liabilities  and this Agreement has  terminated,  (A) Borrower shall
deliver to LaSalle a release, in form and substance  reasonably  satisfactory to
LaSalle,  of all  obligations  and  liabilities  of  LaSalle  and its  officers,
directors,  employees, agents, parents, subsidiaries and affiliates to Borrower,
and if Borrower is obtaining new financing from another  lender,  Borrower shall
deliver  such  lender's  indemnification  of  LaSalle,  in  form  and  substance
satisfactory  to LaSalle,  for checks which  LaSalle has credited to  Borrower's
account,  but which  subsequently  are  dishonored  for any  reason and (B) upon
Borrower's  request,  LaSalle  shall  deliver to  Borrower a release in form and
substance reasonably satisfactory to Borrower.

         (b) If, during the term of this Agreement, (including any Renewal Term)
Borrower prepays all or any portion of the  Liabilities,  Borrower agrees to pay
to  LaSalle,  as a  prepayment  fee,  in  addition  to the  payment of all other
Liabilities  owing by Borrower,  an amount equal to three percent  (3.0%) of the
Revolving  Credit  Facility  if  such  prepayment  occurs  prior  to  the  first
anniversary  of the Closing Date,  two percent  (2.0%) of the  Revolving  Credit
Facility if such prepayment  occurs on or after the first  anniversary but prior
to the second  anniversary  of the Closing Date,  and one percent  (1.0%) if the
prepayment occurs on or after the second anniversary of the Closing Date, except
if terminated  at the end of the Original Term or any Renewal Term,  pursuant to
the terms set forth herein.

     13.  REPRESENTATIONS  AND  WARRANTIES.  Borrower hereby makes the following
representations, warranties and covenants:

         (a) the financial  statements  delivered or to be delivered by Borrower
to LaSalle at or prior to the date of this Agreement and at all times subsequent
thereto  accurately reflect the financial  condition of Borrower,  and since the
date of the Borrower's  financial  statements delivered to LaSalle most recently
prior to the date of this  Agreement,  no event or condition has occurred  which
has had, or is reasonably likely to have, a Material Adverse Effect;

                                       19
<PAGE>

         (b) the office where Borrower keeps its books, records and accounts (or
copies  thereof)  concerning  the  Collateral,  Borrower's  principal  place  of
business and all of Borrower's other places of business, locations of Collateral
and post office  boxes are as set forth in Exhibit B;  Borrower  shall  promptly
(but in no event  less than ten (10)  days  prior  thereto)  advise  LaSalle  in
writing of the proposed opening of any new place of business, the closing of any
existing  place of  business,  any change in the location of  Borrower's  books,
records and accounts  (or copies  thereof) or the opening or closing of any post
office box of Borrower;

         (c) the Collateral, including without limitation, the Equipment (except
any part thereof which prior to the date of this  Agreement  Borrower shall have
advised LaSalle in writing consists of Collateral normally used in more than one
state) is and shall be kept,  or, in the case of  vehicles,  based,  only at the
addresses set forth on the first page of this  Agreement or on Exhibit B, and at
other locations  within the continental  United States of which LaSalle has been
previously advised by Borrower in writing;

         (d) Borrower  shall  immediately  give written notice to LaSalle of any
use of any such  Goods in any state  other  than a state in which  Borrower  has
previously  advised  LaSalle such Goods shall be used, and such Goods shall not,
unless  LaSalle  shall  otherwise  consent in  writing,  be used  outside of the
continental United States;

         (e) no security agreement,  financing statement or analogous instrument
exists or shall  exist  with  respect  to any of the  Collateral  other than any
security  agreement,  financing  statement  or analogous  instrument  evidencing
Permitted Liens;

         (f) each Account or item of Inventory which Borrower  shall,  expressly
or by  implication,  request  LaSalle to classify  as an Eligible  Account or as
Eligible  Inventory,  respectively,  shall,  as of the time when such request is
made, conform in all respects to the requirements of such  classification as set
forth in the respective  definitions of Eligible Account and Eligible  Inventory
and as otherwise  established  by LaSalle from time to time,  and Borrower shall
promptly  notify  LaSalle in writing if any such  Eligible  Account or  Eligible
Inventory shall subsequently become ineligible;

         (g) Borrower is and shall at all times during the Original  Term or any
Renewal  Term be the lawful owner of all  Collateral  now  purportedly  owned or
hereafter  purportedly  acquired  by  Borrower,  free  from all  liens,  claims,
security  interests  and  encumbrances   whatsoever,   whether   voluntarily  or
involuntarily  created and whether or not  perfected,  other than the  Permitted
Liens;

         (h)  Borrower  has the  right  and  power  and is duly  authorized  and
empowered  to enter  into,  execute  and deliver  this  Agreement  and the Other
Agreements  and perform its  obligations  hereunder and  thereunder;  Borrower's
execution,  delivery and performance of this Agreement and the Other  Agreements
does not and shall not conflict with the provisions of any statute,  regulation,
ordinance or rule of law, or any agreement, contract or other document which may
now or hereafter be binding on Borrower, and Borrower's execution,  delivery and
performance of this Agreement and the Other  Agreements  shall not result in the
imposition  of 


                                       20
<PAGE>

any lien or other encumbrance upon any of Borrower's property under any existing
indenture,  mortgage, deed of trust, loan or credit agreement or other agreement
or instrument by which Borrower or any of its property may be bound or affected;

         (i) except as  otherwise  disclosed  on  Schedule  13(i),  there are no
actions  or  proceedings  which  are  pending  or,  to the  best  of  Borrower's
knowledge,  threatened  against  Borrower which are reasonably  likely to have a
Material Adverse Effect and Borrower shall,  promptly upon becoming aware of any
such pending or threatened action or proceeding,  give written notice thereof to
LaSalle;

         (j) Borrower has obtained all licenses,  authorizations,  approvals and
permits, the lack of which would have a Material Adverse Effect on the operation
of its business,  and Borrower is and shall remain in compliance in all material
respects with all applicable federal, state, local and foreign statutes, orders,
regulations,  rules and ordinances  (including,  without  limitation,  statutes,
orders,  regulations,  rules and  ordinances  relating  to taxes,  employer  and
employee  contributions and similar items,  securities,  employee retirement and
welfare  benefits,  employee health and safety or  environmental  matters),  the
failure  to comply  with  which  would  have a  Material  Adverse  Effect on its
business, property, assets, operations or condition, financial or otherwise;

         (k) all written  information now,  heretofore or hereafter furnished by
Borrower to LaSalle is and shall be true and correct in all material respects as
of the date with respect to which such  information was or is furnished  (except
for  financial  projections,  which have been  prepared in good faith based upon
reasonable assumptions);

         (l)  Borrower  is  not  conducting,   permitting  or  suffering  to  be
conducted,  nor  shall  it  conduct,  permit  or  suffer  to be  conducted,  any
activities pursuant to or in connection with which any of the Collateral is now,
or will (while any Liabilities remain outstanding) be owned by any Affiliate;

         (m)  Borrower's  name has always been as set forth on the first page of
this  Agreement  and  Borrower  uses no  trade  names or  division  names in the
operation  of its  business,  except as  disclosed  in  Section C on  Exhibit B;
Borrower  shall notify  LaSalle in writing within ten (10) days of the change of
its  name or the  use of any  trade  names  or  division  names  not  previously
disclosed to LaSalle in writing;

         (n) with  respect to  Borrower's  Equipment:  (i) Borrower has good and
indefeasible  and  merchantable  title to and ownership of all  Equipment;  (ii)
Borrower shall keep and maintain the Equipment in good  operating  condition and
repair and shall make all necessary replacements thereof and renewals thereto so
that the value and operating  efficiency thereof shall at all times be preserved
and  maintained,  ordinary  wear  and tear  excepted;  (iii)  from  time to time
Borrower may sell, exchange or otherwise dispose of obsolete, unused or worn out
Equipment, and (iv) Borrower, immediately on demand by LaSalle, shall deliver to
LaSalle any and all evidence of ownership  of,  including,  without  limitation,
certificates  of title  and  applications  of 

                                       21
<PAGE>

title to,  any of the  Equipment,  excepting  titles to  vehicles  subject  to a
Permitted Lien having priority over the security interest of LaSalle;

         (o) this  Agreement  and the Other  Agreements  to which  Borrower is a
party  are  the  legal,  valid  and  binding  obligations  of  Borrower  and are
enforceable  against Borrower in accordance with their respective terms,  except
to the extent that such enforceability may be limited by applicable  bankruptcy,
insolvency, reorganization,  moratorium and similar laws affecting the rights of
creditors generally;

         (p)  Borrower is  solvent,  is able to pay its debts as they become due
and has capital sufficient to carry on its business,  now owns property having a
value both at fair valuation and at present fair saleable value greater than the
amount  required  to pay its debts,  and will not be rendered  insolvent  by the
execution  and delivery of this  Agreement or any of the Other  Agreements,  the
Asset  Purchase  Agreement or any related  agreements,  or by  completion of the
transactions contemplated hereunder or thereunder;

         (q) Borrower is not now obligated,  whether directly or indirectly, for
any  loans  or  other  indebtedness  for  borrowed  money  other  than  (i)  the
Liabilities;  (ii)  indebtedness  disclosed to LaSalle on Schedule 13(q);  (iii)
unsecured  indebtedness  to trade  creditors  arising in the ordinary  course of
Borrower's   business;   and  (iv)  unsecured   indebtedness  arising  from  the
endorsement  of drafts and other  instruments  for  collection,  in the ordinary
course of Borrower's business;

         (r)  Borrower  does  not own any  margin  securities,  and  none of the
proceeds of the Loans  hereunder  shall be used for the purpose of purchasing or
carrying  any margin  securities  or for the purpose of reducing or retiring any
indebtedness which was originally  incurred to purchase any margin securities or
for any other purpose not permitted by Regulation G or Regulation U of the Board
of Governors of the Federal Reserve System as in effect from time to time;

         (s) except as otherwise  disclosed on Schedule  13(s),  Borrower has no
Parents, Subsidiaries or divisions, nor is Borrower engaged in any joint venture
or partnership with any other Person;

         (t)  Borrower is duly  organized  and in good  standing in its state of
organization  and Borrower is duly  qualified and in good standing in all states
where the nature and extent of the business transacted by it or the ownership of
its assets makes such qualification  necessary,  except for such other states in
which the failure to so qualify would not have a Material Adverse Effect;

         (u) Borrower is not in default  under any material  contract,  lease or
commitment  to which it is a party or by which it is  bound,  nor does  Borrower
know of any  dispute  regarding  any  contract,  lease  or  commitment  which is
material to the continued financial success and well-being of Borrower;

                                       22
<PAGE>

         (v) there are no controversies  pending or threatened  between Borrower
and any of its employees, other than employee grievances arising in the ordinary
course of business  which are not, in the  aggregate,  material to the continued
financial  success and well-being of Borrower,  and Borrower is in compliance in
all material respects with all federal and state laws respecting  employment and
employment  terms,  conditions  and  practices,  except  where the failure to so
comply would not have a Material Adverse Effect;

         (w)  Borrower  possesses,  and  shall  continue  to  possess,  adequate
licenses, patents, patent applications,  copyrights,  service marks, trademarks,
trademark  applications,  tradestyles and trade names to continue to conduct its
business as heretofore conducted by it; and

         (x) Borrower and its Subsidiaries  have reviewed the areas within their
business and operations which could be adversely affected by, and have developed
or are  developing  a program  to  address  on a timely  basis,  the "Year  2000
Problem" (that is, the risk that computer  applications used by Borrower and its
Subsidiaries  may be unable to  recognize  and perform  properly  date-sensitive
functions involving certain dates prior to and any date on or after December 31,
1999),  and have made  related  appropriate  inquiry of material  suppliers  and
vendors. Based on such review and program, Borrower believes that the "Year 2000
Problem"  will not have a Material  Adverse  Effect.  From time to time,  at the
request of LaSalle,  Borrower and its Subsidiaries shall provide to LaSalle such
updated  information or  documentation  as is requested  regarding the status of
their efforts to address the Year 2000 problem.

