<PAGE>   1
                                                                    EXHIBIT 10.5

<TABLE>
<CAPTION>
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  PRINCIPAL     LOAN DATE      MATURITY    LOAN NO.     CALL    COLLATERAL    ACCOUNT     OFFICER   INITIALS
<S>             <C>            <C>        <C>           <C>     <C>          <C>          <C>       <C>
$8,000,000.00   08-06-1997                2071228480                         2071228480    69772
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</TABLE>
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.

BORROWER:  DAW TECHNOLOGIES, INC.      LENDER:   U.S. BANK
           2700 SOUTH 900 WEST                   CORPORATE BANKING
           SALT LAKE CITY  UT  84119             107 SOUTH MAIN STREET
                                                 SALT LAKE CITY, UT 84111


THIS LOAN AGREEMENT BETWEEN DAW TECHNOLOGIES, INC. ("BORROWER") AND U.S. 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 AUGUST 6, 1997, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate this Agreement in writing.

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 DAW TECHNOLOGIES, 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) $8,000,000.00; or (b) 75.000% of the
    aggregate amount of Eligible Accounts.

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

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

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

    COLLATERAL. The "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
    work "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 Borrower is or may become liable to
        the Account Debtor for goods sold or services rendered by the Account
        Debtor to Borrower.

        (e) Accounts which are subject to dispute, counterclaim, or setoff.
<PAGE>   2
        (f) Accounts with respect to which the goods have not been shipped or
        delivered, or the services have not been rendered, to the Account
        Debtor.

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

        (h) 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 of 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.

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

        (j) Accounts which have not been paid in full within 90 DAYS 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 90 DAYS from the invoice date is in excess of
        25.000% of the total amount outstanding on the Account.

    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.

    LENDER. The word "Lender" means U.S. 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.

    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, understanding
    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.
<PAGE>   3
    TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrower's total
    assets excluding all intangible assets (ie., goodwill, trademarks, patents,
    copyrights, organizational expenses, and similar intangible items, but
    including leaseholds and leasehold improvements) less total Debt.

    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 it option and for its sole benefit, shall have conducted
        an audit of Borrower's Accounts, 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, including without limitation the following loan fees:
        OPERATING LINE: .25% NON-USAGE FEE BASED ON THE UNUSED PORTION OF THE
        LINE COMMITMENT, ACCRUING MONTHLY AND PAID QUARTERLY IN ARREARS;
        INDIVIDUAL STANDBY LETTER OF CREDIT FEE: 1.5% PER ANNUM.

        (g) There shall not exist at the time of any Advance a condition which
        would constitute an Event of Default under this Agreement, and Borrower
        shall have delivered to Lender the compliance certificate called for in
        the paragraph below titled "Compliance Certificate."

    MAKING LOAN ADVANCES. Advances under the Line of Credit may be requested
    either orally or in writing subject to the limitations set forth below.
    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 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 and general intangibles. 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
<PAGE>   4
    keep and maintain such records as Lender may require, including without
    limitation information concerning Eligible Accounts and Account balances and
    agings. The following is an accurate and complete list of all locations at
    which Borrower keeps or maintains business records concerning Borrower's
    Accounts: 2700 SOUTH 900 WEST, SALT LAKE CITY, UT 84119.

    COLLATERAL SCHEDULES. Concurrently with the execution and delivery of this
    Agreement, Borrower shall execute and deliver to Lender a schedule of
    Accounts and Eligible Accounts in form and substance satisfactory to the
    Lender. Thereafter Borrower shall execute and deliver to Lender such
    supplemental schedules of Eligible Accounts and such other matters and
    information relating to Borrower's Accounts as Lender may request.
    Supplemental schedules shall be delivered according to the following
    schedule: MONTHLY.

    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.

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 in the "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 matter. (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 occurring
    prior to Borrower's ownership or interest in the properties, whether or not
    the same was or should have been known to Borrower. 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.
<PAGE>   5
    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.

    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 2700 SOUTH 900 WEST, SALT LAKE CITY, UT 84119.
    Unless Borrower has designated otherwise in writing this location is also
    the office or offices where Borrower keeps its records concerning the
    Collateral.

    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.

    ADDITIONAL INFORMATION. Furnish such additional information and statements,
    lists of assets and liabilities, agings of receivable 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.

    FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and
    ratios:

        TANGIBLE NET WORTH. Maintain a minimum Tangible Net Worth of not less
        than $20,000,000.00

        NET WORTH RATIO. Maintain a ratio of Total Liabilities to Tangible Net
        Worth of less than 1.25 TO 1.00.

        CURRENT RATIO. Maintain a ratio of Current Assets to Current Liabilities
        in excess of 1.30 TO 1.00.

        CASH FLOW REQUIREMENTS. Maintain Cash Flow at not less than the
        following level: BORROWER TO MAINTAIN A DEBT SERVICE COVERAGE OF 1.25X.
        DEBT SERVICE COVERAGE IS DEFINED AS: NET PROFIT AFTER TAX PLUS
        DEPRECIATION EXPENSE PLUS INTEREST EXPENSE MINUS STOCK REPURCHASES
        DIVIDED BY PRIOR PERIOD CURRENT PORTION LONG TERM DEBT PLUS INTEREST
        EXPENSE.

