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[Logo]BANK OF AMERICA NT & SA                           BUSINESS LOAN AGREEMENT

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This Agreement dated as of August 21, 1997 is between Bank of America NT & 
SA (the "Bank") and Clarement Technology Group, Inc. (the "Borrower").

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

1.1    LINE OF CREDIT AMOUNT.

(a)    During the availability period described below, the Bank will provide 
       a line of credit to the Borrower. The amount of the line of credit (the
       "Facility 1 Commitment") is Two Million Dollars ($2,000,000).

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

(c)    The Borrower agrees not to permit the outstanding principal balance of 
       the line of credit plus the outstanding amounts of any standby letters of
       credit to exceed the Facility 1 Commitment.

1.2    AVAILABILITY PERIOD. The line of credit is available between the date 
       of this Agreement and September 1, 1999 the "Facility 1 Expiration
       Date") unless the Borrower is in default.

1.3    INTEREST RATE.

(a)    Unless the Borrower elects an optional interest rate as described 
       below, the interest rate is the Reference Rate plus .25 percentage point.

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

1.4    REPAYMENT TERMS.

(a)    The Borrower will pay interest on September 1, 1997, and then monthly 
       thereafter until payment in full of any principal outstanding under this
       line of credit.

(b)    The Borrower will repay in full all principal and any unpaid interest 
       or other charges outstanding under this line of credit no later than the
       Facility 1 Expiration Date.

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


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1.6   OFFSHORE RATE. The Borrower may elect to have all or portions of the
principal balance of the line of credit bear interest at the Offshore Rate 
plus 2.0 percentage points.

Designation of an Offshore Rate portion is subject to the following 
requirements:

(a)   The interest period during which the Offshore Rate will be in effect 
      will be no shorter than 30 days and no longer than one year. The last day
      of the interest period will be determined by the Bank using the practices
      of the offshore dollar inter-bank market.

(b)   Each Offshore Rate portion will be for an amount not less than One 
      Hundred Thousand Dollars ($100,000).

(c)   The "Offshore Rate" means the interest rate determined by the following 
      formula, rounded upward to the nearest 1/100 of one percent. (All amounts
      in the calculation will be determined by the Bank as of the first day of
      the interest period.)

      Offshore Rate =       Grand Cayman Rate
                       ---------------------------
                       (1.00 - Reserve Percentage)


      Where,

      (i)     "Grand Cayman Rate" means the interest rate (rounded upward to 
              the nearest 1/16th of one percent) at which the Bank's Grand
              Cayman, Branch Grand Cayman British West Indies, would offer U.S. 
              dollar deposits for the applicable interest period to other major
              banks in the offshore dollar inter-bank market.

      (ii)    "Reserve Percentage" means the total of the maximum reserve 
              percentages for determining the reserves to be maintained by
              member banks of the Federal Reserve System for Eurocurrency 
              Liabilities, as defined in the Federal Reserve Board Regulation
              D, rounded upward to the nearest 1/100 of one percent. The 
              percentage will be expressed as a decimal, and will include,
              but not be limited to, marginal, emergency, supplemental, special,
              and other reserve percentages.

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

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

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

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

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

(g)   The Bank will have no obligation to accept an election for an Offshore 
      Rate portion if any of the following described events has occurred and is
      continuing:

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      (i)     Dollar deposits in the principal amount, and for periods equal 
              to the interest period, of an Offshore Rate portion are not 
              available in the offshore Dollar inter-bank market; or

      (ii)    the Offshore Rate does not accurately reflect the cost of an 
              Offshore Rate portion.

1.7   LIBOR RATE.  The Borrower may elect to have all or portions of the 
principal balance of the line of credit bear interest at the LIBOR Rate plus 
2.0 percentage points.

Designation of a LIBOR Rate portion is subject to the following requirements:

(a)   The interest period during which the LIBOR Rate will be in effect will 
      be 30, 60, 90, 180 or 365 days. The last day of the interest period 
      will be determined by the Bank using the practices of the London 
      inter-bank market.

(b)   Each LIBOR Rate portion will be an amount not less than One Hundred 
      Thousand Dollars ($100,000).

(c)   The Borrower shall irrevocably request a LIBOR Rate portion no later 
      than 9:00 a.m. San Francisco time three (3) banking days before the 
      commencement of the interest period.

(d)   The "LIBOR Rate" means the interest rate determined by the following 
      formula, rounded upward to the nearest 1/100 of one percent. (All 
      amounts in the calculation will be determined by the Bank as of the 
      first day of the interest period.)

      LIBOR Rate =             London Rate
                              ---------------------------
                              (1.00 - Reserve Percentage)


      Where,

      (i)     "London Rate" means the interest rate (rounded upward to the 
              nearest 1/16th of one percent) at which the Bank of America 
              NT & SA's London Branch, London, Great Britain, would offer
              U.S. dollar deposits for the applicable interest period to other
              major banks in the London inter-bank market at approximately 
              11:00 a.m. London time two (2) banking days before the 
              commencement of the interest period.

