<PAGE>
 
                                 EXHIBIT 10.7


                                August 14, 1998



Kevin J. Laughlin
Chief Financial Officer
International Network Services
328 Gibraltar Drive
Sunnyvale, CA 94089

Dear Mr. Laughlin:

     This letter is to confirm that Wells Fargo Bank, National Association
("Bank"), subject to all terms and conditions contained herein, has agreed to
make available to International Network Services  ("Borrower") the following
described credit accommodations (each, a "Credit" and collectively, the
"Credits"):

     1.  A commitment under which Bank will make advances to Borrower from time
to time up to and including February 14, 2000, not to exceed the aggregate
principal amount of Ten Million  Dollars ($10,000,000.00) ("Term Commitment"),
the proceeds of which shall be used for working capital requirements and to
purchase capital equipment, and which shall be converted on February 14, 2000,
to a term loan, as described more fully below.

     2.  A facility under which Bank will enter into foreign exchange contracts
for the account of Borrower from time to time up to and including February 14,
2000, not to exceed at any time the maximum principal amount of Ten Million
United States Dollars (US$10,000,000.00) ("Foreign Exchange Facility").


I.   CREDIT TERMS:

     1.  TERM COMMITMENT:

     (a) Term Commitment Note.  Borrower's obligation to repay advances under
         --------------------                                                
the Term Commitment shall be evidenced by a promissory note substantially in the
form of Exhibit A attached hereto ("Term Commitment Note"), all terms of which
are incorporated herein by this reference.

     (b) Limitation on Borrowings.  Notwithstanding any other provision of this
         ------------------------                                              
letter, at no time during the Term-Out Period (as defined in the Term Commitment
Note) shall the aggregate 
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amount of all outstanding borrowings under the Term Commitment for equipment
purchases exceed a maximum of one hundred percent (100%) of the cost of each
item of equipment purchased with the proceeds thereof, as evidenced by the
seller's invoice. Upon request by Bank, Borrower shall provide to Bank copies of
all invoices showing Borrower's cost (after all rebates and discounts)of all
equipment purchased with proceeds of the Term Commitment.

     (c) Borrowing and Repayment.  Borrower may from time to time during the
         -----------------------                                            
period in which Bank will make advances under the Term Commitment borrow and
partially or wholly repay its outstanding borrowings, and reborrow, subject to
all the limitations, terms and conditions contained herein; provided however,
that the total outstanding borrowings under the Term Commitment shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.  The principal amount of the Term Commitment shall be repaid in
accordance with the provisions of the Term Commitment Note.

     (d) Prepayment.  Borrower may prepay principal on the Term Commitment
         ----------                                                       
solely in accordance with the provisions of the Term Commitment Note.

     2.  FOREIGN EXCHANGE FACILITY:

     (a) Foreign Exchange Facility.  Bank will enter into foreign exchange
         -------------------------                                        
contracts for the account of Borrower under the Foreign Exchange Facility for
the purchase and/or sale by Borrower in United States dollars of foreign
currencies designated by Borrower; provided however, that the aggregate of all
outstanding foreign exchange contracts shall not at any time exceed the maximum
principal amount available under the Foreign Exchange Facility, as set forth
above.  No foreign exchange contract shall be executed which extends beyond
February 14, 2000.  Borrower shall have a "Delivery Limit" under the Foreign
Exchange Facility not to exceed at any time the aggregate principal amount of
Two Million United States Dollars (US$2,000,000.00), which Delivery Limit
reflects the maximum principal amount of Borrower's foreign exchange contracts
which may mature during any one (1) day period.  All foreign exchange
transactions shall be subject to the additional terms of a Foreign Exchange
Agreement, substantially in the form of Exhibit B attached hereto ("Foreign
Exchange Agreement"), all terms of which are incorporated herein by this
reference.

     (b) Settlement.  Each foreign exchange contract under the Foreign Exchange
         ----------                                                            
Facility shall be settled on its maturity date 
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Page 3

by Bank's debit to any demand deposit account maintained by Borrower with Bank.

     3.  COLLATERAL:

     As security for all indebtedness of Borrower to Bank under the Term
Commitment, Borrower shall grant to Bank security interests of first priority in
all Borrower's accounts receivable and other rights to payment, general
intangibles, inventory, equipment, and fixtures upon the conversion of the
outstanding principal balance to a fully amortizing term loan.

All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds of trust and other documents as
Bank shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon demand for all costs and expenses
incurred by Bank in connection with any of the foregoing security, including
without limitation, filing and recording fees and costs of appraisals, audits
and title insurance.


II.  INTEREST/FEES:

     1.  Interest.  The outstanding principal balance of the Term Commitment
         --------                                                           
shall bear interest at the rate of interest set forth in the Term Commitment
Note.

     2.  Computation and Payment.  Interest shall be computed on the basis of a
         -----------------------                                               
360-day year, actual days elapsed.  Interest shall be payable at the times and
place set forth in the Term Commitment Note.