Borrower represents, warrants and covenants to LaSalle that all representations,
warranties  and  covenants  of Borrower  contained  in this  Agreement  (whether
appearing in paragraphs 13 or 14 hereof or elsewhere)  shall be true at the time
of Borrower's execution of this Agreement, shall survive the execution, delivery
and acceptance  hereof by the parties hereto and the closing of the transactions
described  herein or related  hereto,  shall remain true until the  repayment in
full of all of the Liabilities  and termination of this Agreement,  and shall be
remade by  Borrower at the time each  Revolving  Loan is made and each Letter of
Credit is issued pursuant to this Agreement.

     14. COVENANTS. Until payment or satisfaction in full of all Liabilities and
termination of this Agreement,  unless Borrower obtains  LaSalle's prior written
consent  waiving or  modifying  any of  Borrower's  covenants  hereunder  in any
specific instance, Borrower agrees as follows:

         (a)  Borrower  shall at all times keep  accurate  and  complete  books,
records and accounts with respect to all of Borrower's business  activities,  in
accordance with sound  accounting  practices and using the accounting  terms and
definitions  specified in paragraph 1(b) and shall keep such books,  records and
accounts,  and any copies  thereof,  only at the  addresses  indicated  for such
purpose on Exhibit B;

         (b)  Borrower  agrees to  deliver to LaSalle  the  following  financial
information,  all of which shall be prepared in accordance with accounting terms
and definitions  specified in paragraph 1(b): (i) no later than thirty (30) days
after each calendar month, copies of internally prepared financial statements of
Borrower and its Subsidiaries, on a consolidated, monthly and


                                       23
<PAGE>

year-to-date basis including, without limitation,  balance sheets and statements
of income and retained earnings of Borrower and its  Subsidiaries,  certified by
an officer of Borrower and  accompanied by an officer's  certificate in the form
of Exhibit D attached  hereto and (ii) no later than  ninety (90) days after the
end of each of Borrower's fiscal years, annual financial  statements of Borrower
and its  Subsidiaries  on a  consolidated  and  consolidating  basis  audited by
independent  certified  public  accountants  selected by Borrower and reasonably
satisfactory to LaSalle, together with such accountants' "management letter," if
any;

         (c) LaSalle,  or any Persons  designated by it, shall have the right in
the  exercise  of its  commercially  reasonable  credit  judgment,  to  call  at
Borrower's places of business at any reasonable times, and, without hindrance or
delay, to inspect the Collateral and to inspect,  audit, check and make extracts
from   Borrower's   books,   records,   journals,   orders,   receipts  and  any
correspondence and other data relating to Borrower's business, the Collateral or
any  transactions  between the parties hereto,  and shall have the right to make
such  verification  concerning  Borrower's  business  as  LaSalle  may  consider
reasonable  under the  circumstances.  Borrower  shall  furnish to LaSalle  such
information  relevant to LaSalle's  rights under this Agreement as LaSalle shall
at any  time and from  time to time  reasonably  request.  Borrower  shall  also
furnish to  LaSalle,  at the time of filing or  distribution,  all  reports  and
filings  submitted  to the  Securities  Exchange  Commission  and all  materials
distributed generally to Borrower's shareholders. Borrower authorizes LaSalle to
discuss the  affairs,  finances  and  business of Borrower  with any officers or
directors of Borrower or any Affiliate, or with those employees of Borrower with
whom  LaSalle  has  determined  in its  commercially  reasonable  judgment to be
necessary or desirable to converse,  and to discuss the  financial  condition of
Borrower with Borrower's  independent public  accountants.  Any such discussions
shall be without liability to LaSalle or to such accountants. Borrower shall pay
to or  reimburse  LaSalle for all  reasonable  fees,  costs,  and  out-of-pocket
expenses  incurred  by  LaSalle in the  exercise  of its  rights  hereunder  (in
addition to the fees payable by Borrower  pursuant to paragraph  14(o) hereof in
connection  with  LaSalle's  examination  of  Borrower's  books and  records and
Collateral) and all of such costs, fees and expenses shall constitute  Revolving
Loans hereunder, shall be payable on demand and, until paid, shall bear interest
at the highest rate then applicable to Revolving Loans hereunder;

         (d) (i) Borrower  shall keep the Collateral  properly  housed and shall
keep the  Collateral  insured  against  such  risks and in such  amounts  as are
customarily  insured against by Persons engaged in businesses similar to that of
Borrower with such companies, in such amounts and under policies in such form as
shall be reasonably  satisfactory to LaSalle.  Originals or certified  copies of
such  policies of  insurance  have been,  or within  fifteen (15) days after the
Closing Date,  shall be,  delivered to LaSalle together with evidence of payment
of all  premiums  therefor,  and  shall  contain  an  endorsement,  in form  and
substance  acceptable  to LaSalle,  showing loss under such  insurance  policies
payable to LaSalle. Such endorsement,  or an independent instrument furnished to
LaSalle,  shall provide that the  insurance  company shall give LaSalle at least
thirty (30) days' written  notice before any such policy of insurance is altered
or  cancelled  and that no act,  whether  willful  or  negligent,  or default of
Borrower or any other Person shall affect the right of LaSalle to recover  under
such policy of insurance in case of loss or damage.  Borrower hereby directs all
insurers under such policies of insurance to pay all proceeds payable thereunder
directly to LaSalle  (subject,  however,  to the rights of holders of  Permitted
Liens with


                                       24
<PAGE>

priority  over  LaSalle's  security  interest).   Borrower   irrevocably  makes,
constitutes  and  appoints  LaSalle  (and  all  officers,  employees  or  agents
designated   by  LaSalle)  as   Borrower's   true  and  lawful   attorney   (and
agent-in-fact)  for the purpose of making,  settling and adjusting  claims under
such policies of insurance,  endorsing the name of Borrower on any check, draft,
instrument  or other  item of  payment  for the  proceeds  of such  policies  of
insurance  and making all  determinations  and  decisions  with  respect to such
policies of  insurance;  provided,  however,  that LaSalle  shall  exercise such
rights only upon the occurrence of an Event of Default;

                  (ii)  Borrower  shall  maintain,  at its expense,  such public
liability and third party property damage  insurance as is customary for Persons
engaged in  businesses  similar to that of Borrower  with such  companies and in
such amounts,  with such deductibles and under policies in such form as shall be
reasonably  satisfactory to LaSalle,  and originals or certified  copies of such
policies have been, or within fifteen (15) days after the Closing Date shall be,
delivered to LaSalle together with evidence of payment of all premiums therefor;
each such policy shall  contain an  endorsement  showing  LaSalle as  additional
insured  thereunder and providing that the insurance  company shall give LaSalle
at least  thirty  (30) days'  written  notice  before any such  policy  shall be
altered or cancelled; and

                  (iii) If Borrower at any time or times hereafter shall fail to
obtain or maintain any of the policies of insurance required above or to pay any
premium in whole or in part relating thereto,  then LaSalle,  without waiving or
releasing  any  obligation or default by Borrower  hereunder,  may (but shall be
under no  obligation  to) obtain and maintain such policies of insurance and pay
such premiums and take such other actions with respect  thereto as LaSalle deems
advisable.  All sums  disbursed by LaSalle in connection  with any such actions,
including,  without limitation,  court costs,  expenses,  other charges relating
thereto  and  reasonable  attorneys'  fees,  shall  constitute  Revolving  Loans
hereunder  and,  until  paid,  shall  bear  interest  at the  highest  rate then
applicable to Revolving Loans hereunder.

                                     WARNING

                  UNLESS  BORROWER   PROVIDES   LASALLE  WITH  EVIDENCE  OF  THE
         INSURANCE COVERAGE AS REQUIRED BY THIS AGREEMENT,  LASALLE MAY PURCHASE
         INSURANCE AT BORROWER'S  EXPENSE TO PROTECT  LASALLE'S  INTEREST.  THIS
         INSURANCE MAY, BUT NEED NOT, ALSO PROTECT BORROWER'S  INTEREST.  IF THE
         COLLATERAL BECOMES DAMAGED,  THE COVERAGE LASALLE PURCHASES MAY NOT PAY
         ANY CLAIM BORROWER MAKES OR ANY CLAIM MADE AGAINST  BORROWER.  BORROWER
         MAY LATER CANCEL THIS COVERAGE BY PROVIDING  EVIDENCE THAT BORROWER HAS
         OBTAINED THE REQUIRED COVERAGE ELSEWHERE.

                                       25
<PAGE>

                  BORROWER  IS  RESPONSIBLE   FOR  THE  COST  OF  ANY  INSURANCE
         PURCHASED  BY  LASALLE.  THE  COST OF THIS  INSURANCE  MAY BE  ADDED TO
         BORROWER'S LIABILITIES. IF THE COST IS ADDED TO BORROWER'S LIABILITIES,
         THE INTEREST RATE  APPLICABLE TO THE REVOLVING LOANS WILL APPLY TO THIS
         ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE BORROWER'S
         PRIOR COVERAGE  LAPSED OR THE DATE BORROWER  FAILED TO PROVIDE PROOF OF
         COVERAGE.

                  THE  COVERAGE  LASALLE  PURCHASES  MAY  BE  CONSIDERABLY  MORE
         EXPENSIVE  THAN  INSURANCE  BORROWER  CAN OBTAIN ON ITS OWN AND MAY NOT
         SATISFY  ANY  NEED  FOR  PROPERTY  DAMAGE  COVERAGE  OR  ANY  MANDATORY
         LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW.

         (e) Borrower shall not use the Collateral,  or any part thereof, in any
unlawful  business or for any  unlawful  purpose or use or  maintain  any of the
Collateral  in any manner that does or could  result in  material  damage to the
environment  or a  violation  of any  applicable  environmental  laws,  rules or
regulations;  Borrower shall keep the Collateral in good  condition,  repair and
order,  ordinary  wear  and  tear  excepted;   Borrower  shall  not  permit  the
Collateral, or any part thereof, to be levied upon under execution,  attachment,
distraint  or other  legal  process;  Borrower  shall not sell,  lease,  grant a
security  interest in or otherwise  dispose of any of the  Collateral  except as
expressly permitted by this Agreement; and Borrower shall not secrete or abandon
any of the Collateral, or remove or permit removal of any of the Collateral from
any of the  locations  listed on Exhibit B or in any  written  notice to LaSalle
pursuant to paragraph 13(c) hereof,  except for the removal of Inventory sold in
the ordinary course of Borrower's business as permitted herein;

         (f) All monies and other  property  obtained by Borrower  from  LaSalle
pursuant  to this  Agreement  will be  used  solely  for  business  purposes  of
Borrower;

         (g) Borrower shall, at the request of LaSalle,  indicate on its records
concerning the Collateral a notation,  in form  satisfactory to LaSalle,  of the
security  interest  of  LaSalle  hereunder,  and  Borrower  shall  not  maintain
duplicates  or copies of such  records  at any  address  other  than  Borrower's
principal  place of  business  set  forth on the first  page of this  Agreement;
provided,  however, that Borrower,  in the ordinary course of its business,  may
furnish copies of such records to its accountants, attorneys and other agents or
advisors as it may  determine to be necessary or  desirable,  in the exercise of
its commercially reasonable judgment;


                                       26
<PAGE>

         (h)  Borrower  shall file all  required  tax returns and pay all of its
taxes when due, including,  without limitation,  taxes imposed by federal, state
or  municipal  agencies,  and shall  cause  any  liens for taxes to be  promptly
released;  provided,  however, that Borrower shall have the right to contest the
payment of such taxes in good faith by  appropriate  proceedings  so long as (i)
the amount so contested is shown on Borrower's  financial  statements,  (ii) the
contesting  of any such  payment  does not give rise to a lien for taxes,  (iii)
upon the  occurrence  of an Event of  Default,  Borrower  keeps on deposit  with
LaSalle (such deposit to be held without  interest) an amount of money which, in
the sole  judgment of LaSalle,  is sufficient to pay such taxes and any interest
or penalties  that may accrue  thereon,  and (iv) if Borrower fails to prosecute
such contest with reasonable diligence, LaSalle may apply the money so deposited
in payment of such  taxes.  If  Borrower  fails to pay any such taxes and in the
absence of any such  contest  by  Borrower,  LaSalle  may (but shall be under no
obligation to) advance and pay any sums required to pay any such taxes and/or to
secure the  release of any lien  therefor,  and any sums so  advanced by LaSalle
shall  constitute  Revolving  Loans  hereunder,  shall be payable by Borrower to
LaSalle on demand, and, until paid, shall bear interest at the highest rate then
applicable to Revolving Loans hereunder;