      (ii)    "Reserve Percentage" means the total of the maximum reserve 
              percentages for determining the reserves to be maintained by the
              member banks of the Federal Reserve System for Eurocurrency 
              Liabilities, as defined in the Federal Reserve Board Regulation
              D, rounded upward to the nearest 1/100 of one percent. The 
              percentage will be expressed as a decimal, and will include, 
              but not be limited to, marginal, emergency, supplemental, 
              special, and other reserve percentages.

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

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

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

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

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

(h) The Bank will have no obligation to accept the election for LIBOR Rate 
    portion if any of the following described events has occurred and is 
    continuing:

    (i)       Dollar deposits in the principal amount, and for periods equal 
              to the interest period, of a LIBOR Rate portion are not 
              available in the London inter-bank market; or

    (ii)      the LIBOR Rate does not accurately reflect the cost of a LIBOR 
              Rate portion.

1.8 LETTERS OF CREDIT.  At the request of the Borrower, between the date of 
this Agreement and September 1, 1999, (the "Expiration Date"), the Bank will 
issue standby letters of credit with a maximum maturity of one year, up to 
365 days beyond the Expiration Date; provided, however, that the maturity 
date may be automatically extended each year for an additional year unless 
the Bank gives written notice to the contrary.

The amount of outstanding letters of credit, including amounts drawn on 
letters of credit and not yet reimbursed, may not exceed at any one time 
Seven Hundred Fifty Thousand Dollars ($750,000). The Borrower agrees:

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

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

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

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

(e) to pay any issuance and/or other fees that the Bank notifies the Borrower 
    will be charged for issuing and processing letters of credit for the 
    Borrower.

2.  FACILITY NO. 2: TERM LOAN AMOUNT AND TERMS

2.1 OUTSTANDING TERM LOAN.  There is outstanding from the Bank to the 
Borrower a term loan in the original principal amount of Five Hundred 
Thousand Dollars ($500,000). This term loan is currently subject to the terms 
and conditions of Facility No. 2 of the Business Loan Agreement dated April 
24, 1995. As of the date of this Agreement, the term loan shall be deemed to 
be outstanding under Facility No. 2 of this Agreement, and shall be subject to 
all the terms and conditions stated in this Agreement.

2.2 INTEREST RATE.  Unless the Borrower elects an optional interest rate as 
described below, the interest rate is the Reference Rate plus .5 percentage 
point.

2.3 REPAYMENT TERMS.

(a) The Borrower will repay principal and interest in Ten successive monthly 
    installments of Fifteen Thousand Six Hundred Seventy-Nine and 72/100 
    Dollars ($15,679.72) starting September 10, 1997. On May 11, 1998, the 
    Borrower will repay the remaining principal balance plus any interest then 
    due.

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

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

2.5 LONG TERM RATE. The Borrower may elect to have all or portions of the 
principal balance of the loan bear interest at the Long Term Rate, subject to 
the following requirements:

(a) The interest period during which the Long Term Rate will be in effect 
    will be one year or more.

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

(c) Each Long Term Rate portion will be for an amount not less than One 
    Hundred Thousand Dollars ($100,000).

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

(e) The Borrower may prepay the Long Term Rate portion in whole or in part 
    in the minimum amount of One Hundred Thousand Dollars ($100,000). The 
    Borrower will give the Bank irrevocable written notice of the Borrower's 
    intention to make the prepayment, specifying the date and amount of the 
    prepayment. The notice must be received by the Bank at least 5 banking days 
    in advance of the prepayment. All prepayments of principal on the Long Term 
    Rate portion will be applied on the most remote principal installment or 
    installments then unpaid.

(f) Each prepayment of a Long Term Rate portion, whether voluntary, by 
    reason of acceleration or otherwise, will be accompanied by payment of all 
    accrued interest on the amount of the prepayment and the prepayment fee 
    described below.

(g) The prepayment fee will be the sum of fees calculated separately for each 
    Prepaid Installment, as follows:

     (i) The Bank will first determine the amount of interest which would 
         have accrued each month for the Prepaid Installment had it remained 
         outstanding until the applicable Original Payment Date, using the 
         Long Term Rate;

    (ii) The Bank will then subtract from each monthly interest amount 
         determined in (i), above, the amount of interest which would accrue for
         that Prepaid Installment if it were reinvested from the date of 
         prepayment through the Original Payment Date, using the following rate:

         (A) If the Original Payment Date is more than 5 years after the date of
             prepayment: the Treasury Rate plus one-quarter of one percentage 
             point;

         (B) If the Original Payment Date is 5 years or less after the date of 
             prepayment: the Money Market Rate.