     3.  Collection of Payments.  Borrower authorizes Bank to collect all
         ----------------------                                          
principal and interest due under each Credit by charging Borrower's demand
deposit account number 4038-141768 with Bank, or any other demand deposit
account maintained by Borrower with Bank, for the full amount thereof. Should
there be insufficient funds in any such demand deposit account to pay all such
sums when due, the full amount of such deficiency shall be immediately due and
payable by Borrower.


III. REPRESENTATIONS AND WARRANTIES:

     Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this letter and
shall continue in full force and 
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effect until the full and final payment, and satisfaction and discharge, of all
obligations of Borrower to Bank subject to this letter.

     1.  Legal Status.  Borrower is a corporation, duly organized and existing
         ------------                                                         
and in good standing under the laws of the state of California, and is qualified
or licensed to do business in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so licensed
could have a material adverse effect on Borrower.

     2.  Authorization and Validity.  This letter, the Term Commitment Note,
         --------------------------                                         
Foreign Exchange Agreement, and each other document, contract or instrument
deemed necessary by Bank to evidence any extension of credit to Borrower
pursuant to the terms and conditions hereof, or now or at any time hereafter
required by or delivered to Bank in connection with this letter (collectively,
the "Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower or the party which executes
the same, enforceable in accordance with their respective terms.

     3.  No Violation.  The execution, delivery and performance by Borrower of
         ------------                                                         
each of the Loan Documents do not violate any provision of any law or
regulation, or contravene any provision of the Articles of Incorporation or By-
Laws of Borrower, or result in a breach of or constitute a default under any
contract, obligation, indenture or other instrument to which Borrower is a party
or by which Borrower may be bound.

     4.  Litigation.  There are no pending, or to the best of Borrower's
         ----------                                                     
knowledge threatened, actions, claims, investigations, suits or proceedings by
or before any governmental authority, arbitrator, court or administrative agency
which could have a material adverse effect on the financial condition or
operation of Borrower other than those disclosed by Borrower to Bank in writing
prior to the date hereof.

     5.  Correctness of Financial Statement.  The financial statement of
         ----------------------------------                             
Borrower dated June 30, 1998, a true copy of which has been delivered by
Borrower to Bank prior to the date hereof, (a) is complete and correct and
presents fairly the financial condition of Borrower, (b) discloses all
liabilities of Borrower that are required to be reflected or reserved against
under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in 
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accordance with generally accepted accounting principles consistently applied.
Since the date of such financial statement there has been no material adverse
change in the condition or operation of Borrower, nor has Borrower mortgaged,
pledged, granted a security interest in or otherwise encumbered any of its
assets or properties except in favor of Bank or as otherwise permitted by Bank
in writing.

     6.  Income Tax Returns.  Borrower has no knowledge of any pending
         ------------------                                           
assessments or adjustments of its income tax payable with respect to any year.

     7.  No Subordination.  There is no agreement, indenture, contract or
         ----------------                                                
instrument to which Borrower is a party or by which Borrower may be bound that
requires the subordination in right of payment of any of Borrower's obligations
subject to this letter to any other obligation of Borrower.

     8.  Permits, Franchises.  Borrower possesses, and will hereafter possess,
         -------------------                                                  
all permits, consents, approvals, franchises and licenses required and all
rights to trademarks, trade names, patents and fictitious names, if any,
necessary to enable it to conduct the business in which it is now engaged in
compliance with applicable law.

     9.  ERISA.  Borrower is in compliance in all material respects with all
         -----                                                              
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended or recodified from time to time ("ERISA"); Borrower has not violated any
provision of any defined employee pension benefit plan (as defined in ERISA)
maintained or contributed to by Borrower (each, a "Plan"); no Reportable Event,
as defined in ERISA, has occurred and is continuing with respect to any Plan
initiated by Borrower; Borrower has met its minimum funding requirements under
ERISA with respect to each Plan; and each Plan will be able to fulfill its
benefit obligations as they come due in accordance with the Plan documents and
under generally accepted accounting principles.

     10.  Other Obligations.  Borrower is not in default on any obligation for
          -----------------                                                   
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.

     11.  Environmental Matters.  Except as disclosed by Borrower to Bank in
          ---------------------                                             
writing prior to the date hereof, Borrower is in compliance in all material
respects with all applicable federal or state environmental, hazardous waste,
health and safety statutes, and any rules or regulations adopted pursuant
thereto, 
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Page 6


which govern or affect any of Borrower's operations and/or properties, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986,
the Federal Resource Conservation and Recovery Act of 1976, and the Federal
Toxic Substances Control Act, as any of the same may be amended, modified or
supplemented from time to time. None of the operations of Borrower is the
subject of any federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of any
toxic or hazardous waste or substance into the environment. Borrower has no
material contingent liability in connection with any release of any toxic or
hazardous waste or substance into the environment.


IV. CONDITIONS:

     1.  Conditions of Initial Extension of Credit.  The obligation of Bank to
         -----------------------------------------                            
grant any of the Credits is subject to fulfillment to Bank's satisfaction of all
of the following conditions:

     (a) Documentation.  Bank shall have received each of the Loan Documents,
         -------------                                                       
duly executed and in form and substance satisfactory to Bank.

