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                                                  LOAN AGREEMENT

----------------- ------------- ------------ ----------- -------- ------------ ------------ -------- ----------
  Principal        Loan Date      Maturity      Loan No    Call    Collateral    Account    Officer   Initials
 $500,000.00       02-14-1999    02-14-2000    90485255     01        3000        115342      GRA
----------------- ------------- ------------ ----------- -------- ------------ ------------ -------- ----------
  References in the shaded area are for Lender's use only and do not limit the applicability of this document 
   to any particular loan or item.
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<S>             <C>                                                  <C>          <C>    
Borrower:       CODA MUSIC TECHNOLOGY, INC.                          Lender:      RIVERSIDE BANK
                6210 BURY DRIVE                                                   MINNESOTA CENTER OFFICE
                EDEN PRAIRIE, MN 55346                                            7760 FRANCE AVENUE SOUTH, SUITE 125
                                                                                  BLOOMINGTON, MN 55435

================================================================================================================

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THIS LOAN AGREEMENT between CODA MUSIC TECHNOLOGY, INC. ("Borrower") and
RIVERSIDE BANK ("Lender") is made and executed on the following terms and
conditions. Borrower has received prior commercial loans from Lender or has
applied to Lender for a commercial loan or loans and other financial
accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations from
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and collectively as the "Loans." Borrower understands and agrees that: (a) in
granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements, as set forth in this Agreement; (b)
the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (c) all such Loans shall
be and shall remain subject to the following terms and conditions of this
Agreement.

TERM. This Agreement shall be effective as of February 14, 1999, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

<PAGE>

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

         Agreement. The word "Agreement" means this Loan Agreement, as this Loan
         Agreement may be amended or modified from time to time, together with
         all exhibits and schedules attached to this Loan Agreement from time to
         time.

         Account. The word "Account" means a trade account, account receivable,
         or other right to payment for goods sold or services rendered owing to
         Borrower (or to a third party grantor acceptable to Lender).

         Account Debtor. The words "Account Debtor" mean the person or entity
         obligated upon an Account.

         Advance. The word "Advance" means a disbursement of Loan funds under
         this Agreement.

         Borrower. The word "Borrower" means CODA MUSIC TECHNOLOGY, INC.. The
         word "Borrower" also includes, as applicable, all subsidiaries and
         affiliates of Borrower as provided below in the paragraph titled
         "Subsidiaries and Affiliates."

         Borrowing Base. The words "Borrowing Base" mean, as determined by
         Lender from time to time, the lesser of (a) $500,000.00; or (b) the sum
         of (i) 75.000% of the aggregate amount of Eligible Accounts, plus (ii)
         25.000% of the aggregate amount of Eligible Inventory.

         Business Day. The words "Business Day" mean a day on which commercial
         banks are open for business in the State of Minnesota.

         CERCLA. The word "CERCLA" means the Comprehensive Environmental
         Response, Compensation, and Liability Act of 1980, as amended.

<PAGE>

         Cash Flow. The words "Cash Flow" mean net income after taxes, and
         exclusive of extraordinary gains and income, plus depreciation and
         amortization.

         Collateral. The word "Collateral" means and includes without limitation
         all property and assets granted as collateral security for a Loan,
         whether real or personal property, whether granted directly or
         indirectly, whether granted now or in the future, and whether granted
         in the form of a security interest, mortgage, deed of trust,
         assignment, pledge, chattel mortgage, chattel trust, factor's lien,
         equipment trust, conditional sale, trust receipt, lien, charge, lien or
         title retention contract, lease or consignment intended as a security
         device, or any other security or lien interest whatsoever, whether
         created by law, contract, or otherwise. The word "Collateral" includes
         without limitation all collateral described below in the section titled
         "COLLATERAL."

         Debt. The word "Debt" means all of Borrower's liabilities excluding
         Subordinated Debt.

         Eligible Accounts. The words "Eligible Accounts" mean, at any time, all
         of Borrower's Accounts which contain selling terms and conditions
         acceptable to Lender. The net amount of any Eligible Account against
         which Borrower may borrow shall exclude all returns, discounts,
         credits, and offsets of any nature. Unless otherwise agreed to by
         Lender in writing, Eligible Accounts do not include:

                  (a) Accounts with respect to which the Account Debtor is an
                  officer, an employee or agent of Borrower.

                  b) Accounts with respect to which the Account Debtor is a
                  subsidiary of, or affiliated with or related to Borrower or
                  its shareholders, officers, or directors.

                  (c) Accounts with respect to which goods are placed on
                  consignment, guaranteed sale, or other terms by reason of
                  which the payment by the Account Debtor may be conditional.

                  (d) Accounts with respect to which the Account Debtor is not a
                  resident of the United States, except to the extent such
                  Accounts are supported by insurance, bonds or other assurances
                  satisfactory to Lender. Applies to accounts greater than
                  $35,000.

                  (e) Accounts with respect to which Borrower is or may become
                  liable to the Account Debtor for goods sold or services
                  rendered by the Account Debtor to Borrower.

                  (f) Accounts which are subject to dispute, counterclaim, or
                  setoff.

                  (g) Accounts with respect to which the goods have not been
                  shipped or delivered, or the services have not been rendered,
                  to the Account Debtor.

                  (h) Accounts with respect to which Lender, in its sole
                  discretion, deems the creditworthiness or financial condition
                  of the Account Debtor to be unsatisfactory.

                  (i) Accounts of any Account Debtor who has filed or has had
                  filed against it a petition in bankruptcy or an application
                  for relief under any provision of any state or federal
                  bankruptcy, insolvency, or debtor-in-relief acts; or who has
                  had appointed a trustee, custodian, or receiver for the assets
                  of such Account Debtor; or who has made an assignment for the
                  benefit of creditors or has become insolvent or fails
                  generally to pay its debts (including its payrolls) as such
                  debts become due.

                  j) Accounts with respect to which the Account Debtor is the
                  United States government or any department or agency of the
                  United States.

                  (k) Accounts which have not been paid in full within 90 DAYS
                  from the invoice date.

<PAGE>

                  (1) Accounts which have not been paid in full within INVOICE
                  TERMS from the invoice date. The entire balance of any Account
                  of any single Account Debtor will be ineligible whenever the
                  portion of the Account which has not been paid within INVOICE
                  TERMS from the invoice date is in excess of 10.000% of the
                  total amount outstanding on the Account. (m) That portion of
                  the Accounts of any single Account Debtor which exceeds
                  25.000% of all of Borrower's Accounts.

         Eligible Inventory. The words "Eligible Inventory" mean, at any time,
         all of Borrower's Inventory as defined below except:

                  (a) Inventory which is not owned by Borrower free and clear of
                  all security interests, liens, encumbrances, and claims of
                  third parties.

                  b) Inventory which Lender, in its sole discretion, deems to be
                  obsolete, unsalable, damaged, defective, or unfit for further
                  processing.

         ERISA. The word "ERISA" means the Employee Retirement Income Security
         Act of 1974, as amended.

         Event of Default. The words "Event of Default" mean and include without
         limitation any of the Events of Default set forth below in the section
         titled "EVENTS OF DEFAULT."

         Expiration Date. The words "Expiration Date" mean the date of
         termination of Lender's commitment to lend under this Agreement.

         Grantor. The word "Grantor" means and includes without limitation each
         and all of the persons or entities granting a Security Interest in any
         Collateral for the Indebtedness, including without limitation all
         Borrowers granting such a Security Interest.

         Guarantor. The word "Guarantor" means and includes without limitation
         each and all of the guarantors, sureties, and accommodation parties in
         connection with any Indebtedness.

         Indebtedness. The word "Indebtedness" means and includes without
         limitation all Loans, together with all other obligations, debts and
         liabilities of Borrower to Lender, or any one or more of them, as well
         as all claims by Lender against Borrower, or any one or more of them;
         whether now or hereafter existing, voluntary or involuntary, due or not
         due, absolute or contingent, liquidated or unliquidated, whether
         Borrower may be liable individually or jointly with others; whether
         Borrower may be obligated as a guarantor, surety, or otherwise; whether
         recovery upon such Indebtedness may be or hereafter may become barred
         by any statute of limitations; and whether such Indebtedness may be or
         hereafter may become otherwise unenforceable.

         Inventory. The word "Inventory" means all of Borrower's raw materials,
         work in process, finished goods, merchandise, parts and supplies, of
         every kind and description, and goods held for sale or lease or
         furnished under contracts of service in which Borrower now has or
         hereafter acquires any right, whether held by Borrower or others, and
         all documents of title, warehouse receipts, bills of lading, and all
         other documents of every type covering all or any part of the
         foregoing. Inventory includes inventory temporarily out of Borrower's
         custody or possession and all returns on Accounts.

         Lender. The word "Lender" means RIVERSIDE BANK, its successors and
         assigns.