         (i) Borrower shall not (i) incur, create, assume or suffer to exist any
indebtedness  other than (A)  indebtedness  arising  under this  Agreement,  (B)
unsecured  indebtedness  owing  in the  ordinary  course  of  business  to trade
suppliers,  (C) any other indebtedness described on Schedule 13(q), (D) purchase
money security  interests  incurred to finance  Capital  Expenditures  after the
Closing Date provided such Capital  Expenditures  do not to exceed the limit set
forth in paragraph  14(n) below,  and (E)  indebtedness  to any  shareholder  of
Borrower provided such indebtedness is fully  subordinated to the Liabilities on
such terms and conditions and by such documentation as is approved in writing by
LaSalle  in its sole  discretion;  or (ii)  assume,  guarantee  or  endorse,  or
otherwise  become  liable in connection  with,  the  obligations  of any Person,
except by  endorsement  of  instruments  for  deposit or  collection  or similar
transactions in the ordinary course of business;

         (j) Borrower shall not enter into any merger or consolidation, or sell,
lease or otherwise dispose of all or substantially  all of its assets;  Borrower
shall not create any new Subsidiary or Affiliate;  Borrower shall not enter into
any transaction outside the ordinary course of Borrower's business;

         (k)  Borrower  shall  not (i)  declare  or pay any  dividend  or  other
distribution  (whether  in cash or in kind) on,  purchase,  redeem or retire any
shares of any class of its stock,  or make any  payment  on  account  of, or set
apart assets for the  repurchase,  redemption,  defeasance or retirement of, any
class of its  stock;  or (ii) make any  optional  payment  or  prepayment  on or
redemption (including without limitation by making payments to a sinking fund or
analogous fund) or repurchase of any  indebtedness for borrowed money other than
indebtedness pursuant to this Agreement;

                                       27
<PAGE>

         (l) Borrower shall not make any loans to, or investment in, any Person,
whether  in  cash,  securities  or  other  property  of  any  kind,  other  than
investments that are direct obligations of the United States;

         (m) Borrower shall not amend its organizational documents or change its
fiscal year to end on any date other than December 31;

         (n) Borrower  shall  maintain and keep in full force and effect each of
the financial  covenants set forth below.  The calculation and  determination of
each such financial covenant,  and all accounting terms contained therein, shall
be  calculated  and  construed  in  accordance  with  GAAP,  applied  on a basis
consistent with the reviewed  financial  statements of Borrower  delivered on or
before the Closing Date:

                  (i)  Consolidated   Tangible  Net  Worth.   Borrower  and  its
         Subsidiaries,  on a consolidated basis, shall maintain as of the end of
         (A) the month ending December 31, 1998 a Tangible Net Worth of not less
         than the Base Amount (as defined below) and (B) each month  thereafter,
         a  Tangible  Net Worth of not less than the sum of (1) the Base  Amount
         and (2) an aggregate  amount equal to ninety  percent  (90%) of the net
         income after taxes of Borrower and its Subsidiaries,  on a consolidated
         basis,  for each fiscal quarter  ending  subsequent to the Closing Date
         (provided,  however, that such aggregate amount shall not be reduced by
         the  amount  of  any  net  loss  before   taxes  of  Borrower  and  its
         Subsidiaries,  on a consolidated  basis, for any fiscal  quarter).  For
         purposes  of this  paragraph  (i),  the "Base  Amount"  shall  mean the
         greater of (x) five million dollars  ($5,000,000) or (y) the sum of the
         Consolidated  Tangible  Net Worth of Borrower and its  Subsidiaries  as
         reflected on  Borrower's  audited  December 31, 1998 balance sheet less
         five hundred thousand ---- dollars  ($500,000),  less any net after-tax
         loss  in  excess  of  $50,000  sustained  by  Borrower  and  -----  its
         Subsidiaries on a consolidated basis for the month of December 1998;

                  (ii)  Cash  Flow.   Borrower  and  its   Subsidiaries,   on  a
         consolidated  basis, shall have Cash Flow of no less than the following
         amounts:

              Period                                          Minimum Cash Flow
              ------                                          -----------------

              Quarter ending March 31, 1999                       $375,000

              Two quarters ending June 30, 1999                   $750,000

              Three quarters ending September 30, 1999           $1,125,000

              The twelve (12) month period ending as of the 
              end of each fiscal quarter thereafter              $1,500,000
              

                                       28
<PAGE>

                  (iii)  Consolidated Debt Service Coverage Ratio.  Borrower and
         its Subsidiaries,  on a consolidated  basis,  shall maintain as of each
         fiscal quarter for the twelve (12) month period ending with such fiscal
         quarter (or, with respect to the fiscal  quarters ending March 31, June
         30, and September 30, 1999,  for the three,  six and nine month periods
         ending  with  such  fiscal  quarters,  respectively),  a  Debt  Service
         Coverage Ratio of not less than 1.5 to 1.0;

                  (iv) Consolidated  Interest  Coverage Ratio.  Borrower and its
         Subsidiaries, on a consolidated basis, shall maintain as of each fiscal
         quarter  for the  twelve  (12) month  period  ending  with such  fiscal
         quarter (or, with respect to the fiscal  quarters ending March 31, June
         30, and September 30, 1999,  for the three,  six and nine month periods
         ending with such fiscal quarters,  respectively),  an Interest Coverage
         Ratio of not less than 1.5 to 1.0; and

                  (v)  Consolidated  Capital  Expenditures.   Borrower  and  its
         Subsidiaries,   on  a  consolidated   basis,  shall  not  make  Capital
         Expenditures  in any fiscal year in an aggregate  amount which  exceeds
         the sum of three hundred fifty thousand dollars ($350,000).

         (o)  Borrower  shall  reimburse  LaSalle for all  reasonable  costs and
expenses including, without limitation, legal expenses and reasonable attorneys'
fees (both in-house and outside counsel), incurred by LaSalle in connection with
the  documentation  and  consummation of this  transaction and any amendments or
modifications  of this Agreement or the Other  Agreements or other  transactions
between Borrower and LaSalle, including, without limitation,  Uniform Commercial
Code and other public record searches, lien filings,  Federal Express or similar
express or messenger  delivery,  appraisal costs,  surveys,  title insurance and
environmental  audit or review  costs,  and in  seeking to  collect,  protect or
enforce any rights in or to the  Collateral or incurred by LaSalle in seeking to
collect any  Liabilities  and to administer and enforce any of LaSalle's  rights
under this  Agreement.  Borrower shall also pay all normal service  charges with
respect to accounts maintained by LaSalle for the benefit of Borrower.  All such
costs, expenses and charges shall constitute Revolving Loans hereunder, shall be
payable by Borrower to LaSalle on demand,  and, until paid,  shall bear interest
at the highest rate then applicable to Revolving Loans hereunder;

         (p) [Deleted.]

         (q)  Borrower  shall  not enter  into or be a party  to, or permit  any
Subsidiary to enter into or be a party to, any transaction with any Affiliate of
Borrower  except in the ordinary course of business in a manner and to an extent
consistent  with past  practices of Borrower and  necessary or desirable for the
prudent operation of its business,  for fair  consideration and on terms no less
favorable to Borrower or such  Subsidiary  as are  available  from  unaffiliated
third parties;

                                       29
<PAGE>

         (r) Borrower shall  promptly  advise LaSalle in writing of any Material
Adverse Effect or the occurrence of any Default or Event of Default; and

         (s) With respect to Environmental Laws and Hazardous Materials:

                  (i) Borrower shall establish and maintain,  at its expense,  a
         system to assure and monitor its compliance with all Environmental Laws
         in all of its operations.  Copies of all environmental surveys, audits,
         assessments, feasibility studies and results of remedial investigations
         shall be  promptly  furnished  by  Borrower  to LaSalle  upon  request.
         Borrower  shall take  prompt and  appropriate  action to respond to any
         non-compliance with any of the Environmental Laws;

                  (ii) Borrower shall give written notice to LaSalle immediately
         upon  Borrower's  receipt  of any notice  of, or  Borrower's  otherwise
         obtaining  knowledge of, (i) the occurrence of any event  involving the
         release,  spill or discharge,  threatened  or actual,  of any Hazardous
         Material  (unless the release,  spill or discharge is fully  remediated
         within  30  days  after  Borrower  first  obtains  knowledge  of it and
         Borrower has no liability or  potential  liability  resulting  from the
         release,  spill or discharge other than remediation costs not exceeding
         $10,000)  or (ii)  any  investigation,  proceeding,  complaint,  order,
         directive,   claim,  citation  or  notice  with  respect  to:  (A)  any
         non-compliance  with or violation of any Environmental Law by Borrower;
         or (B) the release,  spill or discharge,  threatened or actual,  of any
         Hazardous  Material except in compliance with applicable  Environmental
         Laws; or (C) the generation, use, storage,  treatment,  transportation,
         manufacture,   handling,   production  or  disposal  of  any  Hazardous
         Materials except in compliance with applicable  Environmental  Laws; or
         (D) any other  environmental,  health or safety  matter  which  affects
         Borrower or its  business,  operations  or assets or any  properties at
         which  Borrower  transported,  stored  or  disposed  of  any  Hazardous
         Materials  (unless,  in any such  case the  investigation,  proceeding,
         complaint,  order, directive,  claim, citation or notice is terminated,
         dismissed or withdrawn  within 30 days and Borrower has no liability or
         potential liability resulting therefrom in excess of $10,000); and

                                       30
<PAGE>

                  (iii) Borrower shall indemnify and hold harmless LaSalle,  its
         directors,  officers,  employees,  agents,  insurers,  representatives,
         successors  and assigns,  from and against any and all losses,  claims,
         damages,  liabilities,  costs, and expenses (including  attorneys' fees
         and  legal  expenses)   directly  or  indirectly   arising  out  of  or
         attributable  to any  violation  of any  Environmental  Law or the use,
         generation,  manufacture,  reproduction,  storage, release,  threatened
         release,  spill,  discharge,   disposal  or  presence  of  a  Hazardous
         Material,  including  the costs of any  required or  necessary  repair,
         cleanup  or  other  remedial  work  with  respect  to any  property  of
         Borrower,  and  the  preparation  and  implementation  of any  closure,
         remedial or other required plans. All covenants and indemnifications in
         this subsection  14(s) shall survive the payment of the Liabilities and
         the termination or nonrenewal of this Agreement.

         (t) On or  before  January  15,  1999,  Borrower  shall  cause  Emerald
Technology Valuation,  at Borrower's expense, to complete and deliver to LaSalle
a net liquidation value appraisal of Borrower's  Inventory in form and substance
satisfactory to LaSalle.  After review of the Appraisal,  the Inventory  Advance
Rate shall be adjusted in accordance with this Agreement.

         (u) Borrower  shall not make any  prepayments  of any  indebtedness  to
Scitex;  provided,  however,  that so long as Borrower is in compliance with all
covenants in this  Agreement,  and such payments  would not cause Borrower to be
out of compliance with any of such  covenants,  and (ii) so long as Borrower has
at least  $1,500,000 of Excess  Availability,  will have at least  $1,500,000 of
Excess  Availability  after such  payments are made,  and would have had average
Excess  Availability of at least $1,500,000 on a pro forma basis for the 30 days
immediately preceding the date of payment, such pro forma Excess Availability to
be  calculated  as if such  payments  had been made on the 31st day prior to the
proposed date of payment,  Borrower, after May 31, 1999, may make prepayments on
indebtedness  to Scitex.  After the occurrence and during the continuance of any
Default  or  Event  of  Default,   Borrower  shall  not  make  any  payments  on
indebtedness  to Scitex,  including  any  scheduled  payments  of  principal  or
interest.