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    (iii) If (i) minus (ii) for the Prepaid Installment is greater than 
          zero, the Bank will discount the monthly differences to the date of
          prepayment by the rate used in (ii) above. The sum of the discounted 
          monthly differences is the prepayment fee for that Prepaid 
          Installment.

(h) The following definitions will apply to the calculation of the prepayment
    fee:

    "Money Market" means the domestic certificate of deposit market, the 
    eurodollar deposit market or other appropriate money market 
    selected by the Bank.
    
    "Money Market Rate" means the fixed interest rate per annum which the 
    Bank determines could be obtained by reinvesting a specified Prepaid 
    Installment in the Money Market from the date of prepayment through the 
    Original Payment Date.

    "Original Payment Dates" mean the dates on which principal of the Long 
    Term Rate portion would have been paid if there had been no prepayment. 
    If a portion of the principal would have been paid later than the end of 
    the interest period in effect at the time of prepayment, then the 
    Original Payment Date for that portion will be the last day of the 
    interest period.
    
    "Prepaid Installment" means the amount of the prepaid principal of the 
    Long Term Rate portion which would have been paid on a single Original 
    Payment Date.
    
    "Treasury Rate" means the interest rate yield for U.S. Government 
    Treasury Securities which the Bank determines could be obtained by 
    reinvesting a specified Prepaid Installment in such securities from the 
    date of prepayment through the Original Payment Date.
    
(i) The Bank may adjust the Treasury Rate and Money Market Rate to 
    reflect the compounding, accrual basis, or other costs of the Long Term 
    Rate portion. Each of the rates is the Bank's estimate only and the Bank 
    is under no obligation to actually reinvest any prepayment. The rates 
    will be based on information from either the Telerate or Reuters 
    information services, The Wall Street Journal, or other information 
    sources the Bank deems appropriate.

3. FACILITY NO. 3 TERM LOAN AMOUNT AND TERMS

3.1 OUTSTANDING TERM LOAN. There is outstanding from the Bank to the Borrower 
a term loan in the original principal amount of Two Million Dollars 
($2,000,000). This term loan is currently subject to the terms and conditions 
of Facility No. 3 of the Business Loan Agreement dated April 24, 1995. As of 
the date of this Agreement, the term loan shall be deemed to be outstanding 
under Facility No. 3 of this Agreement, and shall be subject to all the terms 
and conditions stated in this Agreement.

3.2 INTEREST RATE. The interest rate is the Reference Rate plus 1.0 
percentage point.

3.3 REPAYMENT TERMS.

(a) The Borrower will repay principal, interest and any other amounts 
    due, upon demand by the Bank, in the event of any default by a Nominee 
    Borrower.

(b) The Borrower may prepay each term loan in full or in part at any 
    time. Each prepayment will be applied to the most remote installment of 
    principal due under such term loan.

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3.4 NOMINEE BORROWER. At the Bank's sole option, during the availability 
    period described in 3.2 of the original Business Loan Agreement dated April 
    24, 1995, the Borrower may designate certain individuals, each of whom shall
    be an Executive or officer of the Borrower, to whom the Bank may provide a 
    36 month term loan. The amount of any extension of credit to a Nominee 
    Borrower shall reduce the amount of the Facility 3 Commitment. Each such 
    Nominee Borrower shall execute a note and any other documents required by 
    the Bank, all in form and substance satisfactory to the Bank, evidencing 
    each term loan. Each note and term loan shall be guaranteed by the Borrower.

3.5 NOMINEE BORROWER TERM. The Bank and each Nominee Borrower shall execute 
    a note and any other documents required by the Bank. The documents shall 
    provide that the term of each term loan shall not exceed 36 months. The 
    Borrower will be required to make periodic interest payments and periodic 
    defined principal reductions. The term loans to the Nominee Borrowers shall 
    be unsecured but will be supported by a guaranty of the Borrower.

4. FACILITY NO. 4: TERM LOAN AMOUNT AND TERMS

4.1 OUTSTANDING TERM LOAN. There is outstanding from the Bank to the Borrower 
a term loan in the original principal amount of Five Hundred Thousand Dollars 
($500,000). This term loan is currently subject to the terms and conditions 
of Facility No. 4 of the Business Loan Agreement dated April 24, 1995. As of 
the date of this Agreement, the term loan shall be deemed to be outstanding 
under Facility No. 4 of this Agreement, and shall be subject to all the terms 
and conditions stated in this Agreement.

4.2 INTEREST RATE. Unless the Borrower elects an optional interest rate as 
described below, the interest rate is the Reference Rate plus .5 percentage 
point.

4.3 REPAYMENT TERMS. 

(a) The Borrower will pay all accrued but unpaid interest on the 1st day of 
    each month and upon payment in full of the principal of this loan.