     (b) Financial Condition.  There shall have been no material adverse change,
         -------------------                                                    
as determined by Bank, in the financial condition or business of Borrower, nor
any material decline, as determined by Bank, in the market value of any
collateral required hereunder or a substantial or material portion of the assets
of Borrower.

     (c) Insurance.  Borrower shall have delivered to Bank evidence of insurance
         ---------                                                              
coverage on all Borrower's property, in form, substance, amounts, covering risks
and issued by companies satisfactory to Bank, and where required by Bank, with
loss payable endorsements in favor of Bank.

     2.  Conditions of Each Extension of Credit.  The obligation of Bank to make
         --------------------------------------                                 
each extension of credit requested by Borrower hereunder shall be subject to the
fulfillment to Bank's satisfaction of each of the following conditions:

     (a) Compliance.  The representations and warranties contained herein and in
         ----------                                                             
each of the other Loan Documents shall be true on and as of the date of the
signing of this letter and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
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warranties had been made on and as of each such date, and on each such date, no
default hereunder, and no condition, event or act which with the giving of
notice or the passage of time or both would constitute such a default, shall
have occurred and be continuing or shall exist.

     (b) Documentation.  Bank shall have received all additional documents which
         -------------                                                          
may be required in connection with such extension of credit.


V.   COVENANTS:

     Borrower covenants that so long Bank remains committed to extend credit to
Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:

     1.  Punctual Payment.  Punctually pay all principal, interest, fees or
         ----------------                                                  
other liabilities due under any of the Loan Documents at the times and place and
in the manner specified therein.

     2.  Accounting Records.  Maintain adequate books and records in accordance
         ------------------                                                    
with generally accepted accounting principles consistently applied, and permit
any representative of Bank, at any reasonable time, to inspect, audit and
examine such books and records, to make copies of the same and inspect the
properties of Borrower.

     3.  Financial Statements.  Provide to Bank all of the following, in form
         --------------------                                                
and detail satisfactory to Bank:

     (a) not later than 120 days after and as of the end of each fiscal year, an
audited financial statement of Borrower, prepared by a certified public
accountant acceptable to Bank, to include balance sheet, income statement, and
Borrower's filed 10K;

     (b) not later than 45 days after and as of the end of each fiscal quarter,
a financial statement of Borrower, prepared by Borrower, to include balance
sheet, income statement, and Borrower's 10Q for each such fiscal quarter; and

     (c) from time to time such other information as Bank may reasonably
request.
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     4.  Compliance.  Preserve and maintain all licenses, permits, governmental
         ----------                                                            
approvals, rights, privileges and franchises necessary for the conduct of its
business; and comply with the provisions of all documents pursuant to which
Borrower is organized and/or which govern Borrower's continued existence and
with the requirements of all laws, rules, regulations and orders of a
governmental agency applicable to Borrower and/or its business.

     5.  Insurance.  Maintain and keep in force insurance of the types and in
         ---------                                                           
amounts customarily carried in lines of business similar to that of Borrower,
including but not limited to fire, extended coverage, public liability, flood,
property damage and workers' compensation, with all such insurance carried with
companies and in amounts satisfactory to Bank, and deliver to Bank from time to
time at Bank's request schedules setting forth all insurance then in effect.

     6.  Facilities.  Keep all properties useful or necessary to Borrower's
         ----------                                                        
business in good repair and condition, and from time to time make necessary
repairs, renewals and replacements thereto so that such properties shall be
fully and efficiently preserved and maintained.

     7.  Taxes and Other Liabilities.  Pay and discharge when due any and all
         ---------------------------                                         
indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except (a) such as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Bank's satisfaction, for eventual payment thereof in the
event Borrower is obligated to make such payment.

     8.  Financial Condition.  Maintain Borrower's financial condition as
         -------------------                                             
follows using generally accepted accounting principles consistently applied and
used consistently with prior practices (except to the extent modified by the
definitions herein):

     (a) Tangible Net Worth measured as of the end of each fiscal quarter not at
any time less than $85,000,000.00 plus seventy-five percent (75%) of current
quarterly positive net income, commencing June 30, 1998 with no provision for
net losses, with "Tangible Net Worth" defined as the aggregate of total
stockholders' equity plus subordinated debt less any intangible assets.
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     (b) Total Liabilities divided by Tangible Net Worth not at any time greater
than 1.0 to 1.0, with "Total Liabilities" defined as the aggregate of current
liabilities and non-current liabilities less subordinated debt, and with
"Tangible Net Worth" as defined above.

     (c) Quick Ratio not at any time less than 1.25 to 1.0, with "Quick Ratio"
defined as the aggregate of unrestricted cash, unrestricted marketable
securities and receivables convertible into cash divided by total current
liabilities.

     (d) Net income after taxes not less than $1.00 on a trailing four quarter
basis with no more than two consecutive quarters of loss, determined as of each
fiscal quarter.