     15. CONDITIONS PRECEDENT.

         (a) The funding of the initial Revolving Loan and LaSalle's  co-signing
as applicant for the initial Letter of Credit are subject to the satisfaction or
waiver on or before the Closing Date of the following conditions precedent:

                  (i)  LaSalle  shall  have  received  each  of the  agreements,
         opinions,   reports,  approvals,   consents,   certificates  and  other
         documents  which it requests  in its  discretion,  including  those set
         forth on the closing document list attached hereto as Schedule 15(a)(i)
         (the "Closing Agenda");

                                       31
<PAGE>

                  (ii) Since  September  30, 1997,  no event shall have occurred
         which  has had or  could  reasonably  be  expected  to have a  Material
         Adverse Effect, as determined by LaSalle in its sole discretion;

                  (iii) LaSalle shall have received  payment in full of all fees
         and expenses payable to it by Borrower on or before the Closing Date;

                  (iv) LaSalle  shall have  determined  that  immediately  after
         giving effect to (A) the making of the initial Revolving Loan requested
         to be made on the Closing Date,  (B) the issuance of the initial Letter
         of Credit, if any, requested to be made on the Closing Date and (C) the
         payment or  reimbursement  by Borrower of LaSalle for all closing costs
         and expenses incurred in connection with the transactions  contemplated
         hereby,  (D) the closing of the transactions  provided for in the Asset
         Purchase Agreement and all related  agreements,  and (E) the payment by
         Borrower of all  payments,  costs,  fees and  expenses  relating to the
         Asset Purchase Agreement and the transactions  provided for therein and
         in all related  agreements,  including but not limited to all severance
         and other  payments to terminated  employees,  on a pro forma basis the
         Excess  Availability  of Borrower  shall not be less than Five  Hundred
         Thousand Dollars ($500,000);

                  (v) LaSalle shall have received a certificate  from Borrower's
         chief executive officer or chief financial  officer,  pursuant to which
         such officer shall certify that in calculating the Excess  Availability
         described in clause (iv) above,  none of Borrower's  outstanding  trade
         payables were (and are) past due 30 days or more;

                  (vi) LaSalle shall  continue to be satisfied  with the assets,
         books, records, financial and business conditions of Borrower;

                  (vii)  LaSalle   shall  have  entered  into  a   subordination
         agreement satisfactory to LaSalle with Scitex which subordination shall
         cover not less than one million six hundred  fifteen  thousand  dollars
         ($1,615,000) of indebtedness;

                  (viii)  Borrower shall have received no less than $1.5 million
         in new cash equity capital;


                  (ix) The  transaction  shall have  received  LaSalle's  credit
         approval;

                  (x)  Borrower  shall  have its  completed  acquisition  of the
         assets of Scitex  Digital Video,  Inc.  LaSalle shall have reviewed and
         approved  all  terms,  conditions,   and  documents  relating  to  such
         acquisition and any related transactions; and

                                       32
<PAGE>

                  (xi) LaSalle shall have determined in its sole discretion that
         the  fair  saleable   value  of  Borrower's   assets  will  exceed  its
         liabilities  as of the funding of the initial  Revolving  Loan and that
         Borrower will have sufficient  working capital to pay its debts as they
         become due.

         (b) After the Closing Date, the making of any requested  Revolving Loan
or LaSalle's co-signing as applicant for any requested Letter of Credit shall be
subject to the  satisfaction of the conditions  precedent set forth below.  Each
such request shall constitute a representation and warranty that such conditions
are satisfied:

                  (i)  All  representations  and  warranties  contained  in this
         Agreement and the Other  Agreements shall be true and correct on and as
         of  the  date  of  such   request,   as  if  then   made,   other  than
         representations and warranties that relate solely to an earlier date;

                  (ii) No Default or Event of Default  shall have  occurred,  or
         would  result from the making of the  requested  Revolving  Loan or the
         issuance of the requested Letter of Credit,  which has not been waived;
         and

                  (iii) Since the Closing Date, no event has occurred  which has
         had or could reasonably be expected to have a Material Adverse Effect.

     16.  DEFAULT.  The  occurrence of any one or more of the  following  events
shall constitute an "Event of Default" hereunder:

         (a) the failure of any Obligor to pay when due, or when declared due by
LaSalle in accordance with the terms hereof, any of the Liabilities;

         (b) the failure of any  Obligor to perform,  keep or observe any of the
covenants, conditions, promises, agreements or obligations of such Obligor under
this Agreement or any of the Other Agreements;

         (c)  the  making  or  furnishing  by  any  Obligor  to  LaSalle  of any
representation,  warranty, certificate,  schedule, report or other communication
within or in  connection  with this  Agreement  or the  Other  Agreements  or in
connection with any other agreement  between such Obligor and LaSalle,  which is
untrue or misleading  in any respect,  or the failure of any Obligor to perform,
keep or observe any of the  covenants,  conditions,  promises,  or agreements of
such Obligor under any other agreement with any Person if such failure has or is
reasonably likely to have a Material Adverse Effect;

         (d) the creation (whether  voluntary or involuntary) of, or any attempt
to create, any lien or other encumbrance upon any of the Collateral,  other than
the Permitted  Liens, or the making or any attempt to make any levy,  seizure or
attachment thereof;

                                       33
<PAGE>

         (e) the commencement of any proceedings (i) in bankruptcy by or against
any Obligor,  (ii) for the liquidation or reorganization  of any Obligor,  (iii)
alleging  that  such  Obligor  is  insolvent  or unable to pay its debts as they
mature,  or (iv) for the  readjustment  or arrangement  of any Obligor's  debts,
whether under the United States  Bankruptcy Code or under any other law, whether
state or federal,  now or hereafter  existing for the relief of debtors,  or the
commencement of any analogous statutory or non-statutory  proceedings  involving
any Obligor; provided, however, that if such commencement of proceedings against
such  Obligor is  involuntary,  such  action  shall not  constitute  an Event of
Default unless such  proceedings are not dismissed within thirty (30) days after
the commencement of such proceedings;

         (f) the  appointment of a receiver or trustee for any Obligor,  for any
of the  Collateral or for any  substantial  part of any Obligor's  assets or the
institution  of any  proceedings  for the  dissolution,  or the full or  partial
liquidation,  or  the  merger  or  consolidation,  of  any  Obligor  which  is a
corporation or a partnership;  provided,  however,  that if such  appointment or
commencement  of proceedings  against such Obligor is  involuntary,  such action
shall not constitute an Event of Default unless such  appointment is not revoked
or such  proceedings  are not  dismissed  within  thirty  (30)  days  after  the
commencement of such proceedings;

         (g) the entry of any judgment or order in excess of $50,000 against any
Obligor which remains  unsatisfied or undischarged and in effect for thirty (30)
days after such entry without a stay of enforcement or execution;

         (h) the occurrence of an event of default  under,  or the revocation or
termination of, any agreement,  instrument or document executed and delivered by
any Person to LaSalle  pursuant to which such Person has  guaranteed  to LaSalle
the payment of all or any of the  Liabilities or has granted  LaSalle a security
interest  in or lien  upon some or all of such  Person's  real  and/or  personal
property to secure the payment of all or any of the Liabilities, or the death of
any such Person;

         (i) the occurrence of an event of default under any other  agreement or
instrument  evidencing  indebtedness  for  borrowed  money in excess of  $25,000
executed or delivered by Borrower or pursuant to which  agreement or  instrument
Borrower or its properties is or may be bound;

         (j) a Change of Control shall have occurred; or

         (k) the occurrence of a material adverse change in Borrower's business,
assets,  prospects or financial condition,  or the occurrence of any other event
or  condition  which  has or is  reasonably  likely to have a  Material  Adverse
Effect.

         Notwithstanding anything contained in this paragraph 16 or contained in
any other  provision of this Agreement or Other  Agreements to the contrary,  in
the event of the institution of any proceedings described in paragraphs 16(e) or
16(f) hereof  against  Borrower,  LaSalle may cease to make advances to Borrower
during the thirty (30) day grace periods provided in paragraphs 16(e) and 16(f).

                                       34
<PAGE>

     17. REMEDIES UPON AN EVENT OF DEFAULT.

         (a) Upon the occurrence of an Event of Default  described in paragraphs
16(e)  and  16(f)  hereof,   all  of  the  Liabilities   shall  immediately  and
automatically become due and payable, without notice or demand of any kind. Upon
the occurrence of any other Event of Default, all of the Liabilities may, at the
option of LaSalle,  and without demand,  notice or legal process of any kind, be
declared, and immediately shall become, due and payable.

         (b) Upon the  occurrence  of an Event of Default,  LaSalle may exercise
from time to time any  rights and  remedies  available  to it under the  Uniform
Commercial Code and any other applicable law in addition to, and not in lieu of,
any rights and  remedies  expressly  granted in this  Agreement or in any of the
Other  Agreements  and all of LaSalle's  rights and remedies shall be cumulative
and non-exclusive to the extent permitted by law. In particular,  but not by way
of limitation of the foregoing,  LaSalle may,  without  notice,  demand or legal
process  of any  kind,  take  possession  of any  or all of the  Collateral  (in
addition to Collateral of which it already has  possession),  wherever it may be
found,  and for that purpose may pursue the same  wherever it may be found,  and
may enter into any of Borrower's  premises  where any of the  Collateral may be,
and search for, take possession of, remove, keep and store any of the Collateral
until the same shall be sold or otherwise  disposed  of, and LaSalle  shall have
the  right  to store  the same at any of  Borrower's  premises  without  cost to
LaSalle. At LaSalle's request,  Borrower shall, at Borrower's expense,  assemble
the  Collateral  and make it  available  to LaSalle at one or more  places to be
designated  by  LaSalle  and  reasonably  convenient  to LaSalle  and  Borrower.
Borrower recognizes that if Borrower fails to perform,  observe or discharge any
of its Liabilities  under this Agreement or the Other  Agreements,  no remedy at
law will provide  adequate  relief to LaSalle,  and Borrower agrees that LaSalle
shall be entitled to temporary and permanent  injunctive relief in any such case
without the necessity of proving actual  damages.  Any  notification of intended
disposition of any of the Collateral  required by law will be deemed  reasonably
and  properly  given if  given at least  ten  (10)  calendar  days  before  such
disposition. Any proceeds of any disposition by LaSalle of any of the Collateral
may be applied by LaSalle to the  payment of  expenses  in  connection  with the
Collateral  including,   without  limitation,   legal  expenses  and  reasonable
attorneys'  fees (both  in-house  and outside  counsel)  and any balance of such
proceeds  may  be  applied  by  LaSalle  toward  the  payment  of  such  of  the
Liabilities,  and in such order of application, as LaSalle may from time to time
elect.

     18.  INDEMNIFICATION.  Borrower  agrees to defend (with counsel  reasonably
satisfactory to LaSalle),  protect,  indemnify and hold harmless  LaSalle,  each
affiliate  or  subsidiary  of LaSalle,  and each of their  respective  officers,
directors,  employees,  attorneys and agents (each an "Indemnified  Party") from
and against any and all liabilities,  obligations,  losses, damages,  penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature (including,  without limitation,  the disbursements and the reasonable
fees of counsel for each Indemnified Party in connection with any investigative,
administrative  or judicial  proceeding,  whether or not the  Indemnified  Party
shall be designated a party  thereto),  which may be imposed on, incurred by, or
asserted   against,   any  Indemnified   Party  (whether  direct,   indirect  or
consequential  and  whether  based  on any  federal,  state  or  local  laws  or

                                       35
<PAGE>

regulations  including,  without  limitation,   securities,   environmental  and
commercial  laws and  regulations,  under  common law or in equity,  or based on
contract  or  otherwise)  in any  manner  relating  to or  arising  out of  this
Agreement or any Other  Agreement,  or any act, event or transaction  related or
attendant thereto, the Collateral, the making and the management of the Loans or
any Letters of Credit or the use or intended use of the proceeds of the Loans or
any  Letters of Credit;  provided,  however,  that  Borrower  shall not have any
obligation  hereunder to any Indemnified Party with respect to matters caused by
or resulting  solely from the willful  misconduct  or gross  negligence  of such
Indemnified  Party. To the extent that the undertaking to indemnify set forth in
the preceding  sentence may be unenforceable  because it is violative of any law
or public policy,  Borrower shall satisfy such undertaking to the maximum extent
permitted by applicable law. Any liability,  obligation,  loss, damage, penalty,
cost or expense  covered  by this  indemnity  shall be paid to each  Indemnified
Party on demand,  and,  failing prompt  payment,  shall,  together with interest
thereon at the highest rate then  applicable to Revolving  Loans  hereunder from
the date incurred by each Indemnified Party until paid by Borrower,  be added to
the Liabilities of Borrower and be secured by the Collateral.  The provisions of
this  paragraph  18 shall  survive  the  satisfaction  and  payment of the other
Liabilities and the termination of this Agreement.