         Line of Credit. The words "Line of Credit" mean the credit facility
         described in the Section titled "LINE OF CREDIT" below.

         Liquid Assets. The words "Liquid Assets" mean Borrower's cash on hand
         plus Borrower's readily marketable securities.

<PAGE>

         Loan. The word "Loan" or "Loans" means and includes without limitation
         any and all commercial loans and financial accommodations from Lender
         to Borrower, whether now or hereafter existing, and however evidenced,
         including without limitation those loans and financial accommodations
         described herein or described on any exhibit or schedule attached to
         this Agreement from time to time.

         Note. The word "Note" means and includes without limitation Borrower's
         promissory note or notes, if any, evidencing Borrower's Loan
         obligations in favor of Lender, as well as any substitute, replacement
         or refinancing note or notes therefor.

         Permitted Liens. The words "Permitted Liens" mean: (a) liens and
         security interests securing Indebtedness owed by Borrower to Lender;
         (b) liens for taxes, assessments, or similar charges either not yet due
         or being contested in good faith; (c) liens of materialmen, mechanics,
         warehousemen, or carriers, or other like liens arising in the ordinary
         course of business and securing obligations which are not yet
         delinquent; (d) purchase money liens or purchase money security
         interests upon or in any property acquired or held by Borrower in the
         ordinary course of business to secure indebtedness outstanding on the
         date of this Agreement or permitted to be incurred under the paragraph
         of this Agreement titled "Indebtedness and Liens"; (e) liens and
         security interests which, as of the date of this Agreement, have been
         disclosed to and approved by the Lender in writing; and (f) those liens
         and security interests which in the aggregate constitute an immaterial
         and insignificant monetary amount with respect to the net value of
         Borrower's assets.

         Related Documents. The words "Related Documents" mean and include
         without limitation all promissory notes, credit agreements, loan
         agreements, environmental agreements, guaranties, security agreements,
         mortgages, deeds of trust, and all other instruments, agreements and
         documents, whether now or hereafter existing, executed in connection
         with the Indebtedness.

         Security Agreement. The words "Security Agreement" mean and include
         without limitation any agreements, promises, covenants, arrangements,
         understandings or other agreements, whether created by law, contract,
         or otherwise, evidencing, governing, representing, or creating a
         Security Interest.

         Security Interest. The words "Security Interest" mean and include
         without limitation any type of collateral security, whether in the form
         of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel
         mortgage, chattel trust, factor's lien, equipment trust, conditional
         sale, trust receipt, lien or title retention contract, lease or
         consignment intended as a security device, or any other security or
         lien interest whatsoever, whether created by law, contract, or
         otherwise.

         SARA. The word "SARA" means the Superfund Amendments and
         Reauthorization Act of 1986 as now or hereafter amended.

         Subordinated Debt. The words "Subordinated Debt" mean indebtedness and
         liabilities of Borrower which have been subordinated by written
         agreement to indebtedness owed by Borrower to Lender in form and
         substance acceptable to Lender.

         Tangible Net Worth. The term "Tangible Net Worth" shall mean Borrower's
         total assets excluding all intangible assets (i.e., goodwill,
         trademarks, patents, copyrights, organizational expenses, and similar
         intangible items, but including leaseholds and leasehold improvements)
         and Related Party Notes less total debt. The term "Related Party Notes"
         shall mean all notes due from companies affiliated by common ownership,
         officers, directors, stockholders, or employees. The term "Debt" shall
         mean all of Borrower's liabilities excluding subordinated debt. The
         term "Subordinated Debt" shall mean indebtedness and liabilities of
         Borrower which have been subordinated by written agreement to
         indebtedness owed by Borrower to Lender in form and substance
         acceptable to Lender.

<PAGE>

         Working Capital. The words "Working Capital" mean Borrower's current
         assets, excluding prepaid expenses, less Borrower's current
         liabilities.

LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances outstanding at any time does not exceed the Borrowing
base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows.

         Conditions Precedent to Each Advance. Lender's obligation to make any
         Advance to or for the account of Borrower under this Agreement is
         subject to the following conditions precedent, with all documents,
         instruments, opinions, reports, and other items required under this
         Agreement to be in form and substance satisfactory to Lender:

                  (a) Lender shall have received evidence that this Agreement
                  and all Related Documents have been duly authorized, executed,
                  and delivered by Borrower to Lender.

                  (b) Lender shall have received such opinions of counsel,
                  supplemental opinions, and documents as Lender may request.

                  (c) The security interests in the Collateral shall have been
                  duly authorized, created, and perfected with first lien
                  priority and shall be in full force and effect.

                  (d) All guaranties required by Lender for the Line of Credit
                  shall have been executed by each Guarantor, delivered to
                  Lender, and be in full force and effect.

                  (e) Lender, at its option and for its sole benefit, shall have
                  conducted an audit of Borrower's Accounts, Inventory, books,
                  records, and operations, and Lender shall be satisfied as to
                  their condition.

                  (f) Borrower shall have paid to Lender all fees, costs, and
                  expenses specified in this Agreement and the Related Documents
                  as are then due and payable.

                  (g) There shall not exist at the time of any Advance a
                  condition which would constitute an Event of Default under
                  this Agreement.

         Making Loan Advances. Advances under the credit facility, as well as
         directions for payment from Borrower's accounts, may be requested
         orally or in writing by authorized persons. Lender may, but need not,
         require that all oral requests be confirmed in writing. Each Advance
         shall be conclusively deemed to have been made at the request of and
         for the benefit of Borrower (a) when credited to any deposit account of
         Borrower maintained with Lender or (b) when advanced in accordance with
         the instructions of an authorized person. Lender, at its option, may
         set a cutoff time, after which all requests for Advances will be
         treated as having been requested on the next succeeding Business Day.

         Mandatory Loan Repayments. If at any time the aggregate principal
         amount of the outstanding Advances shall exceed the applicable
         Borrowing Base, Borrower, immediately upon written or oral notice from
         Lender, shall pay to Lender an amount equal to the difference between
         the outstanding principal balance of the Advances and the Borrowing
         Base. On the Expiration Date, Borrower shall pay to Lender in full the
         aggregate unpaid principal amount of all Advances then outstanding and
         all accrued unpaid interest, together with all other applicable fees,
         costs and charges, if any, not yet paid.

         Loan Account. Lender shall maintain on its books a record of account in
         which Lender shall make entries for each Advance and such other debits

<PAGE>

         and credits as shall be appropriate in connection with the credit
         facility. Lender shall provide Borrower with periodic statements of
         Borrower's account, which statements shall be considered to be correct
         and conclusively binding on Borrower unless Borrower notifies Lender to
         the contrary within thirty (30) days after Borrower's receipt of any
         such statement which Borrower deems to be incorrect.

COLLATERAL. To secure payment of the Line of Credit and performance of all other
Loans, obligations and duties owed by Borrower to Lender, Borrower (and others,
if required) shall grant to Lender Security Interests in such property and
assets as Lender may require (the "Collateral"), including without limitation
Borrower's present and future Accounts, general intangibles, and Inventory.
Lender's Security Interests in the Collateral shall be continuing liens and
shall include the proceeds and products of the Collateral, including without
limitation the proceeds of any insurance. With respect to the Collateral,
Borrower agrees and represents and warrants to Lender:

         Perfection of Security Interests. Borrower agrees to execute such
         financing statements and to take whatever other actions are requested
         by Lender to perfect and continue Lender's Security Interests in the
         Collateral. Upon request of Lender, Borrower will deliver to Lender any
         and all of the documents evidencing or constituting the Collateral, and
         Borrower will note Lender's interest upon any and all chattel paper if
         not delivered to Lender for possession by Lender. Contemporaneous with
         the execution of this Agreement, Borrower will execute one or more UCC
         financing statements and any similar statements as may be required by
         applicable law, and will file such financing statements and all such
         similar statements in the appropriate location or locations. Borrower
         hereby appoints Lender as its irrevocable attorney-in-fact for the
         purpose of executing any documents necessary to perfect or to continue
         any Security Interest. Lender may at any time, and without further
         authorization from Borrower, file a carbon, photograph, facsimile, or
         other reproduction of any financing statement for use as a financing
         statement. Borrower will reimburse Lender for all expenses for the
         perfection, termination, and the continuation of the perfection of
         Lender's security interest in the Collateral. Borrower promptly will
         notify Lender of any change in Borrower's name including any change to
         the assumed business names of Borrower. Borrower also promptly will
         notify Lender of any change in Borrower's Social Security Number or
         Employer Identification Number. Borrower further agrees to notify
         Lender in writing prior to any change in address or location of
         Borrower's principal governance office or should Borrower merge or
         consolidate with any other entity.