     (e) During the Term-Out Period (as defined in the Term Commitment Note),
EBITDA Coverage Ratio not less than 2.0 to 1.0 as of each fiscal year end, with
"EBITDA" defined as net profit before tax plus interest expense (net of
capitalized interest expense), depreciation expense and amortization expense,
and with "EBITDA Coverage Ratio" defined as EBITDA divided by the aggregate of
total interest expense plus the prior period current maturity of long-term debt
and the prior period current maturity of subordinated debt.

     12.  Other Indebtedness.  Not create, incur, assume or permit to exist any
          ------------------                                                   
indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except leases.

     13.  Dividends, Distributions.  Not declare or pay any dividend or
          ------------------------                                     
distribution in cash exceeding twenty-five percent (25%) of Borrower's earnings
for said fiscal year.

     14.  Year 2000 Compliance.  Perform all acts reasonably necessary to ensure
          --------------------                                                  
that (a) Borrower and any business in which Borrower holds a substantial
interest, and (b) all customers, suppliers and vendors that are material to
Borrower's business, become Year 2000 Compliant in a timely manner.  Such acts
shall include, without limitation, performing a comprehensive review and
assessment of all of Borrower's systems and adopting a detailed plan, with
itemized budget, for the remediation, monitoring and testing of such systems.
As used herein, "Year 2000 Compliant" shall mean, in regard to any entity, that
all software, hardware, firmware, equipment, goods or systems utilized by or
material to the business operations or financial 
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condition of such entity, will properly perform date sensitive functions before,
during and after the year 2000. Borrower shall, immediately upon request,
provide to Bank such certifications or other evidence of Borrower's compliance
with the terms hereof as Bank may from time to time require.

     15.  Other Accounts.  On or before December 31, 1998, Borrower shall
          --------------                                                 
establish, and at all times thereafter during the term of this Agreement,
Borrower shall maintain its primary banking services relationship with Bank,
including cash management and foreign exchange services required by Borrower.
Borrower acknowledges and agrees that the establishment and maintenance of such
banking relationship is an essential element in Bank providing the Term
Commitment on the terms set out in this letter and in the Term Commitment Note.


VI.  DEFAULT, REMEDIES:

     1.  Default, Remedies.  Upon the violation of any term or condition of any
         -----------------                                                     
of the Loan Documents, or upon the occurrence of any default or defined event of
default under any of the Loan Documents: (a) all indebtedness of Borrower under
each of the Loan Documents, any term thereof to the contrary notwithstanding,
shall at Bank's option and without notice become immediately due and payable
without presentment, demand, protest or notice of dishonor, all of which are
expressly waived by Borrower; (b) the obligation, if any, of Bank to extend any
further credit under any of the Loan Documents shall immediately cease and
terminate; and (c) Bank shall have all rights, powers and remedies available
under each of the Loan Documents, or accorded by law, including without
limitation the right to resort to any or all security for any of the Credits and
to exercise any or all of the rights of a beneficiary or secured party pursuant
to applicable law.  All rights, powers and remedies of Bank may be exercised at
any time by Bank and from time to time after the occurrence of any such breach
or default, are cumulative and not exclusive, and shall be in addition to any
other rights, powers or remedies provided by law or equity.

     2.  No Waiver.  No delay, failure or discontinuance of Bank in exercising
         ---------                                                            
any right, power or remedy under any of the Loan Documents shall affect or
operate as a waiver of such right, power or remedy; nor shall any single or
partial exercise of any such right, power or remedy preclude, waive or otherwise
affect any other or further exercise thereof or the exercise of any other right,
power or remedy.  Any waiver, permit, consent or approval of any kind by Bank of
any breach of or default under 
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any of the Loan Documents must be in writing and shall be effective only to the
extent set forth in such writing.


VII. MISCELLANEOUS:

     1.  Notices.  All notices, requests and demands which any party is required
         -------                                                                
or may desire to give to any other party under any provision of this letter must
be in writing delivered to each party at its address first set forth above, or
to such other address as any party may designate by written notice to all other
parties.  Each such notice, request and demand shall be deemed given or made as
follows:  (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.

     2.  Costs, Expenses and Attorneys' Fees.  Borrower shall pay to Bank
         -----------------------------------                             
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the negotiation and preparation of this
letter and the other Loan Documents, Bank's continued administration hereof and
thereof, and the preparation of amendments and waivers hereto and thereto, (b)
the enforcement of Bank's rights and/or the collection of any amounts which
become due to Bank under any of the Loan Documents, and (c) the prosecution or
defense of any action in any way related to any of the Loan Documents, including
without limitation, any action for declaratory relief, whether incurred at the
trial or appellate level, in an arbitration proceeding or otherwise, and
including any of the foregoing incurred in connection with any bankruptcy
proceeding (including without limitation, any adversary proceeding, contested
matter or motion brought by Bank or any other person) relating to any Borrower
or any other person or entity.

     3.  Successors, Assignment.  This letter shall be binding upon and inure to
         ----------------------                                                 
the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Borrower may not
assign or transfer its interest hereunder without Bank's prior written consent.
Bank reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Bank's rights and
benefits under each of the Loan Documents.  In connection therewith Bank may
disclose all 
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documents and information which Bank now has or hereafter may acquire relating
to any of the Credits, Borrower or its business, [any guarantor hereunder or the
business of such guarantor,] or any collateral required hereunder.