     19.  NOTICES.  All written  notices and other written  communications  with
respect to this  Agreement  shall be sent by  ordinary,  certified  or overnight
mail,  by telecopy or delivered in person,  and in the case of LaSalle  shall be
sent to it at One  Centerpointe  Drive,  Suite 100,  Lake Oswego,  Oregon 97035,
Attention:  Robert C. Alexander (if by telecopy to (503)  684-4665),  and in the
case of Borrower shall be sent to Borrower at its principal place of business as
set  forth  on the  first  page of  this  Agreement  (if by  telecopy  to  (650)
327-2511); provided, however, that either party may designate another address or
contact  person for itself from time to time by notice given as provided in this
paragraph.

     20. CHOICE OF GOVERNING LAW AND CONSTRUCTION.  This Agreement and the Other
Agreements  are  submitted by Borrower to LaSalle for  LaSalle's  acceptance  or
rejection  as an offer by  Borrower to borrow  monies from  LaSalle now and from
time to time  hereafter,  and  shall  not be  binding  upon  LaSalle  or  become
effective  until accepted by LaSalle,  in writing.  THIS AGREEMENT AND THE OTHER
AGREEMENTS SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF
OREGON AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN
ALL OTHER RESPECTS,  INCLUDING, WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST
RATE AND OTHER CHARGES,  BUT EXCLUDING  PERFECTION OF THE SECURITY  INTERESTS IN
THE  COLLATERAL,  WHICH  SHALL BE  GOVERNED  AND  CONTROLLED  BY THE LAWS OF THE
RELEVANT  JURISDICTION.  If any provision of this Agreement  shall be held to be
prohibited  by  or  invalid  under  applicable  law,  such  provision  shall  be
ineffective  only to the  extent  of such  prohibition  or  invalidity,  without
invalidating  the  remainder of such  provision or remaining  provisions of this
Agreement.

     21. FORUM  SELECTION  AND SERVICE OF PROCESS.  To induce  LaSalle to accept
this Agreement,  Borrower irrevocably agrees that, subject to LaSalle's sole and
absolute 

                                       36
<PAGE>

election, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT,  ARISING OUT
OF OR FROM OR RELATED TO THIS AGREEMENT,  THE OTHER AGREEMENTS OR THE COLLATERAL
SHALL BE  LITIGATED  IN  COURTS  HAVING  SITUS  WITHIN  CLACKAMAS  OR  MULTNOMAH
COUNTIES,  STATE  OF  OREGON.  BORROWER  HEREBY  CONSENTS  AND  SUBMITS  TO  THE
JURISDICTION OF ANY LOCAL,  STATE OR FEDERAL COURTS LOCATED WITHIN SAID COUNTIES
AND STATE. Borrower waives personal service of any process and consents that all
such service of process may be made by certified mail, return receipt requested,
directed to Borrower at the address indicated in LaSalle's records;  and service
so made shall be complete five (5) days after the same has been deposited in the
U.S.  mail.  BORROWER  HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE
THE VENUE OF ANY LITIGATION  BROUGHT  AGAINST  BORROWER BY LASALLE IN ACCORDANCE
WITH THIS PARAGRAPH.

     22.  MODIFICATION  AND BENEFIT OF AGREEMENT.  This  Agreement and the Other
Agreements  may not be  modified,  altered or amended  except by an agreement in
writing  signed by  Borrower  and  LaSalle.  Borrower  may not  sell,  assign or
transfer  this  Agreement,  or  the  Other  Agreements  or any  portion  thereof
including,  without limitation,  Borrower's rights, titles, interest,  remedies,
powers or  duties  thereunder.  Borrower  hereby  consents  to  LaSalle's  sale,
assignment,  transfer  or other  disposition,  at any time and from time to time
hereafter,  of  this  Agreement,  or the  Other  Agreements,  or of any  portion
thereof,  or participations  therein including,  without  limitation,  LaSalle's
rights, titles, interests,  remedies, powers and/or duties thereunder.  Borrower
agrees that it shall  execute and deliver such  documents as LaSalle may request
in connection with any such sale, assignment, transfer or other disposition.

     23.  HEADINGS  OF  SUBDIVISIONS.  The  headings  of  subdivisions  in  this
Agreement  are for  convenience  of  reference  only,  and shall not  govern the
interpretation of any of the provisions of this Agreement.

     24.  POWER  OF  ATTORNEY.   Borrower   acknowledges  and  agrees  that  its
appointment  of LaSalle  as its  attorney  and  agent-in-fact  for the  purposes
specified in this Agreement is an appointment coupled with an interest and shall
be irrevocable  until all of the Liabilities are paid in full and this Agreement
is terminated.

     25. WAIVER OF JURY TRIAL; OTHER WAIVERS.

         (a) LASALLE AND  BORROWER  HEREBY  WAIVE ALL RIGHTS TO TRIAL BY JURY IN
ANY  ACTION  OR  PROCEEDING  WHICH  PERTAINS  DIRECTLY  OR  INDIRECTLY  TO  THIS
AGREEMENT,  ANY OF THE OTHER AGREEMENTS,  THE LIABILITIES,  THE COLLATERAL,  ANY
ALLEGED TORTIOUS  CONDUCT OF BORROWER OR LASALLE OR WHICH, IN ANY WAY,  DIRECTLY
OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN BORROWER AND
LASALLE.  IN NO EVENT SHALL

                                       37
<PAGE>

LASALLE BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.

         (b) BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND
PRIOR TO THE EXERCISE BY LASALLE OF ITS RIGHTS TO REPOSSESS  THE  COLLATERAL  OF
BORROWER  WITHOUT  JUDICIAL  PROCESS  OR TO  REPLEVY,  ATTACH  OR LEVY UPON SUCH
COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.

         (c) Borrower hereby waives demand,  presentment,  protest and notice of
nonpayment with respect to any promissory note or other instrument,  and further
waives the benefit of all valuation, appraisal and exemption laws.

         (d) LaSalle's failure, at any time or times hereafter,  to exercise any
of its rights or remedies  (including the right to establish  reserves or adjust
advance rates) or to require strict  performance by Borrower of any provision of
this  Agreement  or any of the  Other  Agreements  shall  not  waive,  affect or
diminish any right of LaSalle  thereafter to exercise such rights or remedies or
to demand strict compliance and performance therewith.  Any suspension or waiver
by LaSalle of an Event of Default under this  Agreement or any default under any
of the Other  Agreements  shall not suspend,  waive or affect any other Event of
Default  under  this  Agreement  or any  other  default  under  any of the Other
Agreements,  whether the same is prior or subsequent  thereto and whether of the
same or of a different kind or character. No delay on the part of LaSalle in the
exercise  of any right or remedy  under this  Agreement  or any Other  Agreement
shall  preclude other or further  exercise  thereof or the exercise of any other
right or remedy. None of the undertakings, agreements, warranties, covenants and
representations  of Borrower  contained  in this  Agreement  or any of the Other
Agreements  and no Event of Default under this Agreement or default under any of
the Other Agreements shall be deemed to have been suspended or waived by LaSalle
unless  such  suspension  or waiver is in writing,  signed by a duly  authorized
officer of LaSalle and  directed  to  Borrower  specifying  such  suspension  or
waiver.

     26.  ADVERTISING.  Subject to  Borrower's  prior  consent,  LaSalle may use
Borrower's name and trade names, together with variants of such name and related
logotypes in advertising  promoting LaSalle and the business transaction between
LaSalle and  Borrower  through  the use of  so-called  "tombstones"  and similar
publicity.  Borrower  hereby  releases  LaSalle  and its  parent,  subsidiaries,
affiliates,  officers,  employees  and  advertising  agents,  from  any  and all
liability  to Borrower  arising out of or related to the  exercise of the rights
granted to LaSalle in this section.

                                       38
<PAGE>

     27.  BORROWER'S  ACKNOWLEDGMENT.  Borrower hereby  acknowledges that it has
read and  fully  understands  and  accepts  this  Agreement  and each and  every
provision  hereof.  Borrower  acknowledges  that  this  Agreement  and the Other
Agreements  have been  prepared  by Tonkon Torp LLP on behalf of, and as counsel
for, LaSalle.  Borrower further acknowledges that it has had a full and adequate
opportunity to have this Agreement  reviewed by other  attorneys of its choosing
and by all such other  professionals  of its  choosing  as  Borrower  has deemed
appropriate.

         UNDER OREGON LAW, MOST  AGREEMENTS,  PROMISES AND  COMMITMENTS  MADE BY
LASALLE  AFTER  OCTOBER 3, 1989,  CONCERNING  LOANS AND OTHER CREDIT  EXTENSIONS
WHICH ARE NOT FOR PERSONAL,  FAMILY OR HOUSEHOLD  PURPOSES OR SECURED  SOLELY BY
THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY LASALLE TO BE ENFORCEABLE.


                                   ACCOM, INC.



                                   By:      /s/ Junaid Sheikh                  
                                      -----------------------------------------

                                   Title:   CEO           
                                           ------------------------------------


                                   LASALLE BUSINESS CREDIT, INC.



                                   By:     /s/ Robert Alexander
                                      -----------------------------------------

                                   Title:  V.P.      
                                           ------------------------------------


                                       39
<PAGE>

                                                        
                             STOCK PLEDGE AGREEMENT


                  THIS STOCK PLEDGE AGREEMENT, dated as of December 10, 1998, is
made by ACCOM,  INC.,  a  corporation  organized  under the laws of the state of
Delaware  ("Pledgor"),  in favor of LASALLE BUSINESS CREDIT, INC., a corporation
organized under the laws of the state of Delaware ("Lender").

                                    RECITALS

                  A. Lender has entered  into,  or is preparing to enter into, a
Loan and Security Agreement with Pledgor.  Such Loan and Security Agreement,  as
it now exists or may  hereafter be amended,  modified,  supplemented,  extended,
renewed,  restated or replaced,  is referred to herein as the "Loan  Agreement."
Capitalized  terms not otherwise defined herein shall have the meanings provided
in the Loan Agreement.

                  B. As a condition to the making of Loans and the  provision of
other  financial  accommodations  pursuant  to  the  Loan  Agreement  and  Other
Agreements,  Lender  requires  that  Pledgor  pledge and grant to Lender a first
priority  security interest in all of the capital stock of Accom Virtual Studio,
Inc., a Delaware  corporation  ("AVS"),  Accom  Europe,  Ltd., a United  Kingdom
corporation,  Accom International,  Inc., a Barbados corporation,  Accom Virtual
Studio GmbH, a German  corporation ("AVS GmbH"),  ELSET  Electronic-Set  GmbH, a
German  corporation,  which  is  owned  by  AVS  and  AVS  GmbH,  Accom  Poland,
s.p.z.o.o.,  a Polish  corporation,  which is  owned by AVS  (collectively,  the
"Subsidiaries").