         Collateral Records. Borrower does now, and at all times hereafter
         shall, keep correct and accurate records of the Collateral, all of
         which records shall be available to Lender or Lender's representative
         upon demand for inspection and copying at any reasonable time. With
         respect to the Accounts, Borrower agrees to keep and maintain such
         records as Lender may require, including without limitation information
         concerning Eligible Accounts and Account balances and agings. With
         respect to the Inventory, Borrower agrees to keep and maintain such
         records as Lender may require, including without limitation information
         concerning Eligible Inventory and records itemizing and describing the
         kind, type, quality, and quantity of Inventory, Borrower's Inventory
         costs and selling prices, and the daily withdrawals and additions to
         Inventory.

         Collateral Schedules. Concurrently with the execution and delivery of
         this Agreement, Borrower shall execute and deliver to Lender schedules
         of Accounts and Inventory and Eligible Accounts and Eligible Inventory,
         in form and substance satisfactory to the Lender. Thereafter and at
         such frequency as Lender shall require, Borrower shall execute and
         deliver to Lender such supplemental schedules of Eligible Accounts and
         Eligible Inventory and such other matters and information relating to
         the Accounts and Inventory as Lender may request.

         Representations and Warranties Concerning Accounts. With respect to the
         Accounts, Borrower represents and warrants to Lender: (a) Each Account
         represented by Borrower to be an Eligible Account for purposes of this
         Agreement conforms to the requirements of the definition of an Eligible
         Account; (b) All Account information listed on schedules delivered to
         Lender will be true and correct, subject to immaterial variance; and
         (c) Lender, its assigns, or agents shall have the right at any time and
         at Borrower's expense to inspect, examine, and audit Borrower's records
         and to confirm with Account Debtors the accuracy of such Accounts.

<PAGE>

         Representations and Warranties Concerning Inventory. With respect to
         the Inventory, Borrower represents and warrants to Lender: (a) All
         Inventory represented by Borrower to be Eligible Inventory for purposes
         of this Agreement conforms to the requirements of the definition of
         Eligible Inventory; (b) All Inventory values listed on schedules
         delivered to Lender will be true and correct, subject to immaterial
         variance; (c) The value of the Inventory will be determined on a
         consistent accounting basis; (d) Except as agreed to the contrary by
         Lender in writing, all Eligible Inventory is now and at all times
         hereafter will be in Borrower's physical possession and shall not be
         held by others on consignment, sale on approval, or sale or return; (e)
         Except as reflected in the Inventory schedules delivered to Lender, all
         Eligible Inventory is now and at all times hereafter will be of good
         and merchantable quality, free from defects; (f) Eligible Inventory is
         not now and will not at any time hereafter be stored with a bailee,
         warehouseman, or similar party without Lender's prior written consent,
         and, in such event, Borrower will concurrently at the time of bailment
         cause any such bailee, warehouseman, or similar party to issue and
         deliver to Lender, in form acceptable to Lender, warehouse receipts in
         Lender's name evidencing the storage of Inventory; and (g) Lender, its
         assigns, or agents shall have the right at any time and at Borrower's
         expense to inspect and examine the Inventory and to check and test the
         same as to quality, quantity, value, and condition.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

         Organization. Borrower is a corporation which is duly organized,
         validly existing, and in good standing under the laws of the state of
         Borrower's incorporation and is validly existing and in good standing
         in all states in which Borrower is doing business. Borrower has the
         full power and authority to own its properties and to transact the
         businesses in which it is presently engaged or presently proposes to
         engage. Borrower also is duly qualified as a foreign corporation and is
         in good standing in all states in which the failure to so qualify would
         have a material adverse effect on its businesses or financial
         condition.

         Authorization. The execution, delivery, and performance of this
         Agreement and all Related Documents by Borrower, to the extent to be
         executed, delivered or performed by Borrower, have been duly authorized
         by all necessary action by Borrower; do not require the consent or
         approval of any other person, regulatory authority or governmental
         body; and do not conflict with, result in a violation of, or constitute
         a default under (a) any provision of its articles of incorporation or
         organization, or bylaws, or any agreement or other instrument binding
         upon Borrower or (b) any law, governmental regulation, court decree, or
         order applicable to Borrower.

         Financial Information. Each financial statement of Borrower supplied to
         Lender truly and completely disclosed Borrower's financial condition as
         of the date of the statement, and there has been no material adverse
         change in Borrower's financial condition subsequent to the date of the
         most recent financial statement supplied to Lender. Borrower has no
         material contingent obligations except as disclosed in such financial
         statements.

         Legal Effect. This Agreement constitutes, and any instrument or
         agreement required hereunder to be given by Borrower when delivered
         will constitute, legal, valid and binding obligations of Borrower
         enforceable against Borrower in accordance with their respective terms.

         Properties. Except for Permitted Liens, Borrower owns and has good
         title to all of Borrower's properties free and clear of all Security
         Interests, and has not executed any security documents or financing
         statements relating to such properties. All of Borrower's properties
         are titled in Borrower's legal name, and Borrower has not used, or
         filed a financing statement under, any other name for at least the last
         five (5) years.

         Hazardous Substances. The terms "hazardous waste," "hazardous
         substance," "disposal," "release," and "threatened release," as used in
         this Agreement, shall have the same meanings as set forth in the

<PAGE>

         "CERCLA," "SARA," the Hazardous Materials Transportation Act, 49 U.S.C.
         Section 1801, et seq., the Resource Conservation and Recovery Act, 42
         U.S.C. Section 6901, et seq., or other applicable state or Federal
         laws, rules, or regulations adopted pursuant to any of the foregoing.
         Except as disclosed to and acknowledged by Lender in writing, Borrower
         represents and warrants that: (a) During the period of Borrower's
         ownership of the properties, there has been no use, generation,
         manufacture, storage, treatment, disposal, release or threatened
         release of any hazardous waste or substance by any person on, under,
         about or from any of the properties. (b) Borrower has no knowledge of,
         or reason to believe that there has been (i) any use, generation,
         manufacture, storage, treatment, disposal, release, or threatened
         release of any hazardous waste or substance on, under, about or from
         the properties by any prior owners or occupants of any of the
         properties, or (ii) any actual or threatened litigation or claims of
         any kind by any person relating to such matters. (c) Neither Borrower
         nor any tenant, contractor, agent or other authorized user of any of
         the properties shall use, generate, manufacture, store, treat, dispose
         of, or release any hazardous waste or substance on, under, about or
         from any of the properties; and any such activity shall be conducted in
         compliance with all applicable federal, state, and local laws,
         regulations, and ordinances, including without limitation those laws,
         regulations and ordinances described above. Borrower authorizes Lender
         and its agents to enter upon the properties to make such inspections
         and tests as Lender may deem appropriate to determine compliance of the
         properties with this section of the Agreement. Any inspections or tests
         made by Lender shall be at Borrower's expense and for Lender's purposes
         only and shall not be construed to create any responsibility or
         liability on the part of Lender to Borrower or to any other person. The
         representations and warranties contained herein are based on Borrower's
         due diligence in investigating the properties for hazardous waste and
         hazardous substances. Borrower hereby (a) releases and waives any
         future claims against Lender for indemnity or contribution in the event
         Borrower becomes liable for cleanup or other costs under any such laws,
         and (b) agrees to indemnify and hold harmless Lender against any and
         all claims, losses, liabilities, damages, penalties, and expenses which
         Lender may directly or indirectly sustain or suffer resulting from a
         breach of this section of the Agreement or as a consequence of any use,
         generation, manufacture, storage, disposal, release or threatened
         release of a hazardous waste or substance on the properties. The
         provisions of this section of the Agreement, including the obligation
         to indemnify, shall survive the payment of the Indebtedness and the
         termination or expiration of this Agreement and shall not be affected
         by Lender's acquisition of any interest in any of the properties,
         whether by foreclosure or otherwise.

         Litigation and Claims. No litigation, claim, investigation,
         administrative proceeding or similar action (including those for unpaid
         taxes) against Borrower is pending or threatened, and no other event
         has occurred which may materially adversely affect Borrower's financial
         condition or properties, other than litigation, claims, or other
         events, if any, that have been disclosed to and acknowledged by Lender
         in writing.

         Taxes. To the best of Borrower's knowledge, all tax returns and reports
         of Borrower that are or were required to be filed, have been filed, and
         all taxes, assessments and other governmental charges have been paid in
         full, except those presently being or to be contested by Borrower in
         good faith in the ordinary course of business and for which adequate
         reserves have been provided.

         Lien Priority. Unless otherwise previously disclosed to Lender in
         writing, Borrower has not entered into or granted any Security
         Agreements, or permitted the filing or attachment of any Security
         Interests on or affecting any of the Collateral directly or indirectly
         securing repayment of Borrower's Loan and Note, that would be prior or
         that may in any way be superior to Lender's Security Interests and
         rights in and to such Collateral.

         Binding Effect. This Agreement, the Note, all Security Agreements
         directly or indirectly securing repayment of Borrower's Loan and Note
         and all of the Related Documents are binding upon Borrower as well as
         upon Borrower's successors, representatives and assigns, and are
         legally enforceable in accordance with their respective terms.