     4.  Entire Agreement; Amendment.  This letter and the other Loan Documents
         ---------------------------                                           
constitute the entire agreement between Borrower and Bank with respect to the
Credits and supersede all prior negotiations, communications, discussions and
correspondence concerning the subject matter hereof.  This letter may be amended
or modified only in writing signed by each party hereto.

     5.  No Third Party Beneficiaries.  This letter is made and entered into for
         ----------------------------                                           
the sole protection and benefit of the parties hereto and their respective
permitted successors and assigns, and no other person or entity shall be a third
party beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this letter or any other of the Loan Documents to which it is
not a party.

     6.  Severability of Provisions.  If any provision of this letter shall 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 any remaining provisions of this
letter.

     7.  Governing Law.  This letter shall be governed by and construed in
         -------------                                                    
accordance with the laws of the State of California.

     8.  Arbitration.
         ----------- 

     (a) Arbitration.  Upon the demand of any party, any Dispute shall be
         -----------                                                     
resolved by binding arbitration (except as set forth in (e) below) in accordance
with the terms of this letter.  A "Dispute" shall mean any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, any of the Loan Documents, or any
past, present or future extensions of credit and other activities, transactions
or obligations of any kind related directly or indirectly to any of the Loan
Documents, including without limitation, any of the foregoing arising in
connection with the exercise of any self-help, ancillary or other remedies
pursuant to any of the Loan Documents.  Any party may by summary proceedings
bring an action in court to compel arbitration of a Dispute.  Any party who
fails or refuses to submit to arbitration following a lawful demand by any other
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party shall bear all costs and expenses incurred by such other party in
compelling arbitration of any Dispute.

     (b)  Governing Rules.  Arbitration proceedings shall be administered by the
          ---------------                                                       
American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules.  All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents.  The arbitration shall be conducted at a location in California
selected by the AAA or other administrator.  If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control.  All statutes of limitation applicable to any Dispute
shall apply to any arbitration proceeding.  All discovery activities shall be
expressly limited to matters directly relevant to the Dispute being arbitrated.
Judgment upon any award rendered in an arbitration may be entered in any court
having jurisdiction; provided however, that nothing contained herein shall be
deemed to be a waiver by any party that is a bank of the protections afforded to
it under 12 U.S.C. (S)91 or any similar applicable state law.

     (c)   No Waiver; Provisional Remedies, Self-Help and Foreclosure.  No
           ----------------------------------------------------------     
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding.  The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.

     (d) Arbitrator Qualifications and Powers; Awards.  Arbitrators must be
         --------------------------------------------                      
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive law
applicable to the subject matter of the Dispute.  Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing.  Arbitrators (I) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award 
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recovery of all costs and fees, to impose sanctions and to take such other
actions as they deem necessary to the same extent a judge could pursuant to the
Federal Rules of Civil Procedure, the California Rules of Civil Procedure or
other applicable law. Any Dispute in which the amount in controversy is
$5,000,000 or less shall be decided by a single arbitrator who shall not render
an award of greater than $5,000,000 (including damages, costs, fees and
expenses). By submission to a single arbitrator, each party expressly waives any
right or claim to recover more than $5,000,000. Any Dispute in which the amount
in controversy exceeds $5,000,000 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations.

     (e)  Judicial Review.  Notwithstanding anything herein to the contrary, in
          ---------------                                                      
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law.  In such arbitrations (I) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the substantive law of the state of
California, and (iii) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (A) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (B) whether the
conclusions of law are erroneous under the substantive law of the state of
California.  Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the state of California.

     (f) Real Property Collateral; Judicial Reference.  Notwithstanding anything
         --------------------------------------------                           
herein to the contrary, no Dispute shall be submitted to arbitration if the
Dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (I) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
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August 14, 1998
Page 15


indebtedness and obligations, shall remain fully valid and enforceable.  If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638.  A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures.  Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

     (g) Miscellaneous.  To the maximum extent practicable, the AAA, the
         -------------                                                  
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA.  No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein.  If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control.  This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.
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Page 16


     Your acknowledgment of this letter shall constitute acceptance of the
foregoing terms and conditions.  Bank's commitment to extend any credit to
Borrower pursuant to the terms of this letter shall terminate on September 1,
1998, unless this letter is acknowledged by Borrower and returned to Bank on or
before that date.