                                    AGREEMENT

                  Therefore, for valuable consideration, receipt and sufficiency
of which are acknowledged, Pledgor and Lender have agreed as follows:

                  1.  Pledge.   To  secure   payment  and   performance  of  the
Liabilities  described  in  Section  2 below,  Pledgor  hereby  irrevocably  and
unconditionally  pledges,  assigns,  hypothecates  and transfers to Lender,  and
grants to  Lender a first and prior  pledge  and  security  interest  in (a) all
shares  of  capital  stock  of each and  every  one of the  Subsidiaries  now or
hereafter owned beneficially or of record by Pledgor,  including but not limited
to the shares described in Exhibit A attached hereto,  (b) all proceeds thereof,
and (c) all distributions,  dividends,  increases and profits received therefrom
(collectively, the "Collateral").

                  2.  Liabilities  Secured.  The Collateral shall secure payment
and performance of the following (collectively, the "Liabilities"):

                           a. All  Revolving  Loans and all  other  obligations,
         liabilities  and  indebtedness  of every kind,  nature and  description
         owing by Pledgor to Lender and/or its affiliates,  including principal,
         interest, charges, fees, costs and expenses, however evidenced, whether
         as principal, surety, endorser, guarantor or otherwise, whether arising

<PAGE>

         under  the  Loan  Agreement  or  otherwise,  whether  now  existing  or
         hereafter arising,  whether arising before, during or after the initial
         or any renewal term of the Loan Agreement or after the  commencement of
         any case with  respect to Pledgor  under the United  States  Bankruptcy
         Code or any similar  statute  (including  the  payment of interest  and
         other   amounts   which  would  accrue  and  become  due  but  for  the
         commencement  of such case,  whether or not such amounts are allowed or
         allowable  in  whole  or in part  in  such  case),  whether  direct  or
         indirect,  absolute or  contingent,  joint or several,  due or not due,
         primary or secondary, liquidated or unliquidated, secured or unsecured,
         and however acquired by Lender; and

                           b. All  costs  incurred  by Lender  to  enforce  this
         Agreement, the Loan Agreement and the Other Agreements,  and the pledge
         and security interest granted hereby,  to collect the Liabilities,  and
         to maintain,  preserve,  collect and enforce the Collateral,  including
         without limitation taxes, assessments, attorneys' fees, and expenses of
         sale.

                  3.  Representations  and  Warranties.  Pledgor  represents and
warrants that (a) it is the sole legal and beneficial  owner of the  Collateral;
(b) it has full power, authority and legal right to execute, deliver and perform
this Agreement;  (c) the shares of stock pledged  hereunder are duly authorized,
validly issued, fully paid and nonassessable; and (d) the pledge, assignment and
delivery of the  Collateral  create a valid first and prior  perfected  security
interest  in the  Collateral,  and no  other  security  agreement  covering  the
Collateral,  or any part  thereof,  has been  made,  and no pledge  or  security
interest,  other than the one herein created,  has attached or been perfected in
the  Collateral or in any part  thereof.  The delivery at any time by Pledgor to
Lender of Collateral shall  constitute a representation  and warranty by Pledgor
under  this  Agreement  that,  with  respect to such  Collateral,  and each item
thereof,  Pledgor is the sole legal and beneficial owner of the Collateral,  and
that the matters warranted in this paragraph are then true and correct.

                  4.  Covenants.

                           a.  Affirmative  Covenants.   Pledgor  covenants  and
         agrees (i) promptly to deliver to Lender all instruments, certificates,
         documents or agreements evidencing any of the Collateral, together with
         executed stock powers or assignments in form  acceptable to Lender with
         respect to all shares of capital stock included in the Collateral; (ii)
         from time to time  promptly  to execute  and deliver to Lender all such
         other assignments,  certificates,  supplemental  writings and financing
         statements,  and do all other acts or things,  as Lender may request in
         order more fully to  evidence  and perfect the  security  interest  and
         pledge  herein  created or to effect the  purposes  of this  Agreement;
         (iii) promptly to furnish Lender with any information or writings which
         Lender may request  concerning the Collateral;  (iv) to allow Lender to
         inspect all records of Pledgor relating to the Collateral,  and to make
         and take away copies of such  records,  at Pledgor's  expense,  at such
         reasonable times and as often as may be reasonably requested by Lender;
         (v)   promptly  to  notify   Lender  of  any  change  in  any  fact  or
         circumstances  warranted or represented by Pledgor in this Agreement or
         in any other writings furnished by or on 

                                       2
<PAGE>

         behalf of Pledgor to Lender in connection with the Collateral; and (vi)
         promptly to notify Lender of any claim, action or proceeding  affecting
         title to the  Collateral,  or any part  thereof,  or Lender's  interest
         therein,  and,  at the request of Lender,  to appear in and defend,  at
         Pledgor's expense, any such action or proceeding.

                           b. Negative  Covenants.  Pledgor covenants and agrees
         that  Pledgor  will not (i) sell,  assign or transfer  any of Pledgor's
         rights in the  Collateral;  (ii) create any other security  interest or
         pledge in,  mortgage on, or otherwise  encumber the  Collateral  or any
         part thereof,  or permit the same to be or become  subject to any lien,
         attachment, execution, sequestration, other legal or equitable process,
         or any encumbrance of any kind or character; or (iii) cause, permit, or
         suffer to be taken any action that would cause Pledgor to own less than
         100  percent  of  the   outstanding   capital   stock  of  any  of  the
         Subsidiaries.

                  5. Rights to Dividends and Distributions. With respect to such
instruments which are stock certificates,  bonds or other securities, Lender may
demand of the corporate  obligor  issuing the same,  and may receive and receipt
for,  any and all stock  dividends  and  other  distributions  (other  than cash
dividends) payable in respect thereof, whether ordinary or extraordinary. Lender
shall have the  authority,  following an Event of Default and without  notice to
Pledgor, to have such certificates,  bonds or other securities registered either
in Lender's  name or in the name of a nominee.  If,  while this  Agreement is in
effect,  Pledgor  shall  become  entitled to receive or shall  receive any stock
certificate (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification,  increase or
reduction of capital, or issued in connection with any  reorganization),  option
or rights,  whether as an addition to, in substitution of, as a conversion of or
in exchange for any of the  Collateral,  or otherwise,  Pledgor agrees to accept
the same as  Lender's  agent  and to hold the same in trust on behalf of and for
the benefit of Lender,  and to deliver the same forthwith to Lender in the exact
form received, with appropriate undated stock powers, duly executed in blank, to
be held by Lender, subject to the terms hereof, as additional Collateral for the
Liabilities.  Until an Event of Default  shall have  occurred,  Pledgor shall be
entitled to receive all cash dividends paid in respect of the Collateral.  After
the  occurrence  of an Event of  Default,  Lender  shall be entitled to all cash
dividends,  and to any sums paid upon or in respect of the  Collateral  upon the
liquidation,  dissolution or reorganization of the issuer thereof which shall be
paid to Lender to be held by it as additional Collateral for the Liabilities. In
case any distribution shall be made on or in respect of the Collateral  pursuant
to the  reorganization,  liquidation or dissolution of the issuer  thereof,  the
property  so  distributed  shall  be  delivered  to  Lender  to be held by it as
additional  Collateral for the Liabilities.  After an Event of Default, all sums
of money and property so paid or distributed in respect of the Collateral  which
are received by Pledgor  shall,  until paid or  delivered to Lender,  be held by
Pledgor in trust as additional Collateral for the Liabilities.

                  6. Preservation of Collateral.  Lender shall not have any duty
to fix or preserve rights against prior parties to the Collateral, nor be liable
for any delay in the  collection  of, or failure to use diligence to collect on,
the Liabilities or any amount payable in respect of the Collateral.

                                       3
<PAGE>

                  7.  Performance by Lender.  Should Pledgor fail to perform any
covenant,  duty or  agreement  of Pledgor in  accordance  with the terms of this
Agreement,  Lender may,  but shall not be  obligated  to,  perform or attempt to
perform such  covenant,  duty or agreement on behalf of Pledgor,  and any amount
expended by Lender in such performance or attempted  performance  shall become a
part of the Liabilities, shall be payable upon demand and shall bear interest at
a per annum rate equal to the highest rate payable under the Loan Agreement.

                  8. Voting Rights.  It is expressly  understood and agreed that
Pledgor shall retain all voting rights with respect to the Collateral  until the
occurrence  of an Event of  Default,  at which  time such  voting  rights  shall
transfer to Lender, at its sole discretion; provided, however, that no voting or
corporate  rights  shall  be  exercised,   vote  cast,  or  consent,  waiver  or
ratification  given or action taken by Pledgor that would impair the  Collateral
or be inconsistent  with or violate any provision of this Agreement or any Other
Agreements.

                  9. Power of Attorney.  PLEDGOR  HEREBY  IRREVOCABLY  GRANTS TO
LENDER PLEDGOR'S PROXY (EXERCISABLE FROM AND AFTER THE OCCURRENCE OF AN EVENT OF
DEFAULT  WHICH  IS  CONTINUING)  TO VOTE  ANY  COLLATERAL  AND  APPOINTS  LENDER
PLEDGOR'S ATTORNEY-IN-FACT WITH POWER OF SUBSTITUTION TO PERFORM ALL LIABILITIES
OF  PLEDGOR  UNDER  THIS  AGREEMENT  AND  TO  EXERCISE  ALL OF  LENDER'S  RIGHTS
HEREUNDER.  THE  PROXY AND  POWER OF  ATTORNEY  HEREIN  GRANTED  (INCLUDING  ANY
EVIDENCED  BY  A  SEPARATE  WRITING)  ARE  COUPLED  WITH  AN  INTEREST  AND  ARE
IRREVOCABLE PRIOR TO FINAL PAYMENT IN FULL OF THE LIABILITIES.

                  10.  Rights and Remedies.  Upon the  occurrence of an Event of
Default,  in addition to any and all other rights and remedies  which Lender may
then have  hereunder,  under  any  Other  Agreements,  under  applicable  law or
otherwise,  Lender at its option may,  subject to any  limitation or restriction
imposed by any  applicable  bankruptcy,  insolvency or other law relating to the
relief of debtors, (a) obtain from any Person information regarding Pledgor, any
issuer of the Collateral, or any of their businesses, which information any such
Person may furnish  without  liability to Pledgor;  (b) require  Pledgor to give
possession or control of any of the  Collateral  to Lender;  (c) take control of
funds  generated by the Collateral and any other proceeds and exercise all other
rights which an owner of such  Collateral  may exercise;  (d) declare the entire
unpaid balance of principal and interest of the Liabilities  immediately due and
payable,  without  notice,  demand or  presentment,  which are hereby  expressly
waived;  (e) reduce its claim to judgment,  foreclose  or otherwise  enforce its
security interest in all or any part of the Collateral by any available judicial
procedure; (f) after notification, if any, provided for in this Agreement or any
Other  Agreements,  sell or otherwise dispose of, at the office of Lender, or at
such other location as Lender may select, all or any part of the Collateral, and
any such sale or other  disposition  shall be in accordance with applicable law,
and may be as a unit or in parcels, by public or private proceedings, and by way
of one or more  contracts  (it  being  agreed  that  the sale of any part of the
Collateral  shall not exhaust Lender's power of sale, but sales may be made from
time to time until all of the Collateral has been sold or until the  Liabilities
have  been paid in full),  and at any such  sale it shall  not be  necessary  to
exhibit  the  Collateral;  (g) at  its  discretion,  retain  the  Collateral  in
satisfaction of the Liabilities  whenever the circumstances are such that Lender
is 

                                       4
<PAGE>

entitled  to  do  so under  applicable  law; (h) apply by  appropriate  judicial
proceedings  for  appointment  of a  receiver  for the  Collateral,  or any part
hereof,  and Pledgor hereby consents to any appointment;  (i) buy the Collateral
at any public sale; and (j) buy the  Collateral at any private sale,  subject to
any  restrictions  imposed by applicable law.  Pledgor agrees that, if notice is
required to be given by applicable  law, 20 days' advance  written  notice shall
constitute reasonable notice. Lender shall apply the proceeds of any collection,
sale, disposition or other realization upon any Collateral as follows:

                           First,  to the  payment of the costs and  expenses of
                  such  collection,  sale,  disposition,  or other  realization,
                  including  reasonable  out-of-pocket  costs  and  expenses  of
                  Lender and the fees and expenses of its agents and counsel;

                           Next, to the payment of the Liabilities; and

                           Finally, to the payment to Pledgor, or its successors
                  or  assigns,  or as a  court  of  competent  jurisdiction  may
                  direct, of any surplus then remaining.