(b) The Borrower will repay principal in 15 successive equal monthly 
    installments of Thirteen Thousand Eight Hundred Eighty-Eight and 89/100 
    (13,888.89) starting September 1, 1997. On November 2, 1998, the Borrower
    will repay the remaining principal balance plus any interest then due.

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

4.5 LONG TERM RATE. The Borrower may elect to have all or portions of the 
principal balance of the loan bear interest at the Long Term Rate, subject to 
the following requirements:

(a) The interest period during which the Long Term Rate will be in effect 
    will be one year or more.

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

(c) Each Long Term Rate portion will be for an amount not less than One 
    Hundred Thousand Dollars ($100,000).


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

(e) The Borrower may prepay the Long Term Rate portion in whole or in part 
    in the minimum amount of One Hundred Thousand Dollars ($100,000). The 
    Borrower will give the Bank irrevocable written notice of the Borrower's 
    intention to make the prepayment, specifying the date and amount of the 
    prepayment. The notice must be received by the Bank at least 5 banking days 
    in advance of the prepayment. All prepayments of principal on the Long Term 
    Rate portion will be applied on the most remote principal installment or 
    installments then unpaid.

(f) Each prepayment of a Long Term Rate portion, whether voluntary, by 
    reason of acceleration or otherwise, will be accompanied by payment of all 
    accrued interest on the amount of the prepayment and the prepayment fee 
    described below.

(g) The prepayment fee will be the sum of fees calculated separately for each 
    Prepaid Installment, as follows:

    (i)  The Bank will first determine the amount of interest which would 
         have accrued each month for the Prepaid Installment had it remained 
         outstanding until the applicable Original Payment Date, using the Long
         Term Rate;

   (ii)  The Bank will then subtract from each monthly interest amount 
         determined in (i), above, the amount of interest which would accrue for
         that Prepaid Installment if it were reinvested from the date of 
         prepayment through the Original Payment Date, using the following rate:

         (A) If the Original Payment Date is more than 5 years after the date 
             of prepayment: the Treasury Rate plus one-quarter of one percentage
             point;

         (B) If the Original Payment Date is 5 years or less after the date of 
             prepayment: the Money Market Rate.

   (iii) If (i) minus (ii) for the Prepaid Installment is greater than 
         zero, the Bank will discount the monthly differences to the date of
         prepayment by the rate used in (ii) above. The sum of the discounted 
         monthly differences is the prepayment fee for that Prepaid Installment.

(h) The following definitions will apply to the calculation of the prepayment 
    fee:

    "Money Market" means the domestic certificate of deposit market, the 
    eurodollar deposit market or other appropriate money market selected by 
    the Bank.

    "Money Market Rate" means the fixed interest rate per annum which the 
    Bank determines could be obtained by reinvesting a specified Prepaid 
    Installment in the Money Market from the date of prepayment through the 
    Original Payment Date.

    "Original Payment Dates" mean the dates on which principal of the Long Term 
    Rate portion would have been paid if there had been no prepayment. If a 
    portion of the principal would have been paid later than the end of the 
    interest period in effect at the time of prepayment, then the Original 
    Payment Date for that portion will be the last day of the interest period.
    
    "Prepaid Installment" means the amount of the prepaid principal of 
    the Long Term Rate portion which would have been paid on a single Original 
    Payment Date.

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     "Treasury Rate" means the interest rate yield for U.S. Government Treasury 
     Securities which the Bank determines could be obtained by reinvesting a 
     specified Prepaid Installment in such securities from the date of
     prepayment through the Original Payment Date.

(i)  The Bank may adjust the Treasury Rate and Money Market Rate to reflect 
     the compounding, accrual basis, or other costs of the Long Term Rate 
     portion. Each of the rates is the Bank's estimate only and the Bank is 
     under no obligation to actually reinvest any prepayment. The rates will 
     be based on information from either the TELERATE or REUTERS information 
     services, THE WALL STREET JOURNAL, or other information sources the Bank 
     deems appropriate.

5.   FACILITY NO. 5: TERM LOAN AMOUNT AND TERMS

5.1  OUTSTANDING TERM LOAN.  There is outstanding from the Bank to the 
Borrower a term loan in the original principal amount of Two Million Dollars 
($2,000,000). This term loan is currently subject to the terms and conditions 
of Facility No. 5 of the Business Loan Agreement dated April 24, 1995. As of 
the date of this Agreement, the term loan shall be deemed to be outstanding 
under Facility No. 5 of this Agreement, and shall be subject to all the terms 
and conditions stated in this Agreement.

5.2  INTEREST RATE.  Unless the Borrower elects an optional interest rate as 
described below, the interest rate is the Reference Rate plus .5 percentage 
point.