                                Sincerely,

                                WELLS FARGO BANK,
                                  NATIONAL ASSOCIATION

                                By: /s/ Sherill Swan
                                   -----------------------
                                   Sherrill Swan
                                   Vice President

Acknowledged and accepted as of _______________:

INTERNATIONAL NETWORK SERVICES

By: /s/ Kevin J. Laughlin
   ---------------------------
   Kevin J. Laughlin
   Chief Financial Officer
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Page 17


                                 TERM COMMITMENT NOTE


$10,000,000.00                                            Palo Alto, California
                                                                August 14, 1998

     FOR VALUE RECEIVED, the undersigned INTERNATIONAL NETWORK SERVICES
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at 400 Hamilton Avenue, P.O. Box 150, Palo
Alto, California or at such other place as the holder hereof may designate, in
lawful money of the United States of America and in immediately available funds,
the principal sum of Ten Million Dollars ($10,000,000.00), or so much thereof as
may be advanced and be outstanding, with interest thereon during the Revolving
Period (defined below), to be computed on each advance from the date of its
disbursement (computed on the basis of a 360-day year, actual days elapsed)
either (i) at a fluctuating rate per annum one-half of one percent (0.50%) below
the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum
determined by Bank to be one and one-half percent (1.50%) above Bank's LIBOR in
effect on the first day of the applicable Fixed Rate Term. When interest is
determined in relation to the Prime Rate, each change in the rate of interest
hereunder shall become effective on the date each Prime Rate change is announced
within Bank.  With respect to each LIBOR  option selected hereunder, Bank is
hereby authorized to note the date, principal amount, interest rate and Fixed
Rate Term applicable thereto and any payments made thereon on Bank's books and
records (either manually or by electronic entry) and/or on any schedule attached
to this Note, which notations shall be prima facie evidence of the accuracy of
the information noted.

A.   DEFINITIONS:

     As used herein, the following terms shall have the meanings set forth after
each:

     1.  "Business Day" means any day except a Saturday, Sunday or any other day
designated as a holiday under Federal or California statute or regulation.
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     2.  "Fixed Rate Term" means a period commencing on a Business Day and
continuing for one (1), two (2), or three (3) months, as designated by Borrower,
during which the outstanding principal balance of this Note bears interest
determined in relation to Bank's LIBOR ; provided however, that no Fixed Rate
Term commencing during the Revolving Period shall extend beyond February 14,
2000, and no Fixed Rate Term commencing during the Term Out Period shall extend
beyond February 14, 2003.  If any Fixed Rate Term would end on a day which is
not a Business Day, then such Fixed Rate Term shall be extended to the next
succeeding Business Day.

     3.  "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) and determined pursuant to the following formula:

     LIBOR =               Base LIBOR
                -------------------------------
                100% - LIBOR Reserve Percentage

          (a) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies.  Borrower understands and agrees that Bank may base its quotation of
the Inter-Bank Market Offered Rate upon such offers or other market indicators
of the Inter-Bank Market as Bank in its discretion deems appropriate including,
but not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

          (b) "LIBOR Reserve Percentage" means the reserve percentage prescribed
by the Board of Governors of the Federal Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for expected changes in such reserve
percentage during the applicable Fixed Rate Term.

     5.  "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office in San Francisco as its Prime
Rate, with the understanding that the 
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August 14, 1998
Page 19


Prime Rate is one of Bank's base rates and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Bank may designate.

     6.  "Revolving Period" shall mean the period commencing on the date of this
Note and ending on the earlier of February 14, 2000 or the date Bank's
obligation to make advances on this Note terminates.

     7.  "Term-Out Period" means the period commencing February 15, 2000 and
ending February 14, 2003.

B.   INTEREST:

     1.  Payment of Interest.  Interest accrued on this Note shall be payable on
         -------------------                                                    
the first day of each month, commencing September 1, 1998.

     2.  Selection of Interest Rate Options.  At any time any portion of the
         ----------------------------------                                 
outstanding principal balance of this Note bears interest determined in relation
to Bank's LIBOR , it may be continued by Borrower at the end of the Fixed Rate
Term applicable thereto so that it bears interest determined in relation to the
Prime Rate or in relation to Bank's LIBOR  for a new Fixed Rate Term designated
by Borrower.  At any time any portion of the outstanding principal balance of
this Note bears interest determined in relation to the Prime Rate, Borrower may
convert all or a portion thereof so that it bears interest determined in
relation to Bank's LIBOR  for a Fixed Rate Term designated by Borrower.  At the
time Borrower wishes to select the LIBOR  option for the outstanding principal
balance hereof at the end of each Fixed Rate Term, Borrower shall give Bank
notice specifying (a) the interest rate option selected by Borrower and (b) if
the LIBOR  option is selected, the length of the applicable Fixed Rate Term.
Any such notice may be given by telephone so long as, with respect to each LIBOR
option selected by Borrower, (i) Bank receives written confirmation from
Borrower not later than three (3) Business Days after such telephone notice is
given, and (ii) such notice is given to Bank prior to 10:00 a.m., California
time, on the first day of the Fixed Rate Term.  For each LIBOR  option requested
hereunder, Bank will quote the applicable fixed rate to 
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August 14, 1998
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Borrower at approximately 10:00 a.m., California time, on the first day of the
Fixed Rate Term. If Borrower does not immediately accept the rate quoted by
Bank, any subsequent acceptance by Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate; provided however, that if
Borrower fails to accept any such rate by 11:00 a.m., California time, on the
Business Day such quotation is given, then the quoted rate shall expire and Bank
shall have no obligation to permit a LIBOR option to be selected on such day. If
no specific designation of interest is made at the time any advance is requested
hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have
made a Prime Rate interest selection for such advance or the principal amount to
which such Fixed Rate Term applied. Notwithstanding the foregoing, during the
Term-Out Period, selection of interest rate by Borrower must apply to the entire
outstanding principal balance.