         Commercial Purposes. Borrower intends to use the Loan proceeds solely
         for business or commercial related purposes.

<PAGE>

         Employee Benefit Plans. Each employee benefit plan as to which Borrower
         may have any liability complies in all material respects with all
         applicable requirements of law and regulations, and (i) no Reportable
         Event nor Prohibited Transaction (as defined in ERISA) has occurred
         with respect to any such plan, (ii) Borrower has not withdrawn from any
         such plan or initiated steps to do so, (iii) no steps have been taken
         to terminate any such plan, and (iv) there are no unfunded liabilities
         other than those previously disclosed to Lender in writing.

         Location of Borrower's Offices and Records. Borrower's place of
         business, or Borrower's Chief executive office, if Borrower has more
         than one place of business, is located at 6210 BURY DRIVE, EDEN
         PRAIRIE, MN 55346. Unless Borrower has designated otherwise in writing
         this location is also the office or offices where Borrower keeps its
         records concerning the Collateral.

         Year 2000. Borrower warrants and represents that all software utilized
         in the conduct of Borrower's business will have appropriate
         capabilities and compatiblity for operation to handle calendar dates
         falling on or after January 1, 2000, and all information pertaining to
         such calendar dates, in the same manner and with the same functionality
         as the software does respecting calendar dates falling on or before
         December 31, 1999. Further, Borrower warrants and represents that the
         data-related user interface functions, data-fields, and data-related
         program instructions and functions of the software include the
         indication of the century.

         Information. All information heretofore or contemporaneously herewith
         furnished by Borrower to Lender for the purposes of or in connection
         with this Agreement or any transaction contemplated hereby is, and all
         information hereafter furnished by or on behalf of Borrower to Lender
         will be, true and accurate in every material respect on the date as of
         which such information is dated or certified; and none of such
         information is or will be incomplete by omitting to state any material
         fact necessary to make such information not misleading.

         Survival of Representations and Warranties. Borrower understands and
         agrees that Lender, without independent investigation, is relying upon
         the above representations and warranties in extending Loan Advances to
         Borrower. Borrower further agrees that the foregoing representations
         and warranties shall be continuing in nature and shall remain in full
         force and effect until such time as Borrower's Indebtedness shall be
         paid in full, or until this Agreement shall be terminated in the manner
         provided above, whichever is the last to occur.

AFFIRMATIVE  COVENANTS.  Borrower  covenants  and agrees  with  Lender  that,
while this  Agreement  is in effect Borrower will:

         Litigation. Promptly inform Lender in writing of (a) all material
         adverse changes in Borrower's financial condition, and (b) all existing
         and all threatened litigation, claims, investigations, administrative
         proceedings or similar actions affecting Borrower or any Guarantor
         which could materially affect the financial condition of Borrower or
         the financial condition of any Guarantor.

         Financial Records. Maintain its books and records in accordance with
         generally accepted accounting principles, applied on a consistent
         basis, and permit Lender to examine and audit Borrower's books and
         records at all reasonable times.

         Financial Statements. Furnish Lender with, as soon as available, but in
         no event later than ninety (90) days after the end of each fiscal year,
         Borrower's balance sheet and income statement for the year ended,
         audited by a certified public accountant satisfactory to Lender, and,
         as soon as available, but in no event later than thirty (30) days after
         the end of each month, Borrower's balance sheet and profit and loss
         statement for the period ended, prepared and certified as correct to
         the best knowledge and belief by Borrower's chief financial officer or
         other officer or person acceptable to Lender. All financial reports
         required to be provided under this Agreement shall be prepared in
         accordance with generally accepted accounting principles, applied on a
         consistent basis, and certified by Borrower as being true and correct.

<PAGE>

         Additional Information. Furnish such additional information and
         statements, lists of assets and liabilities, agings of receivables and
         payables, inventory schedules, budgets, forecasts, tax returns, and
         other reports with respect to Borrower's financial condition and
         business operations as Lender may request from time to time. Additional
         information shall be delivered according to the following schedule:
         ACCOUNTS RECEIVABLES LISTING DUE MONTHLY WITHIN 30 DAYS OF MONTH END.
         THE BORROWERS PROJECTIONS WILL BE SUBSTANTIALLY CORRECT. FINANCIAL
         STATEMENTS PROVIDED BY THE BORROWER WILL BE GIVEN TO THE LENDER NO
         LATER THAN 20 DAYS FROM AN ADVANCE ON THE NOTE. COLLATERAL SCHEDULE IS
         DUE MONTHLY WITHIN 30 DAYS OF MONTH END ONLY WHEN THE BORROWER HAS A
         BALANCE ON THE NOTE. COMPANY IS TO BE SUBSTANTIALLY ON BUDGET AS
         PROVIDED ON NOVEMBER 19,1998.

         Financial Covenants and Ratios. Comply with the following covenants and
         ratios:

                  Tangible  Net Worth.  Maintain a minimum  Tangible  Net Worth
                  of not less than  $1,200,000.00  at
                  February 15, 1999 and monthly thereafter.

         For purposes of this Agreement and to the extent the following terms
         are utilized in this Agreement, the term "Tangible Net Worth" shall
         mean Borrower's total assets excluding all intangible assets (i.e.,
         goodwill, trademarks, patents, copyrights, organizational expenses, and
         similar intangible items, but including leaseholds and leasehold
         improvements) and Related Party Notes less total debt. The term
         "Related Party Notes" shall mean all notes due from companies
         affiliated by common ownership, officers, directors, stockholders, or
         employees. The term "Debt" shall mean all of Borrower's liabilities
         excluding subordinated debt. The term "Subordinated Debt" shall mean
         indebtedness and liabilities of Borrower which have been subordinated
         by written agreement to indebtedness owed by Borrower to Lender in form
         and substance acceptable to Lender. The term "Working Capital" shall
         mean Borrower's current assets, excluding prepaid expenses, less
         Borrower's current liabilities. The term "Liquid Assets" shall mean
         Borrower's cash on hand plus Borrower's receivables. The term "Cash
         Flow" shall mean net income after taxes, and exclusive of extraordinary
         gains and income, plus depreciation and amortization. Except as
         provided above, all computations made to determine compliance with the
         requirements contained in this paragraph shall be made in accordance
         with generally accepted accounting principles, applied on a consistent
         basis, and certified by Borrower as being true and correct.

         Insurance. Maintain fire and other risk insurance, public liability
         insurance, and such other insurance as Lender may require with respect
         to Borrower's properties and operations, in form, amounts, coverages
         and with insurance companies reasonably acceptable to Lender. Borrower,
         upon request of Lender, will deliver to Lender from time to time the
         policies or certificates of insurance in form satisfactory to Lender,
         including stipulations that coverages will not be cancelled or
         diminished without at least ten (10) days' prior written notice to
         Lender. Each insurance policy also shall include an endorsement
         providing that coverage in favor of Lender will not be impaired in any
         way by any act, omission or default of Borrower or any other person. In
         connection with all policies covering assets in which Lender holds or
         is offered a security interest for the Loans, Borrower will provide
         Lender with such loss payable or other endorsements as Lender may
         require.

         Insurance Reports. Furnish to Lender, upon request of Lender, reports
         on each existing insurance policy showing such information as Lender
         may reasonably request, including without limitation the following: (a)
         the name of the insurer; (b) the risks insured; (c) the amount of the
         policy; (d) the properties insured; (e) the then current property
         values on the basis of which insurance has been obtained, and the
         manner of determining those values; and (f) the expiration date of the
         policy. In addition, upon request of Lender (however not more often
         than annually), Borrower will have an independent appraiser
         satisfactory to Lender determine, as applicable, the actual cash value
         or replacement cost of any Collateral. The cost of such appraisal shall
         be paid by Borrower.

<PAGE>

         Other Agreements. Comply with all terms and conditions of all other
         agreements, whether now or hereafter existing, between Borrower and any
         other party and notify Lender immediately in writing of any default in
         connection with any other such agreements.

         Loan Fees and Charges. In addition to all other agreed upon fees and
         charges, pay the following: $5,000.00.

         Loan Proceeds. Use all Loan proceeds solely for Borrower's business
         operations, unless specifically consented to the contrary by Lender in
         writing.

         Taxes, Charges and Liens. Pay and discharge when due all of its
         Indebtedness and obligations, including without limitation all
         assessments, taxes, governmental charges, levies and liens, of every
         kind and nature, imposed upon Borrower or its properties, income, or
         profits, prior to the date on which penalties would attach, and all
         lawful claims that, if unpaid, might become a lien or charge upon any
         of Borrower's properties, income, or profits. Provided however,
         Borrower will not be required to pay and discharge any such assessment,
         tax, charge, levy, lien or claim so long as (a) the legality of the
         same shall be contested in good faith by appropriate proceedings, and
         (b) Borrower shall have established on its books adequate reserves with
         respect to such contested assessment, tax, charge, levy, lien, or claim
         in accordance with generally accepted accounting practices. Borrower,
         upon demand of Lender, will furnish to Lender evidence of payment of
         the assessments, taxes, charges, levies, liens and claims and will
         authorize the appropriate governmental official to deliver to Lender at
         any time a written statement of any assessments, taxes, charges,
         levies, liens and claims against Borrowers properties, income, or
         profits.