5.3  REPAYMENT TERMS.

(a)  The Borrower will repay principal and interest in Twenty successive 
     monthly installments of Sixty Thousand Six Hundred Fifty-Nine and 47/100 
     ($60,659.47) starting September 1, 1997.

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

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

5.5  LONG TERM RATE.  The Borrower may elect to have all or portions of the 
principal balance of the loan bear interest at the Long Term Rate, subject to 
the following requirements:

(a)  The interest period during which the Long Term Rate will be in effect 
     will be one year or more.

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

(c)  Each Long Term Rate portion will be for an amount not less than One 
     Hundred Thousand Dollars ($100,000).

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

(e)  The Borrower may prepay the Long Term Rate portion in whole or in part 
     in the minimum amount of One Hundred Thousand Dollars ($100,000). The 
     Borrower will give the Bank irrevocable written notice of the Borrower's 
     intention to make the prepayment, specifying the date and amount of the 
     prepayment. The notice must be received by the Bank at least 5 banking 
     days in advance of the prepayment. All 

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     prepayments of principal on the Long Term Rate portion will be applied 
     on the most remote principal installment or installments then unpaid.

(f)  Each prepayment of a Long Term Rate portion, whether voluntary, by 
     reason of acceleration or otherwise, will be accompanied by payment of 
     all accrued interest on the amount of the prepayment and the prepayment 
     fee described below.

(g)  The prepayment fee will be the sum of fees calculated separately for 
     each Prepaid Installment, as follows:

     (i)    The Bank will first determine the amount of interest which would 
            have accrued each month for the Prepaid Installment had it remained 
            outstanding until the applicable Original Payment Date, using the 
            Long Term Rate;

     (ii)   The Bank will then subtract from each monthly interest amount 
            determined in (i), above, the amount of interest which would 
            accrue for that Prepaid Installment if it were reinvested from 
            the date of prepayment through the Original Payment Date, using 
            the following rate:

            (A)  If the Original Payment Date is more than 5 years after the 
                 date of prepayment: the Treasury Rate plus one-quarter of 
                 one percentage point;

            (B)  If the Original Payment Date is 5 years or less after the 
                 date of prepayment: the Money Market Rate.

     (iii)  If (i) minus (ii) for the Prepaid Installment is greater than 
            zero, the Bank will discount the monthly differences to the date 
            of prepayment by the rate used in (ii) above. The sum of the 
            discounted monthly differences is the prepayment fee for that 
            Prepaid Installment.

(h)  The following definitions will apply to the calculation of the prepayment 
     fee:

     "Money Market" means the domestic certificate of deposit market, the 
     eurodollar deposit market or other appropriate money market selected by 
     the Bank.

     "Money Market Rate" means the fixed interest rate per annum which the 
     Bank determines could be obtained by reinvesting a specified Prepaid 
     Installment in the Money Market from the date of prepayment through the 
     Original Payment Date.

     "Original Payment Dates" mean the dates on which principal of the Long 
     Term Rate portion would have been paid if there had been no prepayment. 
     If a portion of the principal would have been paid later than the end of 
     the interest period in effect at the time of prepayment, then the 
     Original Payment Date for that portion will be the last day of the 
     interest period.

     "Prepaid Installment" means the amount of the prepaid principal of the 
     Long Term Rate portion which would have been paid on a single Original 
     Payment Date.

     "Treasury Rate" means the interest rate yield for U.S. Government 
     Treasury Securities which the Bank determines could be obtained by 
     reinvesting a specified Prepaid Installment in such securities from the 
     date of prepayment through the Original Payment Date.

(i)  The Bank may adjust the Treasury Rate and Money Market Rate to reflect 
     the compounding, accrual basis, or other costs of the Long Term Rate 
     portion. Each of the rates is the Bank's estimate only and the Bank is 
     under no obligation to actually reinvest any prepayment. The rates will 
     be based on information from either the Telerate or Reuters information 
     services, The Wall Street Journal, or other information sources the Bank 
     deems appropriate.

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                                     -10-
<PAGE>

6.  FEES AND EXPENSES

6.1 UNUSED COMMITMENT FEE. The Borrower agrees to pay a fee on any difference 
    between the Facility 1 Commitment and the amount of credit it actually 
    uses, determined by the weighted average loan balance maintained during 
    the specified period. The fee will be calculated at .20% per year. This 
    fee is paid quarterly in arrears.

6.2 EXPENSES.

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

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

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

7.  COLLATERAL

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

(b) Receivables.

7.2 CASH COLLATERAL. (FACILITY 3). If the aggregate principal balance 
outstanding on the term loan described in 3.1 on August 10, 1997 exceeds 60% 
of the original aggregate balance of the term loans, the Borrower shall 
provide the Bank with cash collateral equal to the amount of the difference. 
The Borrower agrees to execute any documents which the Bank may require in 
order to perfect the Bank's security interest in such collateral.