     3.  Additional LIBOR Provisions.
         --------------------------- 

          (a) If Bank at any time shall determine that for any reason adequate
and reasonable means do not exist for ascertaining Bank's LIBOR , then Bank
shall promptly give notice thereof to Borrower.  If such notice is given and
until such notice has been withdrawn by Bank, than (i) no new LIBOR  option may
be selected by Borrower, and (ii) any portion of the outstanding principal
balance hereof which bears interest determined in relation to Bank's LIBOR ,
subsequent to the end of the Fixed Rate Term applicable thereto, shall bear
interest determined in relation to the Prime Rate.

          (b) If any law, treaty, rule, regulation or determination of a court
or governmental authority or any change therein or in the interpretation or
application thereof (each, a "Change in Law") shall make it unlawful for Bank
(i) to make LIBOR  options available hereunder, or (ii) to maintain interest
rates based on Bank's LIBOR , then in the former event, any obligation of Bank
to make available such unlawful LIBOR  options shall immediately be canceled,
and in the latter event, any such unlawful LIBOR -based interest rates then
outstanding shall be converted, at Bank's option, so that interest on the
portion of the outstanding principal balance subject thereto is determined in
relation to the Prime Rate; provided however, that if any such Change in Law
shall permit any LIBOR -based interest rates to remain in effect until the
expiration of the Fixed Rate Term applicable thereto, then such 
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August 14, 1998
Page 21


permitted LIBOR-based interest rates shall continue in effect until the
expiration of such Fixed Rate Term. Upon the occurrence of any of the foregoing
events, Borrower shall pay to Bank immediately upon demand such amounts as may
be necessary to compensate Bank for any fines, fees, charges, penalties or other
costs incurred or payable by Bank as a result thereof and which are attributable
to any LIBOR options made available to Borrower hereunder, and any reasonable
allocation made by Bank among its operations shall be conclusive and binding
upon Borrower.

          (c) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:

               (i)  subject Bank to any tax, duty or other charge with respect
                    to any LIBOR  options, or change the basis of taxation of
                    payments to Bank of principal, interest, fees or any other
                    amount payable hereunder (except for changes in the rate of
                    tax on the overall net income of Bank);

              (ii)  impose, modify or hold applicable any reserve, special
                    deposit, compulsory loan or similar requirement against
                    assets held by, deposits or other liabilities in or for the
                    account of, advances or loans by, or any other acquisition
                    of funds by any office of Bank; or

             (iii)  impose on Bank any other condition;

and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR  options hereunder and/or to reduce
any amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reductions in amounts received by Bank which are attributable to such LIBOR
options.  In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR  options made available
to Borrower hereunder, any 
<PAGE>
 
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August 14, 1998
Page 22


reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.

  4. Default Interest.  From and after the maturity date of this Note, or such
     ----------------                                                         
earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to three percent (3%) above
the higher of (i) the Prime Rate or (ii) the rate of interest then in effect
applicable to this Note.

C.   BORROWING, REPAYMENT, AND PREPAYMENT:

     (a) Borrowing and Repayment.  Borrower may from time to time during the
         -----------------------                                            
Revolving Period borrow and partially or wholly repay its outstanding borrowings
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided that the total borrowings under this Note shall not exceed the
principal amount stated above.  The unpaid principal balance of this obligation
at any time shall be the total amounts advanced hereunder by the holder hereof
less the amount of principal payments made hereon by or for any Borrower, which
balance may be endorsed hereon from time to time by the holder.

     (b) Required Principal Payments during Term-Out Period.   Provided Borrower
         --------------------------------------------------                     
is not in default under the terms of this Note, the Letter Agreement, or any
other document or instrument entered in connection with this Note, and at
Borrower's option, the outstanding principal balance of this Note on February
14, 2000 shall be amortized over three (3) years, and thereafter principal shall
be payable on the first day of each month in equal successive installments over
said amortization term, commencing March 1, 2000, and continuing up to and
including February 1, 2003, with a final installment consisting of all remaining
unpaid principal due and payable in full on February 14, 2003.


     (c) Advances.  Advances hereunder, to the total amount of the principal sum
         --------                                                               
stated above, may be made by the holder at the oral or written request of
(i)_____________________________________________________________, or (ii) 
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August 14, 1998
Page 23


any person, with respect to advances deposited to the credit of any account of
Borrower with the holder, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of Borrower
regardless of the fact that persons other than those authorized to request
advances may have authority to draw against such account. The holder shall have
no obligation to determine whether any person requesting an advance is or has
been authorized by Borrower.

     2.  Application of Payments.  Each payment made on this Note shall be
         -----------------------                                          
credited first, to any interest then due and second, to the outstanding
principal balance hereof.  All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
Bank's LIBOR , with such payments applied to the oldest Fixed Rate Term first.