         Performance. Perform and comply with all terms, conditions, and
         provisions set forth in this Agreement and in the Related Documents in
         a timely manner, and promptly notify Lender if Borrower learns of the
         occurrence of any event which constitutes an Event of Default under
         this Agreement or under any of the Related Documents.

         Operations. Maintain executive and management personnel with
         substantially the same qualifications and experience as the present
         executive and management personnel; provide written notice to Lender of
         any change in executive and management personnel; conduct its business
         affairs in a reasonable and prudent manner and in compliance with all
         applicable federal, state and municipal laws, ordinances, rules and
         regulations respecting its properties, charters, businesses and
         operations, including without limitation, compliance with the Americans
         With Disabilities Act and with all minimum funding standards and other
         requirements of ERISA and other laws applicable to Borrower's employee
         benefit plans.

         Inspection. Permit employees or agents of Lender at any reasonable time
         to inspect any and all Collateral for the Loan or Loans and Borrower's
         other properties and to examine or audit Borrower's books, accounts,
         and records and to make copies and memoranda of Borrower's books,
         accounts, and records. If Borrower now or at any time hereafter
         maintains any records (including without limitation computer generated
         records and computer software programs for the generation of such
         records) in the possession of a third party, Borrower, upon request of
         Lender, shall notify such party to permit Lender free access to such
         records at all reasonable times and to provide Lender with copies of
         any records it may request, all at Borrower's expense.

         Environmental Compliance and Reports. Borrower shall comply in all
         respects with all environmental protection federal, state and local
         laws, statutes, regulations and ordinances; not cause or permit to
         exist, as a result of an intentional or unintentional action or
         omission on its part or on the part of any third party, on property
         owned and/or occupied by Borrower, any environmental activity where
         damage may result to the environment, unless such environmental
         activity is pursuant to and in compliance with the conditions of a

<PAGE>

         permit issued by the appropriate federal, state or local governmental
         authorities; shall furnish to Lender promptly and in any event within
         thirty (30) days after receipt thereof a copy of any notice, summons,
         lien, citation, directive, letter or other communication from any
         governmental agency or instrumentality concerning any intentional or
         unintentional action or omission on Borrower's part in connection with
         any environmental activity whether or not there is damage to the
         environment and/or other natural resources.

         Additional Assurances. Make, execute and deliver to Lender such
         promissory notes, mortgages, deeds of trust, security agreements,
         financing statements, instruments, documents and other agreements as
         Lender or its attorneys may reasonably request to evidence and secure
         the Loans and to perfect all Security Interests.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

         Indebtedness and Liens. (a) Except for trade debt incurred in the
         normal course of business and indebtedness to Lender contemplated by
         this Agreement, create, incur or assume indebtedness for borrowed
         money, including capital leases, (b) except as allowed as a Permitted
         Lien, sell, transfer, mortgage, assign, pledge, lease, grant a security
         interest in, or encumber any of Borrower's assets, or (c) sell with
         recourse any of Borrower's accounts, except to Lender.

         Continuity of Operations. (a) Engage in any business activities
         substantially different than those in which Borrower is presently
         engaged, (b) cease operations, liquidate, merge, transfer, acquire or
         consolidate with any other entity, change ownership, change its name,
         dissolve or transfer or sell Collateral out of the ordinary course of
         business, (c) pay any dividends on Borrower's stock (other than
         dividends payable in its stock), provided, however that notwithstanding
         the foregoing, but only so long as no Event of Default has occurred and
         is continuing or would result from the payment of dividends, if
         Borrower is a "Subchapter S Corporation" (as defined in the Internal
         Revenue Code of 1986, as amended), Borrower may pay cash dividends on
         its stock to its shareholders from time to time in amounts necessary to
         enable the shareholders to pay income taxes and make estimated income
         tax payments to satisfy their liabilities under federal and state law
         which arise solely from their status as Shareholders of a Subchapter S
         Corporation because of their ownership of shares of stock of Borrower,
         or (d) purchase or retire any of Borrower's outstanding shares or alter
         or amend Borrower's capital structure.

         Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance
         money or assets, (b) purchase, create or acquire any interest in any
         other enterprise or entity, or (c) incur any obligation as surety or
         guarantor other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the Indebtedness against any and all such accounts.

<PAGE>

EVENTS OF DEFAULT.  Each of the following shall constitute an Event of Default 
                    under this Agreement:

         Default on Indebtedness. Failure of Borrower to make any payment when
         due on the Loans.

         Other Defaults. Failure of Borrower or any Grantor to comply with or to
         perform when due any other term, obligation, covenant or condition
         contained in this Agreement or in any of the Related Documents, or
         failure of Borrower to comply with or to perform any other term,
         obligation, covenant or condition contained in any other agreement
         between Lender and Borrower.

         False Statements. Any warranty, representation or statement made or
         furnished to Lender by or on behalf of Borrower or any Grantor under
         this Agreement or the Related Documents is false or misleading in any
         material respect at the time made or furnished, or becomes false or
         misleading at any time thereafter.

         Defective Collateralization. This Agreement or any of the Related
         Documents ceases to be in full force and effect (including failure of
         any Security Agreement to create a valid and perfected Security
         Interest) at any time and for any reason.

         Insolvency. The dissolution or termination of Borrower's existence as a
         going business, the insolvency of Borrower, the appointment of a
         receiver for any part of Borrower's property, any assignment for the
         benefit of creditors, any type of creditor workout, or the commencement
         of any proceeding under any bankruptcy or insolvency laws by or against
         Borrower.

         Creditor or Forfeiture Proceedings. Commencement of foreclosure or
         forfeiture proceedings, whether by judicial proceeding, self-help,
         repossession or any other method, by any creditor of Borrower, any
         creditor of any Grantor against any collateral securing the
         Indebtedness, or by any governmental agency. This includes a
         garnishment, attachment, or levy on or of any of Borrower's deposit
         accounts with Lender. However, this Event of Default shall not apply if
         there is a good faith dispute by Borrower or Grantor, as the case may
         be, as to the validity or reasonableness of the claim which is the
         basis of the creditor or forfeiture proceeding, and if Borrower or
         Grantor gives Lender written notice of the creditor or forfeiture
         proceeding and furnishes reserves or a surety bond for the creditor or
         forfeiture proceeding satisfactory to Lender.

         Events Affecting Guarantor. Any of the preceding events occurs with
         respect to any Guarantor of any of the Indebtedness or any Guarantor
         dies or becomes incompetent, or revokes or disputes the validity of, or
         liability under, any Guaranty of the Indebtedness. Lender, at its
         option, may, but shall not be required to, permit the Guarantor's
         estate to assume unconditionally the obligations arising under the
         guaranty in a manner satisfactory to Lender, and, in doing so, cure the
         Event of Default.

         Change In Ownership. Any change in ownership of twenty-five percent
         (25%) or more of the common stock of Borrower.

         Adverse Change. A material adverse change occurs in Borrower's
         financial condition, or Lender believes the prospect of payment or
         performance of the Indebtedness is impaired.

         Year 2000 Compliance Failure. Failure to meet the deadlines required in
         the Year 2000 Compliance Agreement to be Year 2000 Compliant or a
         reasonable likelihood that Borrower cannot be Year 2000 Compliant on or
         before December 31, 1999.

         Insecurity.  Lender, in good faith, deems itself insecure.

         Right to Cure. If any default, other than a Default on Indebtedness, is
         curable and if Borrower or Grantor, as the case may be, has not been
         given a notice of a similar default within the preceding twelve (12)

<PAGE>

         months, it may be cured (and no Event of Default will have occurred) if
         Borrower or Grantor, as the case may be, after receiving written notice
         from Lender demanding cure of such default: (a) cures the default
         within fifteen (15) days; or (b) if the cure requires more than fifteen
         (15) days, immediately initiates steps which Lender deems in Lender's
         sole discretion to be sufficient to cure the default and thereafter
         continues and completes all reasonable and necessary steps sufficient
         to produce compliance as soon as reasonably practical.

         EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur,
         except where otherwise provided in this Agreement or the Related
         Documents, all commitments and obligations of Lender under this
         Agreement or the Related Documents or any other agreement immediately
         will terminate (including any obligation to make Loan Advances or
         disbursements), and, at Lender's option, all Indebtedness immediately
         will become due and payable, all without notice of any kind to
         Borrower, except that in the case of an Event of Default of the type
         described in the "Insolvency" subsection above, such acceleration shall
         be automatic and not optional. In addition, Lender shall have all the
         rights and remedies provided in the Related Documents or available at
         law, in equity, or otherwise. Except as may be prohibited by applicable
         law, all of Lender's rights and remedies shall be cumulative and may be
         exercised singularly or concurrently. Election by Lender to pursue any
         remedy shall not exclude pursuit of any other remedy, and an election
         to make expenditures or to take action to perform an obligation of
         Borrower or of any Grantor shall not affect Lender's right to declare a
         default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of
                           this Agreement:

         Amendments. This Agreement, together with any Related Documents,
         constitutes the entire understanding and agreement of the parties as to
         the matters set forth in this Agreement. No alteration of or amendment
         to this Agreement shall be effective unless given in writing and signed
         by the party or parties sought to be charged or bound by the alteration
         or amendment.

         Applicable Law. This Agreement has been delivered to Lender and
         accepted by Lender in the State of Minnesota. If there is a lawsuit,
         Borrower agrees upon Lender's request to submit to the jurisdiction of
         the courts of HENNEPIN County, the State of Minnesota. This Agreement
         shall be governed by and construed in accordance with the laws of the
         State of Minnesota.

         Caption Headings. Caption headings in this Agreement are for
         convenience purposes only and are not to be used to interpret or define
         the provisions of this Agreement.

         Multiple Parties; Corporate Authority. All obligations of Borrower
         under this Agreement shall be joint and several, and all references to
         Borrower shall mean each and every Borrower. This means that each of
         the persons signing below is responsible for all obligations in this
         Agreement.

         Consent to Loan Participation. Borrower agrees and consents to Lender's
         sale or transfer, whether now or later, of one or more participation
         interests in the Loans to one or more purchasers, whether related or
         unrelated to Lender. Lender may provide, without any limitation
         whatsoever, to any one or more purchasers, or potential purchasers, any
         information or knowledge Lender may have about Borrower or about any
         other matter relating to the Loan, and Borrower hereby waives any
         rights to privacy it may have with respect to such matters. Borrower
         additionally waives any and all notices of sale of participation
         interests, as well as all notices of any repurchase of such
         participation interests. Borrower also agrees that the purchasers of
         any such participation interests will be considered as the absolute
         owners of such interests in the Loans and will have all the rights
         granted under the participation agreement or agreements governing the
         sale of such participation interests. Borrower further waives all
         rights of offset or counterclaim that it may have now or later against
         Lender or against any purchaser of such a participation interest and
         unconditionally agrees that either Lender or such purchaser may enforce
         Borrower's obligation under the Loans irrespective of the failure or
         Insolvency of any holder of any Interest in the Loans. Borrower further
         agrees that the purchaser of any such participation Interests may
         enforce its Interests irrespective of any personal claims or defenses
         that Borrower may have against Lender.

<PAGE>

         Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
         expenses, including without limitation attorneys' fees, incurred in
         connection with the preparation, execution, enforcement, modification
         and collection of this Agreement or in connection with the Loans made
         pursuant to this Agreement. Lender may pay someone else to help collect
         the Loans and to enforce this Agreement, and Borrower will pay that
         amount. This includes, subject to any limits under applicable law,
         Lender's attorneys' fees and Lender's legal expenses, whether or not
         there is a lawsuit, including attorneys' fees for bankruptcy
         proceedings (including efforts to modify or vacate any automatic stay
         or injunction), appeals, and any anticipated post-judgment collection
         services. Borrower also will pay any court costs, in addition to all
         other sums provided by law.

         Notices. All notices required to be given under this Agreement shall be
         given in writing, may be sent by telefacsimile (unless otherwise
         required by law), and shall be effective when actually delivered or
         when deposited with a nationally recognized overnight courier or
         deposited in the United States mail, first class, postage prepaid,
         addressed to the party to whom the notice is to be given at the address
         shown above. Any party may change its address for notices under this
         Agreement by giving formal written notice to the other parties,
         specifying that the purpose of the notice is to change the party's
         address. To the extent permitted by applicable law, if there is more
         than one Borrower, notice to any Borrower will constitute notice to all
         Borrowers. For notice purposes, Borrower will keep Lender informed at
         all times of Borrower's current addresse(es).

         Severability. If a court of competent jurisdiction finds any provision
         of this Agreement to be invalid or unenforceable as to any person or
         circumstance, such finding shall not render that provision invalid or
         unenforceable as to any other persons or circumstances. If feasible,
         any such offending provision shall be deemed to be modified to be
         within the limits of enforceability or validity; however, if the
         offending provision cannot be so modified, it shall be stricken and all
         other provisions of this Agreement in all other respects shall remain
         valid and enforceable.

         Subsidiaries and Affiliates of Borrower. To the extent the context of
         any provisions of this Agreement makes it appropriate, including
         without limitation any representation, warranty or covenant, the word
         "Borrower" as used herein shall include all subsidiaries and affiliates
         of Borrower. Notwithstanding the foregoing however, under no
         circumstances shall this Agreement be construed to require Lender to
         make any Loan or other financial accommodation to any subsidiary or
         affiliate of Borrower.

         Successors and Assigns. All covenants and agreements contained by or on
         behalf of Borrower shall bind its successors and assigns and shall
         inure to the benefit of Lender, its successors and assigns. Borrower
         shall not, however, have the right to assign its rights under this
         Agreement or any interest therein, without the prior written consent of
         Lender.

         Survival. All warranties, representations, and covenants made by
         Borrower in this Agreement or in any certificate or other instrument
         delivered by Borrower to Lender under this Agreement shall be
         considered to have been relied upon by Lender and will survive the
         making of the Loan and delivery to Lender of the Related Documents,
         regardless of any investigation made by Lender or on Lender's behalf.

         Time Is of the Essence. Time is of the essence in the performance of
         this Agreement.

         Waiver. Lender shall not be deemed to have waived any rights under this
         Agreement unless such waiver is given in writing and signed by Lender.
         No delay or omission on the part of Lender in exercising any right
         shall operate as a waiver of such right or any other right. A waiver by
         Lender of a provision of this Agreement shall not prejudice or
         constitute a waiver of Lender's right otherwise to demand strict
         compliance with that provision or any other provision of this
         Agreement. No prior waiver by Lender, nor any course of dealing between

<PAGE>

         Lender and Borrower, or between Lender and any Grantor, shall
         constitute a waiver of any of Lender's rights or of any obligations of
         Borrower or of any Grantor as to any future transactions. Whenever the
         consent of Lender is required under this Agreement, the granting of
         such consent by Lender in any instance shall not constitute continuing
         consent in subsequent instances where such consent is required, and in
         all cases such consent may be granted or withheld in the sole
         discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN AGREEMENT, AND
BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF FEBRUARY 14, 1999.

BORROWER:

CODA MUSIC TECHNOLOGY, INC.

By:  ______________________________         By:  _____________________________ 
     RON RAUP, PRESIDENT                         BARBARA REMLEY, CFO


LENDER:

RIVERSIDE BANK

By:  ______________________________ 
     Authorized Officer


<PAGE>

<TABLE>
<CAPTION>


                                                     CHANGE IN TERMS AGREEMENT

----------------- -------------- ------------- ----------- --------- ------------ ------------ --------- ----------
  Principal        Loan Date       Maturity      Loan No      Call    Collateral    Account     Officer   Initials
 $500,000.00                      02-14-2000    90485255       01        3000        115342      GRA
-------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of
                 this document to any particular loan or item.
-------------------------------------------------------------------------------------------------------------------
<S>             <C>                                               <C>           <C>   
Borrower:       CODA MUSIC TECHNOLOGY, INC.                       Lender:       RIVERSIDE BANK
                6210 BURY DRIVE                                                 MINNESOTA CENTER OFFICE
                EDEN PRAIRIE, MN 55346                                          7760 FRANCE AVENUE SOUTH, SUITE 125
                                                                                BLOOMINGTON, MN 55435

====================================================================================================================

</TABLE>


Principal Amount: $500,000.00             Date of Agreement:  February 14, 1999


DESCRIPTION OF EXISTING INDEBTEDNESS. A PROMISSORY NOTE# 90485255 DATED FEBRUARY
14, 1997 IN THE ORIGINAL AMOUNT OF $500,000.00. CHANGE IN TERMS AGREEMENT
#90485255 DATED FEBRUARY 14, 1998.

DESCRIPTION OF COLLATERAL. ALL CORPORATE ASSETS PER COMMERCIAL SECURITY
AGREEMENT DATED FEBRUARY 14, 1997.

DESCRIPTION OF CHANGE IN TERMS.  RENEW WORKING CAPITAL LINE OF CREDIT.