8.  DISBURSEMENTS, PAYMENTS AND COSTS

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

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

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

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

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

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                                      -11-
<PAGE>
(d) evidenced by records kept by the Bank. In addition, the Bank may, at 
    its discretion, require the Borrower to sign one or more promissory notes.

8.3 TELEPHONE AUTHORIZATION.

(a) The Bank may honor telephone instructions for advances or repayments or for 
    the designation of optional interest rates signer(s) of this Agreement or 
    a person or persons authorized by the signer(s) of this Agreement on 
    Facility 1.
    
(b) Advances on Facility 1 will be deposited in and repayments will be withdrawn
    from the Borrower's account number 28013-00339, or such other accounts 
    with the Bank as designated in writing by the Borrower.

(c) The Borrower indemnifies and execuses the Bank (including its officers, 
    employees, and agents) for, from and against all liability, loss, and 
    costs in connection with any act resulting from telephone instructions it 
    reasonably believes are made by a signer of this Agreement or a person 
    authorized by a signer. This indemnity and excuse will survive this 
    Agreement's termination.
    
8.4 DIRECT DEBIT (PRE-BILLING)

(a) The Borrower agrees that the Bank will debit the Borrower's deposit account 
    number 28013-00339 (the "Designated Account") on the date each payment of 
    principal and interest and any fees from the Borrower becomes due (the 
    "Due Date"). If the Due Date is not a banking day, the Designated Account 
    will be debited on the next banking day.
    
(b) Approximately 10 days prior to the Due Date on Facility 1 Commitment, the 
    Bank will mail to the Borrower a statement of the amounts that will be 
    due on that Due Date (the "Billed Amount"). The calculation will be made 
    on the assumption that no new extensions of credit or payments will be 
    made between the date of the billing statement and the Due Date, and that 
    there will be no changes in the applicable interest rate.
    
(c) The Bank will debit the Designated Account for the Billed Amount, 
    regardless of the actual amount of principal due and interest accrued 
    (collectively, the "Accrued Amount").

    If the Billed Amount debited to the Designated Account differs from the 
    Accrued Amount, the discrepancy will be treated as follows:

    (i)  If the Billed Amount is less than the Accrued Amount, the Billed 
         Amount for the following Due Date will be increased by the amount of 
         the discrepancy. The Borrower will not be in default by reason of any 
         such discrepancy.

    (ii) If the Billed Amount is more than the Accrued Amount, the Billed 
         Amount for the following Due Date will be decreased by the amount of 
         the discrepancy.

    Regardless of any such discrepancy, interest will continue to accrue 
    based on the actual amount of principal outstanding without compounding. 
    The Bank will not pay the Borrower interest on any overpayment.
    
(d) The Borrower will maintain sufficient funds in the Designated Account to 
    cover each debit. If there are insufficient funds in the Designated 
    Account on the date the Bank enters any debit authorized by this 
    Agreement, the debit will be reversed.

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                                      -12-

<PAGE>

8.5  BANKING DAYS.  Unless otherwise provided in this Agreement, a banking 
day is a day other than a Saturday or a Sunday on which the Bank is open for 
business in Oregon and banks are open for business in California. For amounts 
bearing interest at an offshore rate (if any), a banking day is a day other 
than a Saturday or a Sunday on which the Bank is open for business in Oregon 
and the Bank is dealing in offshore dollars. All payments and disbursements 
which would be due on a day which is not a banking day will be due on the 
next banking day. All payments received on a day which is not a banking day 
will be applied to the credit on the next banking day.

8.6  TAXES.  The Borrower will not deduct any taxes from any payments it 
makes to the Bank. If any government authority imposes any taxes or charges 
on any payments made by the Borrower, the Borrower will pay the taxes or 
charges. Upon request by the Bank, the Borrower will confirm that it has paid 
the taxes by giving the Bank official tax receipts (or notarized copies) 
within 30 days after the due date. However, the Borrower will not pay the 
Bank's net income taxes.

8.7  ADDITIONAL COSTS.  The Borrower will pay the Bank, on demand, for the 
Bank's costs or losses arising from any statute or regulation, or any request 
or requirement of a regulatory agency. The costs and losses will be allocated 
to the loan in a manner determined by the Bank, using any reasonable method. 
The costs include the following:

(a)  any reserve or deposit requirements; and

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

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

8.9  INTEREST ON LATE PAYMENTS.  At the Bank's sole option in each instance, 
any amount not paid when due under this Agreement (including interest) shall 
bear interest from the due date at the Reference Rate plus 1.0 percentage 
point. This may result in compounding of interest.