     3.  Prepayment.
         ---------- 

          (a) Prime Rate.  Borrower may prepay principal on any portion of this
              ----------                                                       
Note which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.

          (b) LIBOR.  Borrower may prepay principal on any portion of this Note
              -----                                                            
which bears interest determined in relation to Bank's LIBOR  at any time and in
the minimum amount of One Hundred  Thousand Dollars ($100,000); provided
however, that if the outstanding principal balance of such portion of this Note
is less than said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof.  In consideration of Bank providing this
prepayment option to Borrower, or if any such portion of this Note shall become
due and payable at any time prior to the last day of the Fixed Rate Term
applicable thereto by acceleration or otherwise, Borrower shall pay to Bank
immediately upon demand a fee which is the sum of the discounted monthly
differences for each month from the month of prepayment through the month in
which such Fixed Rate Term matures, calculated as follows for each such month:
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August 14, 1998
Page 24


               (i)  Determine the amount of interest which would have accrued
                    ---------                                                
                    each month on the amount prepaid at the interest rate
                    applicable to such amount had it remained outstanding until
                    the last day of the Fixed Rate Term applicable thereto.

              (ii)  Subtract from the amount determined in (i) above the amount
                    --------                                                   
                    of interest which would have accrued for the same month on
                    the amount prepaid for the remaining term of such Fixed Rate
                    Term at Bank's LIBOR , as applicable, in effect on the date
                    of prepayment for new loans made for such term and in a
                    principal amount equal to the amount prepaid.

             (iii)  If the result obtained in (ii) for any month is greater than
                    zero, discount that difference by Bank's LIBOR  used in (ii)
                    above.

Borrower acknowledges that prepayment of such amount will result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities.  Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank.  If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum four percent (4%) above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed).

D.   EVENTS OF DEFAULT:

     The occurrence of any of the following shall constitute an "Event of
Default" under this Note:

     (a) The failure to pay any principal, interest, fees or other charges when
due hereunder or under any contract, instrument or document executed in
connection with this Note.

     (b) The filing of a petition by or against Borrower, any guarantor of this
Note or any general partner or joint venturer in
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any Borrower which is a partnership or a joint venture (with each such
guarantor, general partner and/or joint venturer referred to herein as a "Third
Party Obligor") under any provisions of the Bankruptcy Reform Act, Title 11 of
the United States Code, as amended or recodified from time to time, or under any
similar or other law relating to bankruptcy, insolvency, reorganization or other
relief for debtors; the appointment of a receiver, trustee, custodian or
liquidator of or for any part of the assets or property of Borrower or any Third
Party Obligor; Borrower or any Third Party Obligor becomes insolvent, makes a
general assignment for the benefit of creditors or is generally not paying its
debts as they become due; or any attachment or like levy on any property of
Borrower or any Third Party Obligor.

     (c) The death or incapacity of any individual Borrower or Third Party
Obligor, or the dissolution or liquidation of any Borrower or Third Party
Obligor which is a corporation, partnership, joint venture or other type of
entity.

     (d) Any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of any contract, instrument or
document pursuant to which Borrower or any Third Party Obligor has incurred any
obligation for borrowed money, any purchase obligation, or any other liability
of any kind to any person or entity, including the holder.

     (e) Any financial statement provided by Borrower or any Third Party Obligor
to Bank proves to be incorrect, false or misleading in any material respect.

     (f) Any sale or transfer of all or a substantial or material part of the
assets of Borrower or any Third Party Obligor other than in the ordinary course
of its business.

     (g) Any violation or breach of any provision of, or any defined event of
default under, any addendum to this Note or any loan agreement, guaranty,
security agreement, deed of trust, mortgage or other document executed in
connection with or securing this Note.

     (h) Borrower shall fail to maintain the loan to collateral Ratio applicable
to the collateral for this Note, as required in 
<PAGE>
 
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Page 26


the Letter Agreement dated August 14, 1998 (the "Letter Agreement") and all
replacements, modifications or amendments thereof, and shall fail to comply with
the collateral requirements of the Letter Agreement within ten (10) days after
written notice by Bank of such noncompliance.

E.   MISCELLANEOUS:

     1.  Remedies.  Upon the occurrence of any Event of Default, the holder of
         --------                                                             
this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, protest or notice of dishonor, all of which are expressly
waived by Borrower, and the obligation, if any, of the holder to extend any
further credit hereunder shall immediately cease and terminate.   Borrower shall
pay to the holder immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys' fees (to
include outside counsel fees and all allocated costs of the holder's in-house
counsel), incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, and including any of the foregoing incurred in connection with any
bankruptcy proceeding relating to Borrower.

     2.  Obligations Joint and Several.  Should more than one person or entity
         -----------------------------                                        
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.

     3.  Governing Law.  This Note shall be governed by and construed in
         -------------                                                  
accordance with the laws of the State of California.


     IN WITNESS WHEREOF, the undersigned has executed this Note on the date
first written above.
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INTERNATIONAL NETWORK SERVICES


by:___________________________
Title:________________________