If the proceeds of  collection,  sale,  disposition,  or other  realization  are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Liabilities, Pledgor shall be liable for any deficiency.

                  11.      Securities Laws; Transfer.

                           a.  Immediately  upon  the  occurrence  of a Event of
         Default,  Pledgor  hereby  grants  to  Lender  the  right  to have  the
         Collateral,  or any  portion  thereof,  registered  and sold  under the
         Securities  Act of 1933, as amended  ("Securities  Act"),  or under any
         applicable  state blue sky laws. If Lender shall  determine to exercise
         its right to sell any or all of the  Collateral  pursuant  to the terms
         hereof,  and if in the reasonable  opinion of Lender it is necessary or
         advisable to have the Collateral  (or that portion  thereof to be sold)
         registered  under the  provisions of the Securities  Act,  Pledgor will
         cause the issuer of the  Collateral  to execute and deliver,  and cause
         the  directors  and  officers  thereof to execute  and deliver all such
         instruments and documents, and to do or cause to be done all such other
         acts and  things  as may be  necessary  or,  in the  opinion  of Lender
         advisable,  to register  such  Collateral  under the  provisions of the
         Securities Act and to cause the registration statement relating thereto
         to become  effective  and to remain  effective for a period of one year
         from the date of the first public offering of such Collateral,  or that
         portion  thereof to be sold, and to make all amendments  thereto and/or
         to  the  related  prospectus  which,  in the  opinion  of  Lender,  are
         necessary or advisable,  all in  conformity  with the  requirements  of
         applicable  law.  Pledgor  shall be liable  for any costs and  expenses
         incurred in connection with the registration of the Collateral pursuant
         to this  paragraph  (a).  Pledgor  agrees  to cause  the  issuer of the
         Collateral  to comply with the  provisions  of the  securities or "blue
         sky" laws of any jurisdiction which Lender shall designate and to cause
         the issuer of the Collateral to make available to its security holders,
         as soon as  practicable,  an earnings  statement which will satisfy the
         provisions of Section 11(a) of the Securities Act.

                                       5
<PAGE>

                           b.  Pledgor  recognizes  that Lender may be unable to
         effect a  public  sale of any or all of the  Collateral  by  reason  of
         certain  prohibitions  contained in the  Securities  Act and applicable
         state  securities  laws,  but may be compelled to resort to one or more
         private sales thereof to a restricted  group of purchasers  who will be
         obliged to agree,  among other things,  to acquire such  Collateral for
         their  own  account  for   investment  and  not  with  a  view  to  the
         distribution or resale thereof.  Pledgor  acknowledges  and agrees that
         any such private  sale  conducted  in the manner  described  herein may
         result in prices and other terms less  favorable  to the seller than if
         such sale were a public sale.  Lender shall be under no  obligation  to
         delay a sale of any of the  Collateral for the period of time necessary
         to permit the issuer of the Collateral to register such  Collateral for
         public  sale  under  the  Securities  Act,  or under  applicable  state
         securities laws, even if the issuer of the Collateral would agree to do
         so.

                           c. Pledgor  further  agrees to do or cause to be done
         all such other acts and things as may be necessary to make any sales of
         any portion or all of the Collateral pursuant to paragraphs (a) and (b)
         of this Section  valid and binding and in  compliance  with any and all
         applicable laws (including, without limitation, the Securities Exchange
         Act  of  1934,  as  amended,  and  the  rules  and  regulations  of the
         Securities and Exchange Commission  applicable  thereto),  regulations,
         orders,  writs,  injunctions,  decrees or awards of any and all courts,
         arbitrators  or  governmental  instrumentalities,  domestic or foreign,
         having jurisdiction over any such sale or sales. Pledgor further agrees
         that a breach of any of the  covenants  contained  in this section will
         cause  irreparable  injury to Lender  and that  Lender  may not have an
         adequate  remedy at law in respect of such  breach.  As a  consequence,
         Pledgor agrees that each and every  covenant  contained in this section
         shall be  specifically  enforceable  against  Pledgor.  Pledgor  hereby
         waives  and agrees  not to assert  any  defenses  against an action for
         specific performance of such covenants.

                           d. Pledgor agrees (i) that in the event Lender shall,
         upon any Event of Default,  sell the Collateral or any portion thereof,
         at a private  sale or sales,  Lender  shall have the right to rely upon
         the  advice  and  opinion  of  a  member  of  a  nationally  recognized
         investment  banking  firm  acceptable  to Lender,  as to the best price
         reasonably obtainable upon such a private sale thereof, and (ii) in the
         absence of fraud,  willful  misconduct and gross negligence,  that such
         reliance  shall be conclusive  evidence that Lender handled such matter
         in a commercially reasonable manner under the Uniform Commercial Code.

                  12. Notice.  Notification  of the time and place of any public
sale of the Collateral,  or reasonable  notification of the time after which any
private sale or other  intended  disposition  of the  Collateral  is to be made,
shall be sent to Pledgor and to any other Person  entitled under  applicable law
to notice.

                  13. Lender's Duties.  The powers conferred on Lender hereunder
are solely to protect its interest in the  Collateral  and Lender shall not have
any duty to  exercise  any such  powers.  Except  for the  safe  custody  of any
Collateral in its possession and the accounting for monies actually  received by
it hereunder, Lender shall have no duty as to any Collateral, as to

                                       6
<PAGE>

ascertaining  or taking  action with respect to calls,  conversions,  exchanges,
maturities, tenders, or other matters relative to any Collateral, whether or not
Lender has or is deemed to have  knowledge of such matters,  or as to the taking
of any  necessary  steps to preserve  rights  against prior parties or any other
rights  pertaining to any reasonable care in the custody and preservation of any
Collateral  in  its  possession  if  such   Collateral  is  accorded   treatment
substantially equal to that which Lender accords its own property. Except as set
forth herein, Lender shall not have any duty or liability to protect or preserve
any Collateral or to preserve rights  pertaining  thereto.  Nothing contained in
this Agreement shall be construed as requiring or obligating  Lender, and Lender
shall not be required or  obligated,  (a) to present or file any claim or notice
or take any action, with respect to any Collateral or in connection therewith or
(b) to notify Pledgor of any decline in the value of any Collateral.

                  14.  Cumulative  Rights.  All  rights and  remedies  of Lender
hereunder are  cumulative of each other and of every other right or remedy which
Lender may  otherwise  have at law or in equity or under any other  contract  or
other writing for the  enforcement  of the pledge and security  interest  herein
granted or the  collection of the  Liabilities,  and the exercise of one or more
rights or remedies  shall not  prejudice or impair the  concurrent or subsequent
exercise of other rights or remedies.

                  15. Waiver.  Should any part of the  Liabilities be payable in
installments,  the  acceptance  at any  time and  from  time to time of  partial
payment of the aggregate  amount of all  installments  then matured shall not be
deemed a waiver of any Event of Default  then  existing.  No waiver by Lender of
any Event of  Default  shall be  deemed  to be a waiver of any other  subsequent
Event of  Default,  nor  shall  any such  waiver  by  Lender  be  deemed to be a
continuing  waiver.  No delay or omission by Lender in  exercising  any right or
power hereunder,  or under any Other Agreements,  shall impair any such right or
power or be construed as a waiver thereof or an acquiescence  therein, nor shall
any single or partial  exercise  of any such  right or power  preclude  other or
further exercise thereof,  or the exercise of any other right or power of Lender
hereunder or under such other writings.

                  16. Interest: Limitation of Law. No provision herein or in any
Other  Agreements shall require the payment or permit the collection of interest
in excess of the maximum  permitted by  applicable  law. If, in any  contingency
whatsoever,  Lender shall receive anything of value from Pledgor deemed interest
under  applicable  law  which  would  exceed  the  maximum  amount  of  interest
permissible under applicable law, the pertinent provisions of the Loan Agreement
shall govern.

                  17. Parties Bound.  This Agreement shall be binding on Pledgor
and its  successors and assigns,  and shall inure to the benefit of Lender,  and
its successors and assigns;  provided,  however, that Pledgor may not assign its
rights or delegate its Liabilities  hereunder  without the prior written consent
of Lender.  The rights,  powers and  interests  held by Lender  hereunder may be
transferred  and assigned by Lender,  in whole or in part, at such time and upon
such terms as permitted by the Loan Agreement.

                                       7
<PAGE>

                  18. Notice.  Except as otherwise provided herein, notice shall
be deemed effective if sent by certified mail, return receipt requested, postage
prepaid, or by a reputable commercial overnight delivery service, to the address
of Pledgor given on the signature page below.

                  19. Waivers by Pledgor. Pledgor waives all rights of appraisal
or valuation and waives any  requirement  that Lender  exhaust any right or take
any action against any other Person or any collateral or pursue any other remedy
in Lender's power whatsoever before exercising its rights under this Agreement.

                  20.  Modifications.  No provision  hereof shall be modified or
limited  except by a written  agreement  expressly  referring  hereto and to the
provisions so modified or limited and signed by Lender.

                  21.  Pledge  Absolute.  The pledge,  assignment  and  security
interest granted pursuant to this Agreement shall be absolute and  unconditional
irrespective of, and shall not be impaired, modified or otherwise affected by:

                           a. the taking or accepting  of any other  security or
         guaranty for any or all of the Liabilities;

                           b. any increase,  reduction or payment at any time or
         from time to time of any part of the Liabilities;

                           c. any lack of validity or enforceability of the Loan
         Agreement  or  any  of the  Other  Agreements  or  other  agreement  or
         instrument   relating  thereto,   including  but  not  limited  to  the
         unenforceability of all or any part of the Liabilities by reason of the
         fact that (i) the Liabilities, and/or the interest paid or payable with
         respect  thereto,  exceeds the amount permitted by applicable law, (ii)
         the act of creating  the  Liabilities,  or any part  thereof,  is ultra
         vires,  (iii)  the  officers  creating  same  acted in  excess of their
         authority, or (iv) for any other reason;

                           d. any lack of  corporate  power  of  Pledgor  or any
         other  Person at any time  liable for the  payment of any or all of the
         Liabilities;

                           e.  any   insolvency,   bankruptcy,   reorganization,
         receivership  or other  proceeding  under any  applicable  liquidation,
         conservatorship,  bankruptcy,  moratorium,  arrangement,  receivership,
         insolvency, reorganization, or similar laws from time to time in effect
         affecting  the rights of  creditors  generally  (collectively,  "Debtor
         Relief Laws") involving Pledgor or the issuer of any of the Collateral;

                           f. any renewal, compromise,  extension,  acceleration
         or other  change in the time,  manner or place of payment of, or in any
         other  term  of,  all  or  any  of  the  Liabilities;  any  adjustment,
         indulgence,  forbearance, or compromise that may be granted or given by
         Lender to Pledgor,  or any Person at any time liable for the payment of
         any or

                                       8
<PAGE>

         all of the Liabilities; or any other modification, amendment, or waiver
         of or any consent to departure from the Loan  Agreement,  or any of the
         Other  Agreements  and  any  other  agreement  or  instrument  relating
         thereto;

                           g. any exchange,  release,  sale,  subordination,  or
         non-perfection   of  any   collateral   or  any  lack  of  validity  or
         enforceability or change in priority,  destruction,  reduction, or loss
         or impairment of value of any collateral;

                           h. any release or  amendment  or waiver of or consent
         to departure from any guaranty for all or any of the Liabilities;

                           i. the  failure by Lender to make any demand  upon or
         to bring any legal,  equitable,  or other action against Pledgor or any
         other  Person,  or the  failure or delay by Lender to, or the manner in
         which Lender  shall,  proceed to exhaust  rights  against any direct or
         indirect security for the Liabilities;

                           j. any  failure  of Lender to notify  Pledgor  of any
         renewal,  extension,  or  assignment  of the  Liabilities  or any  part
         thereof,  or the release of any security,  or of any other action taken
         or refrained from being taken by any Lender; or

                           k.  any  payment  by  Pledgor  to  Lender  is held to
         constitute a preference under any Debtor Relief Law or if for any other
         reason  Lender is  required  to refund  such  payment or pay the amount
         thereof to another Person.