PROMISE TO PAY. CODA MUSIC TECHNOLOGY, INC. ("Borrower") promises to pay to
RIVERSIDE BANK ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Five Hundred Thousand & 00/100 Dollars
($500,000.00) or so much as may be outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on February 14, 2000. In addition, Borrower
will pay regular monthly payments of accrued unpaid interest beginning March 14,
1999, and all subsequent interest payments are due on the same day of each month
after that. The annual interest rate for this Agreement is computed on a 365/360
basis; that is, by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding. Borrower will pay
Lender at Lender's address shown above or at such other place as Lender may
designate in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and late charges.

VARIABLE INTEREST RATE. The interest rate on this Agreement is subject to change
from time to time based on changes in an independent index which is the PRIME
RATE OF INTEREST AS PUBLISHED EACH BUSINESS DAY IN THE MONEY RATES SECTION OF
THE WALL STREET JOURNAL (the "Index"). The Index is not necessarily the lowest
rate charged by Lender on its loans. If the Index becomes unavailable during the
term of this loan, Lender may designate a substitute index after notice to
Borrower. Lender will tell Borrower the current Index rate upon Borrower's
request. Borrower understands that Lender may make loans based on other rates as
well. The interest rate change will not occur more often than each DAY. The
Index currently is 7.750% per annum. The interest rate to be applied to the
unpaid principal balance of this Agreement will be at a rate of 1.000 percentage
point over the Index, resulting in an initial rate of 8.750% per annum. NOTICE:
Under no circumstances will the interest rate on this Agreement be more than the
maximum rate allowed by applicable law.

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as

<PAGE>

otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued unpaid interest.
Rather, they will reduce the principal balance due.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this
Agreement or any agreement related to this Agreement, or in any other agreement
or loan Borrower has with Lender. (c) Any representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf is false or misleading
in any material respect either now or at the time made or furnished. (d)
Borrower becomes insolvent, a receiver is appointed for any part of Borrower's
property, Borrower makes an assignment for the benefit of creditors, or any
proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (e) Any creditor tries to take any of Borrower's
property on or in which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (f) Any guarantor dies or
any of the other events described in this default section occurs with respect to
any guarantor of this Agreement. (g) A material adverse change occurs in
Borrower's financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired. (h) Lender in good faith deems
itself insecure.

If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Agreement
within the preceding twelve (12) months, it may be cured (and no event of
default will have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (a) cures the default within fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be sufficient
to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Agreement and all accrued unpaid interest immediately due,
without notice, and then Borrower will pay that amount. Lender may hire or pay
someone else to help collect this Agreement if Borrower does not pay. Borrower
also will pay Lender that amount. This includes, subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal expenses whether or
not there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection services.
If not prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. This Agreement has been delivered to
Lender and accepted by Lender in the State of Minnesota. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction of the
courts of HENNEPIN County, the State of Minnesota. This Agreement shall be
governed by and construed in accordance with the laws of the State of Minnesota.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on this Agreement against any and all such accounts.

LINE OF CREDIT. This Agreement evidences a revolving line of credit. Advances
under this Agreement may be requested either orally or in writing by Borrower or
by an authorized person. Lender may, but need not, require that all oral
requests be confirmed in writing. All communications, instructions, or

<PAGE>

directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above. Borrower agrees to be liable for all sums either: (a)
advanced in accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid principal balance
owing on this Agreement at any time may be evidenced by endorsements on this
Agreement or by Lender's internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Agreement if: (a)
Borrower or any guarantor is in default under the terms of this Agreement or any
agreement that Borrower or any guarantor has with Lender, including any
agreement made in connection with the signing of this Agreement; (b) Borrower or
any guarantor ceases doing business or is insolvent; (c) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Agreement or any other loan with Lender; (d) Borrower has
applied funds provided pursuant to this Agreement for purposes other than those
authorized by Lender; or (e) Lender in good faith deems itself insecure under
this Agreement or any other agreement between Lender and Borrower.

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original obligation or obligations, including all agreements evidenced or
securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, than all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.

LOAN AGREEMENT. AN EXHIBIT, TITLED "LOAN AGREEMENT," IS ATTACHED TO THIS NOTE
AND BY THIS REFERENCE IS MADE A PART OF THIS NOTE JUST AS IF ALL THE PROVISIONS,
TERMS AND CONDITIONS OF THE LOAN AGREEMENT HAD BEEN FULLY SET FORTH IN THIS
NOTE.

SPECIAL PROVISION. NO ADVANCES SHALL BE MADE PRIOR TO THE RECEIPT OF THE 1998
AUDITED FINANCIAL STATEMENTS, WHICH SHALL HAVE NO MATERIAL ADVERSE CHANGE FROM
THE INTERNAL YEAR END FINANCIAL STATEMENTS PROVIDED.

MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Agreement without losing them. Borrower and any other
person who signs, guarantees or endorses this Agreement, to the extent allowed
by law, waive presentment, demand for payment, protest and notice of dishonor.
Upon any change in the terms of this Agreement, and unless otherwise expressly
stated in writing, no party who signs this Agreement, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan, or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party
with whom the modification is made.

SECTION DISCLOSURE.  This loan is made under Minnesota Statutes, Section 47.59.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.

<PAGE>


BORROWER AGREES TO THE TERMS OF THE AGREEMENT AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE AGREEMENT.


BORROWER:


CODA MUSIC TECHNOLOGY, INC.


By: _______________________________           By: _____________________________
       RON RAUP, PRESIDENT                         BARBARA REMLEY, CFO


<PAGE>

                     DISBURSEMENT REQUEST AND AUTHORIZATION

<TABLE>
<CAPTION>


----------------- -------------- -------------- ------------ --------- ------------ ------------ -------- ----------
  Principal        Loan Date       Maturity       Loan No      Call     Collateral    Account    Officer   Initials
 $500,000.00                      02-14-2000     90485255       01        3000        115342      GRA
--------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document 
                                   to any particular loan or item.
--------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                  <C>          <C>    
Borrower:       CODA MUSIC TECHNOLOGY, INC.                          Lender:      RIVERSIDE BANK
                6210 BURY DRIVE                                                   MINNESOTA CENTER OFFICE
                EDEN PRAIRIE, MN 55346                                            7760 FRANCE AVENUE SOUTH, SUITE 125
                                                                                  BLOOMINGTON, MN 55435

====================================================================================================================================

</TABLE>


LOAN TYPE. This is a Variable Rate (1.000% over PRIME RATE OF INTEREST AS
PUBLISHED EACH BUSINESS DAY IN THE MONEY RATES SECTION OF THE WALL STREET
JOURNAL, making an initial rate of 8.750%), Revolving Line of Credit Loan to a
Corporation for $500,000.00 due on February 14, 2000.

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

     [ ]   Maintenance of Borrower's Primary Residence.
     [ ]   Personal, Family or Household Purposes or Personal Investment.
     [ ]   Agricultural Purposes.
     [x]   Business Purposes.

SPECIFIC PURPOSE.  The specific purpose of this loan is:  
                   RENEW WORKING CAPITAL LINE OF CREDIT.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $500,000.00 as follows:

                  Undisbursed Funds:                       $500,000.00

                  Note Principal:                          $500,000.00

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

                  Prepaid Finance Charges Paid in Cash:         $5,000.00
                           $5,000.00 Loan Fees                 
                                                                ----------
                  Total Charges Paid in Cash:                   $5,000.00

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED FEBRUARY 14, 1999.

BORROWER:

CODA MUSIC TECHNOLOGY, INC.

By: ___________________________                 By: ___________________________
     RON RAUP, PRESIDENT                            BARBARA REMLEY, CFO

Variable Rate, Line of Credit LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver.
3.26(c) 1999 CFI ProServices, Inc. All rights reserved. [MN-120 90485255.LN
C1.OVL]


<PAGE>

                               COLLATERAL SCHEDULE

<TABLE>
<CAPTION>


----------------- --------------- -------------- ------------ --------- ------------- ------------ ---------- ----------
  Principal        Loan Date       Maturity       Loan No      Call     Collateral     Account      Officer    Initials
 $500,000.00       02-14-1999     02-14-2000     90485255       01         3000         115342        GRA
------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the availability of this document
                                  to any particular loan or item.
-----------------------------------------------------------------------------------------------------------------------

<S>             <C>                                                  <C>          <C>    
Borrower:       CODA MUSIC TECHNOLOGY, INC.                          Lender:      RIVERSIDE BANK
                6210 BURY DRIVE                                                   MINNESOTA CENTER OFFICE
                EDEN PRAIRIE, MN 55346                                            7760 FRANCE AVENUE SOUTH, SUITE 125
                                                                                  BLOOMINGTON, MN 55435

===================================================================================================================================