8.10 DEFAULT RATE.  Upon the occurrence and during the continuation of any 
default under this Agreement, advances under this Agreement will at the 
option of the Bank bear interest at a rate per annum which is 1.0 percentage 
point higher than the rate of interest otherwise provided under this 
Agreement. This will not constitute a waiver of any event of default.

9.   CONDITIONS

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

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

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

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

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

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                                     -13-


<PAGE>

9.5   BORROWER'S GUARANTY.  Guaranty signed by the Borrower in the amount of 
the extension of credit to each Nominee Borrower.

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

10.   REPRESENTATIONS AND WARRANTIES

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

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

10.2  AUTHORIZATION.  This Agreement, and any instrument or agreement 
required hereunder, including the guaranty of loans to Nominee Borrowers, are 
within the Borrower's powers, have been duly authorized, and do not conflict 
with any of its organizational papers.

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

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

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

10.6  FINANCIAL INFORMATION.  All financial and other information that has 
been or will be supplied to the Bank, including the Borrower's financial 
statement dated as of March 31, 1997 is:

(a)   sufficiently complete to give the Bank accurate knowledge of the 
      Borrower's financial condition.

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

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

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

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

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

10.9  PERMITS, FRANCHISES.  The Borrower possesses all permits, memberships, 
franchises, contracts and licenses required and all trademark rights, trade 
name rights, patent rights and fictitious name rights necessary to enable it 
to conduct the business in which it is now engaged without conflict with the 
rights of others.

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

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                                     -14-

<PAGE>

10.11 INCOME TAX RETURNS. The Borrower has no knowledge of any pending 
assessments or adjustments of its income tax for any year, except as have 
been disclosed in writing to the Bank.

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

11.   COVENANTS

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

11.1  USE OF PROCEEDS.

(a)    To use the proceeds of the Facility 1 credit only for working capital.

(b)    To use the proceeds of the Facility 2 credit only for equipment 
       purchases.

(c)    To use the proceeds of the Facility 3 credit only for Nominee Borrower 
       term loans.

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

(a)    Within 90 days of the Borrower's fiscal year end, the Borrower's 
       annual 10K with audit.

(b)    Within 45 days of the quarter end, the Borrower's 10Q.

11.3  CURRENT RATIO. To maintain on a consolidated basis a ratio of current 
assets to current liabilities of at least 25:10.

For the purpose of this paragraph current assets shall consist of (i) cash, 
(ii) trade receivables, (iii) revenue earned in excess of billings and (iv) 
prepaid expenses. Facility No. 1 will be deemed a current liability for 
purposes of calculating this covenant.

11.4  TANGIBLE NET WORTH. To maintain on a consolidated basis tangible net 
worth equal to at least Thirty Three Million Dollars ($33,000,000).

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

11.5  MAXIMUM NET LOSS. To report on a consolidated basis a net loss after 
taxes and extraordinary items not to exceed Two Million Dollars ($2,000,000) 
for each period of two (2) consecutive quarters.

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

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

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

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                                     -15-
<PAGE>

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

(d)   Debts and lines of credit in lines on the date of this 
      Agreement disclosed in writing to the Bank.

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

(a)   Deeds of trust and security agreements in favor of the Bank and its 
      affiliates.

(b)   Liens for taxes not yet due.

(c)   Liens outstanding on the date of this Agreement disclosed in writing to 
      the Bank.

11.7  LOANS TO OFFICERS. Not to make any loans, advances or other extensions 
of credit (excluding those term loans provided for under the Facility 3 
Commitment) to any of the Borrower's executives, officers, or directors or 
shareholders (or any relatives of any of the foregoing) in an amount which 
exceeds Twenty Thousand ($20,000) in the aggregate.

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

(a)   any lawsuit over Tow Hundred Fifty Thousand Dollars ($250,000) against 
      the Borrower.

(b)   any substantial dispute between the borrower and any government 
      authority.

(c)   any failure to comply with this Agreement.

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

(e)   any change in the borrower's name, address or legal structure.

11.9  BOOKS AND RECORDS. to maintain adequate books and records.

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

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

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

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

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

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

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                                      -16-
<PAGE>

11.16 INSURANCE.

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

(b)   GENERAL BUSINESS INSURANCE. To maintain insurance satisfactory to the 
      Bank as to amount, nature and carrier covering property damage (including
      loss of use and occupancy) to any of the Borrower's properties, public 
      liability insurance including coverage for contractual liability, product
      liability and workers' compensation, and any other insurance which is 
      usual for the Borrower's business.

(c)   EVIDENCE OF INSURANCE. Upon the request of the Bank, to deliver to the 
      Bank a copy of each insurance policy, or, if permitted by the Bank, a 
      certificate of insurance listing all insurance in force.

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

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

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

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

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

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

(f)   sell or otherwise dispose of any assets for less than fair market value, 
      or enter into any sale and leaseback agreement covering any of its fixed 
      or capital assets.