                  22.   Governing   Law.  The   validity,   interpretation   and
enforcement  of this Agreement and any dispute  arising out of the  relationship
between the parties  hereto,  whether in contract,  tort,  equity or  otherwise,
shall be governed by the internal  laws of the State of Oregon  (without  giving
effect to principles of conflicts of law).

                  23.  Jurisdiction.  Pledgor and Lender irrevocably consent and
submit to the  jurisdiction  of the  Circuit  Courts of the State of Oregon  for
Multnomah  County and Clackamas  County and the United States District Court for
the  District  of Oregon  and waive  any  objection  based on venue or forum non
conveniens  with respect to any action  instituted  therein  arising  under this
Agreement or in any way connected  with or related or incidental to the dealings
of the parties hereto in respect of this Agreement or the  transactions  related
hereto or thereto,  in each case whether now existing or hereafter arising,  and
whether in contract,  tort, equity or otherwise, and agree that any dispute with
respect to any such matters  shall be heard only in the courts  described  above
(except  that  Lender  shall  have the right to bring any  action or  proceeding
against  Pledgor or its property in the courts of any other  jurisdiction  which
Lender deems  necessary or  appropriate in order to realize on the Collateral or
to otherwise enforce its rights against Pledgor or its property).

                  24. Service. Pledgor hereby waives personal service of any and
all  process  and  consents  that all such  service  of  process  may be made by
certified  mail (return  receipt  requested)  directed to Pledgor's  address set
forth on the  signature  page hereof,  and service so made shall be deemed to be
completed  five (5) days after the same shall have been so deposited 

                                       9
<PAGE>

in the U.S. mails, or, at Lender's option,  by service upon Pledgor in any other
manner  provided  under the rules of any such  courts.  Within  thirty (30) days
after such  service,  Pledgor  shall appear in answer to such  process,  failing
which  Pledgor  shall be deemed in default and judgment may be entered by Lender
against Pledgor for the amount of the claim and other relief requested.

                  25. Jury Trial  Waiver.  PLEDGOR AND LENDER EACH HEREBY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,  DEMAND,  ACTION OR CAUSE OF ACTION (i)
ARISING  UNDER THIS  AGREEMENT OR (ii) IN ANY WAY  CONNECTED  WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR
THE TRANSACTIONS  RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT,  TORT, EQUITY OR OTHERWISE.  PLEDGOR
AND LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,  DEMAND,  ACTION
OR CAUSE OF  ACTION  SHALL BE  DECIDED  BY COURT  TRIAL  WITHOUT A JURY AND THAT
PLEDGOR OR LENDER MAY FILE AN ORIGINAL  COUNTERPART  OR A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN  EVIDENCE OF THE CONSENT OF THE PARTIES  HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

                  26.  Limitation  of  Liability.  Lender  shall  not  have  any
liability  to Pledgor  (whether in tort,  contract,  equity or  otherwise),  for
losses  suffered by Pledgor in  connection  with,  arising out of, or in any way
related to the transactions or relationships  contemplated by this Agreement, or
any act,  omission  or event  occurring  in  connection  herewith,  unless it is
determined  by a final and  non-appealable  judgment or court  order  binding on
Lender,  that the losses  resulted  solely from acts or  omissions  constituting
gross negligence or willful misconduct. In any such litigation,  Lender shall be
entitled  to the  benefit of the  rebuttable  presumption  that it acted in good
faith and with the  exercise of ordinary  care in the  performance  by it of the
terms of this Agreement.

                  27. Entire Agreement. THIS AGREEMENT,  TOGETHER WITH THE OTHER
AGREEMENTS,  REPRESENTS THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
BETWEEN THE PARTIES.

                         (Signatures on following page.)

                                       10
<PAGE>



                  IN WITNESS  WHEREOF,  Pledgor  and Lender have  executed  this
Pledge Agreement as of the date first above written.

                                  ACCOM, INC.


                                  By: /s/ Junaid Sheikh      
                                     ----------------------------------

                                  Title: CEO
                                        -------------------------------

                                  Address of Pledgor:

                                  1490 O'Brien Drive
                                  Menlo Park, CA 94025


                                  LASALLE BUSINESS CREDIT, INC.


                                  By: /s/ Robert Alexander
                                     ----------------------------------

                                  Title: V.P.
                                        -------------------------------

                                  Address of Lender:

                                  One Centerpointe Drive, Suite 100
                                  Portland, OR 97035

<PAGE>

                            REVOLVING PROMISSORY NOTE


Amount $7,500,000                                              December 10, 1998


                  FOR VALUE RECEIVED, the Undersigned (jointly and severally, if
more than one)  promises to pay to the order of LASALLE  BUSINESS  CREDIT,  INC.
(hereinafter,  together with any holder hereof,  called "LaSalle"),  at the main
office of the LaSalle,  the principal sum of SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS  ($7,500,000) plus the aggregate unpaid principal amount of all advances
made by LaSalle to the Undersigned  pursuant to and in accordance with Paragraph
2 of the Loan Agreement (as hereinafter  defined) in excess of such amount,  or,
if less, the aggregate  unpaid  principal amount of all advances made by LaSalle
to the  Undersigned  pursuant to and in accordance  with Paragraph 2 of the Loan
Agreement. The Undersigned further promise(s) to pay interest on the outstanding
principal  amount  hereof on the dates  and at the  rates  provided  in the Loan
Agreement from the date hereof until payment in full hereof.

                  This  Revolving  Promissory  Note  is  referred  to in and was
delivered  pursuant to that certain Loan and  Security  Agreement,  as it may be
amended from time to time,  together with all exhibits  thereto,  dated December
10, 1998, between LaSalle and the Undersigned (the "Loan Agreement").  All terms
which are  capitalized  and used  herein and (which  are not  otherwise  defined
herein) shall have the meanings ascribed to such terms in the Loan Agreement.

                  Prior  to  maturity,  principal  hereunder  shall  be  payable
pursuant to the terms of the Loan Agreement. This Note shall immediately mature,
and the full remaining  balance hereof shall become  immediately due and payable
without  demand,  upon the earlier of the  expiration or termination of the Loan
Agreement or the acceleration of the liabilities of the Undersigned  pursuant to
terms of the Loan Agreement.

                  The  Undersigned  hereby  authorize(s)  LaSalle  to charge any
account of the  Undersigned  for all sums due  hereunder.  If payment  hereunder
becomes due and payable on a Saturday, Sunday or legal holiday under the laws of
the United States or the State of Oregon, the due date thereof shall be extended
to the next  succeeding  business day, and interest shall be payable  thereon at
the rate  specified  during such  extension.  Credit shall be given for payments
made in the manner and at the times  provided in the Loan  Agreement.  It is the
intent  of the  parties  that the rate of  interest  and  other  charges  to the
Undersigned  under this Note shall be lawful;  therefore,  if for any reason the
interest or other  charges  payable  hereunder are found by a court of competent
jurisdiction,  in a final  determination,  to exceed the limit which LaSalle may
lawfully  charge the  Undersigned,  then the obligation to pay interest or other
charges  shall  automatically  be reduced  to such  limit and,  if any amount in
excess of such limit shall have been paid, then such amount shall be refunded to
the Undersigned.

                  Principal of this Note may only be prepaid if the  Undersigned
pays a prepayment fee as provided in the Loan Agreement.
<PAGE>

                  The  Undersigned  waive(s)  the  benefit of any law that would
otherwise  restrict  or limit  LaSalle in the  exercise  of its right,  which is
hereby acknowledged,  to set-off against the Liabilities,  without notice and at
any time hereafter,  any indebtedness matured or unmatured owing from LaSalle to
the Undersigned. The Undersigned waive(s) every defense,  counterclaim or setoff
which  the  Undersigned  may now have or  hereafter  may have to any  action  by
LaSalle  in  enforcing  this Note  and/or  any of the other  Liabilities,  or in
enforcing  LaSalle's rights in the Collateral and ratifies and confirms whatever
LaSalle may do pursuant to the terms hereof and of the Loan  Agreement  and with
respect to the  Collateral  and agrees that LaSalle  shall not be liable for any
error or omission  unless caused by or resulting from the willful  misconduct or
gross negligence of LaSalle.

                  The  Undersigned,  any other party  liable with respect to the
Liabilities and any and all endorsers and accommodation parties, and each one of
them,  if more  than  one,  waive  any and all  presentment,  demand,  notice of
dishonor,  protest,  and all other  notices and demands in  connection  with the
enforcement of LaSalle's rights hereunder.

                  THIS NOTE SHALL BE GOVERNED  AND  CONTROLLED  BY THE  INTERNAL
LAWS  OF THE  STATE  OF  OREGON  AS TO  INTERPRETATION,  ENFORCEMENT,  VALIDITY,
CONSTRUCTION,  EFFECT, AND IN ALL OTHER RESPECTS,  INCLUDING WITHOUT LIMITATION,
THE LEGALITY OF THE INTEREST RATE AND OTHER  CHARGES,  and shall be binding upon
the  Undersigned  and the  Undersigned's  successors  and assigns.  If this Note
contains  any  blanks  when  executed  by the  Undersigned,  LaSalle  is  hereby
authorized,  without  notice to the  Undersigned,  to  complete  any such blanks
according  to the terms  upon  which the loan or loans  were  granted.  Wherever
possible,  each provision of this Note shall be interpreted in such manner as to
be effective and valid under  applicable  law, but if any provision of this Note
shall be prohibited by or be invalid  under such law,  such  provision  shall be
severable,  and  shall be  ineffective  to the  extent  of such  prohibition  or
invalidity,  without invalidating the remaining provisions of this Note. If more
than one party shall execute this Note,  the term  "Undersigned"  as used herein
shall mean all parties  signing  this Note,  and each one of them,  and all such
parties, their respective successors and assigns, shall be jointly and severally
obligated hereunder.

                  To induce LaSalle to make the loan evidenced by this Note, the
Undersigned  (i)  irrevocably  agree(s)  that,  subject  to  LaSalle's  sole and
absolute election,  all actions arising directly or indirectly as a result or in
consequence of this Note or any other agreement with LaSalle, or the Collateral,
shall be instituted  and  litigated  only in courts having situs in Clackamas or
Multnomah County,  Oregon, (ii) hereby consent(s) to the exclusive  jurisdiction
and venue of any State or  Federal  Court  located  and having its situs in said
counties,  and (iii) waive(s) any objection  based on forum  non-conveniens.  IN
ADDITION,  THE  UNDERSIGNED  HEREBY  WAIVE(S)  TRIAL  BY JURY IN ANY  ACTION  OR
PROCEEDING WHICH PERTAINS  DIRECTLY OR INDIRECTLY TO THIS NOTE, THE LIABILITIES,
THE COLLATERAL,  ANY ALLEGED  TORTIOUS  CONDUCT BY THE UNDERSIGNED OR LASALLE OR
WHICH IN ANY WAY,  DIRECTLY  OR  INDIRECTLY,  ARISES  OUT OF OR  RELATES  TO THE
RELATIONSHIP  BETWEEN THE 

                                       2
<PAGE>

UNDERSIGNED AND LASALLE,  waive(s) personal service of any and all process,  and
consent(s)  that all such  service of  process  may be made by  certified  mail,
return receipt  requested,  directed to the Undersigned at the address indicated
in LaSalle's records;  and service so made shall be complete five (5) days after
the same has been deposited in the U.S. mails as aforesaid.

                  As used herein,  all  provisions  shall include the masculine,
feminine,  neuter,  singular and plural thereof,  wherever the context and facts
require such construction and in particular the word  "Undersigned"  shall be so
construed.

                  IN WITNESS WHEREOF, each of the Undersigned, if more than one,
has executed this Note on the date above set forth.

                                   ACCOM, INC.


                                   By:      /s/ Junaid Sheikh      
                                       ----------------------------------------

                                   Title:   CEO            
                                           ------------------------------------


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