</TABLE>

<TABLE>
<CAPTION>

<S>     <C>      <C>                                                                  <C>    
ACCOUNTS RECEIVABLE
         1.       Accounts Receivable Book Value as of __________                     $
                                                                                           ----------------------------------------
         2.       Additions (please explain on reverse)                               $
                                                                                           ----------------------------------------
         3.       TOTAL ACCOUNTS RECEIVABLE                                           $
                                                                                           ----------------------------------------
DEDUCTIONS
         4.       Accounts 90 DAYS or more from the invoice date                      $
                                                                                           ----------------------------------------
         5.       Accounts with offsetting claims                                     $
                                                                                           ----------------------------------------
         6.       Other Deductions (PER LOAN AGREEMENT DATED 2/14/99)                 $
                                                                                           ----------------------------------------
         7.       TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS                                $
                                                                                           ----------------------------------------
         8.       Eligible Accounts (No. 3 - No. 7)                                   $
                                                                                           ----------------------------------------
         9.       LOAN VALUE OF ACCOUNTS (75.000% of No. 8)                           $
                                                                                           ----------------------------------------
INVENTORY
         10.      Inventory Book Value as of ___________                              $
                                                                                           ----------------------------------------
         11.      Additions (please explain on reverse)                               $
                                                                                           ----------------------------------------
         12.      TOTAL INVENTORY                                                     $
                                                                                           ----------------------------------------
DEDUCTIONS

<PAGE>

         13.      Obsolete Inventory                                                  $
                                                                                           ----------------------------------------
         14.      Inventory with offsetting claims                                    $
                                                                                           ----------------------------------------
         15.      Other Deductions (please explain on reverse)                        $
                                                                                           ----------------------------------------
         16.      TOTAL INVENTORY DEDUCTIONS                                          $
                                                                                           ----------------------------------------
         17.      Eligible Inventory (No. 12 - No. 16)                                $
                                                                                           ----------------------------------------
         18.      LOAN VALUE OF INVENTORY (25.000% of No. 17)                         $
                                                                                           ----------------------------------------
BALANCES
         19.      Maximum Loan Amount                                                 $                                $500,000.00
         20.      Present balance owing Lender                                        $
                                                                                           ----------------------------------------
         21.      Amount due
                  (larger of No. 20 minus No. 19 or No. 20 minus Nos. 9 + 18)         $
                                                                                           ----------------------------------------
         22.      Available unused loan value
                  (lesser of $500,000.00 minus No. 20 or Nos. 9 + 18 minus No. 20)    $
                                                                                           ----------------------------------------
AMOUNT OF REQUESTED LOAN ADVANCE                                                      $
                                                                                           ----------------------------------------

     ------------------------------------------------------------------------------------------------------------------------------
     COMMENTS: A maximum of 50% of the balance owing on this line of credit can
     be advanced against inventory. The accounts receivable borrowing base must
     cover at least 50% of the outstanding line of credit balance.
     ------------------------------------------------------------------------------------------------------------------------------

</TABLE>


<PAGE>


                               COLLATERAL SCHEDULE
                                   (Continued)

===============================================================================


         The undersigned represents and warrants that the foregoing is true,
complete and correct, and that the information reflected in this Collateral
Schedule complies with the representations and warranties set forth in the
Security Agreement and in the Loan Agreement between the undersigned and
RIVERSIDE BANK dated February 14, 1999.

CODA MUSIC TECHNOLOGY, INC.

By: ______________________________________
         Authorized Signer

LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.26(c) 1999 CFI ProServices, Inc.
All rights reserved. [MN-E401 LOANY2K.LN C15.OVL]


<PAGE>


                         CORPORATE RESOLUTION TO BORROW
<TABLE>
<CAPTION>


----------------- -------------- -------------- ------------ --------- ------------- ------------- --------- ----------
  Principal        Loan Date       Maturity       Loan No      Call     Collateral     Account     Officer    Initials
 $500,000.00                      02-14-2000     90485255       01         3000         115342       GRA
-----------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability
              of this document to any particular loan or item.
-----------------------------------------------------------------------------------------------------------------------
<S>              <C>                                              <C>           <C>    
Borrower:       CODA MUSIC TECHNOLOGY, INC.                       Lender:       RIVERSIDE BANK
                6210 BURY DRIVE                                                 MINNESOTA CENTER OFFICE
                EDEN PRAIRIE, MN 55346                                          7760 FRANCE AVENUE SOUTH, SUITE 125
                                                                                BLOOMINGTON, MN 55435

=======================================================================================================================

</TABLE>


I, the undersigned Secretary or Assistant Secretary of CODA MUSIC TECHNOLOGY,
INC. (the "Corporation"), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of the State of Minnesota as a
corporation for profit, with its principal office at 6210 BURY DRIVE, EDEN
PRAIRIE, MN 55346, and is duly authorized to transact business in the State of
Minnesota..

I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held on ______________, at which a quorum was present and voting, or
by other duly authorized corporate action in lieu of a meeting, the following
resolutions were adopted:

BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:

      NAMES                      POSITIONS                 ACTUAL SIGNATURES

      RON RAUP                   PRESIDENT                  X_________________

      BARBARA REMLEY             CFO                        X_________________ 

acting for and on behalf of the Corporation and as its act and deed be, and they
hereby are, authorized and empowered:

<PAGE>

         Borrow Money. To borrow from time to time from RIVERSIDE BANK
         ("Lender"), on such terms as may be agreed upon between the Corporation
         and Lender, such sum or sums of money as in their judgment should be
         borrowed, without limitation.

         Execute Notes. To execute and deliver to Lender the promissory note or
         notes, or other evidence of credit accommodations and/or revision
         agreement or other evidence of obligation of the Corporation, on
         Lender's forms, at such rates of interest and on such terms as may be
         agreed upon, evidencing the sums of money so borrowed or any
         indebtedness of the Corporation to Lender, and also to execute and
         deliver to Lender one or more renewals, extensions, modifications,
         refinancings, consolidations, or substitutions for one or more of the
         notes, any portion of the notes, or any other evidence of credit
         accommodations.

         Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
         otherwise encumber and deliver to Lender, as security for the payment
         of any loans or credit accommodations so obtained, any promissory notes
         so executed (including any amendments to or modifications, renewals,
         and extensions of such promissory notes), or any other or further
         indebtedness of the Corporation to Lender at any time owing, however
         the same may be evidenced, any property now or hereafter belonging to
         the Corporation or in which the Corporation now or hereafter may have
         an interest, including without limitation all real property and all
         personal property (tangible or intangible) of the Corporation. Such
         property may be mortgaged, pledged, transferred, endorsed,
         hypothecated, or encumbered at the time such loans are obtained or such
         indebtedness is incurred, or at any other time or times, and may be
         either in addition to or in lieu of any property theretofore mortgaged,
         pledged, transferred, endorsed, hypothecated, or encumbered.

<PAGE>

         Execute Security Documents. To execute and deliver to Lender the forms
         of mortgage, deed of trust, pledge agreement, hypothecation agreement,
         and other security agreements and financing statements which may be
         submitted by Lender, and which shall evidence the terms and conditions
         under and pursuant to which such liens and encumbrances, or any of
         them, are given; and also to execute and deliver to Lender any other
         written instruments, any chattel paper, or any other collateral, of any
         kind or nature, which they may in their discretion deem reasonably
         necessary or proper in connection with or pertaining to the giving of
         the liens and encumbrances.

         Negotiate Items. To draw, endorse, and discount with Lender all drafts,
         trade acceptances, promissory notes, or other evidences of indebtedness
         payable to or belonging to the Corporation in which the Corporation may
         have an interest, and either to receive cash for the same or to cause
         such proceeds to be credited to the account of the Corporation with
         Lender, or to cause such other disposition of the proceeds derived
         therefrom as they may deem advisable.

         Further Acts. In the case of lines of credit, to designate additional
         or alternate individuals as being authorized to request advances
         thereunder, and in all cases, to do and perform such other acts and
         things, to pay any and all fees and costs, and to execute and deliver
         such other documents and agreements as they may in their discretion
         deem reasonably necessary or proper in order to carry into effect the
         provisions of these Resolutions.

BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
Resolutions and performed prior to the passage of these Resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation, (d) change in the authorized signer(s), (e)
conversion of the Corporation to a new or different type of business entity, or
(f) change in any other aspect of the Corporation that directly or indirectly
relates to any agreements between the Corporation and Lender. No change in the
name of the Corporation will take effect until after Lender has been notified.

I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set opposite their respective names; that the foregoing
Resolutions now stand of record on the books of the Corporation; and that the
Resolutions are in full force and effect and have not been modified or revoked
in any manner whatsoever. The Corporation has no corporate seal, and therefore,
no seal is affixed to this certificate.

IN TESTIMONY WHEREOF, I have hereunto set my hand on February 14, 1999 and
attest that the signatures set opposite the names listed above are their genuine
signatures.

                                          CERTIFIED TO AND ATTESTED BY:

                                          X____________________________________

                                          X____________________________________

NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, it is advisable to have
this certificate signed by a second Officer or Director of the Corporation.