12.   HAZARDOUS WASTE INDEMNIFICATION

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

13.   DEFAULT

If any of the following events occur, the Bank may do one or more of the 
following: declare the Borrower in default, stop making any additional credit 
available to the Borrower, and require the Borrower to repay its entire debt 
immediately and without prior notice. If a bankruptcy petition is filed with 
respect to the Borrower, the entire debt outstanding under this Agreement 
will automatically become due immediately.

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                                     -17-
<PAGE>

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

13.2  NON-COMPLIANCE. The Borrower fails to meet the conditions of, or fails 
to perform any obligation under:

(a)   this Agreement,

(b)   any other agreement made in connection with this loan, or

(c)   any other agreement the Borrower has with the Bank or any affiliate of 
      the Bank.

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

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

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

13.6  BANKRUPTCY. The Borrower files a bankruptcy petition, a bankruptcy 
petition is filed against the Borrower, or the Borrower makes a general 
assignment for the benefit of creditors.

13.7  RECEIVERS. A receiver or similar official is appointed for the 
Borrower's business, or the business is terminated.

13.8  LAWSUITS. Any lawsuit or lawsuits are filed on behalf of one or more 
trade creditors against the Borrower in an aggregate amount of Two Hundred 
Fifty Thousand Dollars ($250,000) or more in excess of any insurance coverage.

13.9  JUDGMENTS. Any judgments or arbitration awards are entered against the 
Borrower; or the Borrower enters into any settlement agreements with respect 
to any litigation or arbitration, in an aggregate amount of Two Hundred Fifty 
Thousand Dollars ($250,000) or more in excess of any insurance coverage.

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

13.11 DEFAULT UNDER GUARANTY OR SUBORDINATION AGREEMENT. Any guaranty, 
subordination agreement, security agreement, deed of trust, or other document 
required by this Agreement is violated or no longer in effect.

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

13.13 NOMINEE BORROWER DEFAULT. Any Nominee Borrower fails to make any 
payment when due under any term loan as described in Article 3 of this 
Agreement.

14.   ENFORCING THIS AGREEMENT; MISCELLANEOUS

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

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                                      -18-

<PAGE>

14.2  OREGON LAW.  This Agreement is governed by Oregon law.

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

14.4  ARBITRATION.

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

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

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

      (iii)   Any violation of this Agreement; or

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

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

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

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

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

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

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

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

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

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

              (A)  a provisional or interim remedy; and/or

              (B)  additional or supplemental remedies.

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                                     -19-

<PAGE>

(h)   The pursuit of or a successful action for provisional, interim, 
      additional or supplementary remedies, or the filing of a court action,
      does not constitute a waiver of the right of the Borrower or the Bank, 
      including the suing party, to submit the controversy or claim to 
      arbitration if the other party contests the lawsuit.

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

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

14.6  COSTS.  If the Bank incurs any expenses in connection with enforcing 
this Agreement or administering this Agreement (including in connection with 
extending, amending, renewing or modifying this Agreement), or if the Bank 
takes collection action under this Agreement, it is entitled to costs and 
reasonable attorneys' fees, including any allocated costs of in-house counsel.

14.7  ATTORNEYS' FEES.  In the event of a lawsuit or arbitration proceeding, 
the prevailing party is entitled to recover costs and reasonable attorneys' 
fees (including any allocated costs of in-house counsel) incurred in 
connection with the lawsuit or arbitration proceeding, as determined by the 
court or arbitrator (and not by a jury). Such costs and attorneys' fees shall 
include, without limitation, those incurred on any appeal, as determined by 
the appellate court, and any anticipated costs and attorneys' fees to pursue 
or collect any judgement.

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

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

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

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

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

14.9  EXCHANGE OF INFORMATION.  The Borrower agrees that the Bank may 
exchange financial information about the Borrower with BankAmerica 
Corporation affiliates and other related entities.

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

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

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

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<PAGE>

14.12 WRITTEN AGREEMENTS. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND 
COMMITMENTS MADE BY THE BANK 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 THAT BANK TO BE ENFORCEABLE.

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


[LOGO]

BANK OF AMERICA NT & SA                  CLAREMONT TECHNOLOGY GROUP, INC.


X /s/ Robert Countryman                  X /s/ Terry D. Murphy
----------------------------------       -------------------------------------
By: Robert Countryman                    By: Terry D. Murphy
Title: Vice President                    Title: Secretary/Vice President Finance



ADDRESS WHERE NOTICES TO THE BANK        ADDRESS WHERE NOTICES TO THE BORROWER
ARE TO BE SENT:                          ARE TO BE SENT:
Oregon Commercial Banking #2090          1600 NW Compton Drive
P.O. Box 6400                            Beaverton, Oregon 97006
Portland, Oregon 97228





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