    The following provisions shall apply for purposes of determining compliance
    with the foregoing financial covenants and ratios: CAPITAL EXPENDITURE,
    CURRENT RATIO, NET WORTH RATIO AND TANGIBLE NET WORTH TO BE MEASURED
    QUARTERLY BASED ON BORROWER'S QUARTER END; DEBT SERVICE COVERAGE TO BE
    MEASURED ANNUALLY BASED ON BORROWER'S FISCAL YEAR END. 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 canceled 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 an 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
<PAGE>   6
    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.

    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: OPERATING LINE: .25% NON-USAGE FEE BASED ON THE
    UNUSED PORTION OF THE LINE COMMITMENT, ACCRUING MONTHLY AND PAID QUARTERLY
    IN ARREARS; INDIVIDUAL STANDBY LETTER OF CREDIT FEE: 1.5% PER ANNUM.

    LOAN PROCEEDS. Use all Loan proceeds solely for the following specific
    purposes: LINE OF CREDIT FOR OPERATING PURPOSES AND TO SUPPORT THE ISSUANCE
    OF STANDBY LETTER OF CREDIT.

    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 Borrower's 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.

    COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide Lender
    at least annually and at the time of each disbursement of Loan proceeds with
    a certificate executed by Borrower's chief financial officer, or other
    officer or person acceptable to Lender, certifying that the representations
    and warranties set forth in this Agreement are true and correct as of the
    date of the certificate and further certifying that, as of the date of the
    certificate, no Event of Default exists under this Agreement.

    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 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:

    CAPITAL EXPENDITURES. Make or contract to make capital expenditures,
    including leasehold improvements, in any fiscal year in excess of
    $2,500,000.00 or incur liability for rentals of property (including both
    real and personal property) in an amount which, together with capital
    expenditures, shall in any fiscal year exceed such sum.

    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
<PAGE>   7
    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.

ACCESS LAWS. Without limiting the generality of any provision of this agreement
requiring Borrower to comply with applicable laws, rules and regulations,
Borrower agrees that it will at all times comply with applicable laws relating
to disabled access including, but not limited to, all applicable titles of the
Americans with Disabilities Act of 1990.

CONTROLS AND MONITORING.

1.  BORROWER TO PROVIDE LENDER WITH ANNUAL CPA AUDITED FINANCIAL STATEMENT ON
DAW TECHNOLOGIES, INC.

2.  BORROWER TO PROVIDE LENDER WITH QUARTERLY FORM 10-Q STATEMENTS.

3.  NO DIVIDENDS WITHOUT PRIOR WRITTEN CONSENT OF THE BANK.

4.  BORROWER TO PROVIDE LENDER WITH QUARTERLY COMPLIANCE CERTIFICATE.

5.  DOMESTIC LETTERS OF CREDIT UNDER THE LETTER OF CREDIT FACILITY ARE DEDUCTED
FROM THE BORROWING BASE. ADVANCES TO BE 50% AGAINST RETENTION AND UNDERBILLINGS
LESS OVERBILLINGS WITH A $2,000,000.00 CAP. INVENTORY IS TAKEN AS COLLATERAL BUT
IS NOT ADVANCED AGAINST.

6.  BORROWER TO PROVIDE LENDER WITH MONTHLY BORROWING BASE CERTIFICATE.

RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory 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.

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 Guarantor to comply with 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.

    DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
    under any loan, extension of credit, security agreement, purchase or sales
    agreement, or any other agreement, in favor of any other creditor or person
    that may materially affect any of Borrower's property or Borrower's or any
    Grantor's ability to repay the Loans or perform their respective obligations
    under this Agreement or any of the Related Documents.

    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 credit 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.

    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.

    CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%) or
    more of the common stock of Borrower.
<PAGE>   8
    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.

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

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 an 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 UTAH. IF THERE IS A LAWSUIT, BORROWER AGREES UPON
    LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF SALT LAKE
    COUNTY, THE STATE OF UTAH. SUBJECT TO THE PROVISIONS ON ARBITRATION, THIS
    AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
    THE STATE OF UTAH.

    ARBITRATION. LENDER AND BORROWER AGREE THAT ALL DISPUTES, CLAIMS AND
    CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN NATURE,
    ARISING FROM THIS AGREEMENT OR OTHERWISE, INCLUDING WITHOUT LIMITATION
    CONTRACT AND TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO THE RULES OF THE
    AMERICAN ARBITRATION ASSOCIATION, UPON REQUEST OF EITHER PARTY. No act to
    take or dispose of any Collateral shall constitute a waiver of this
    arbitration agreement or be prohibited by this arbitration agreement. This
    includes, without limitation, obtaining injunctive relief or a temporary
    restraining order; invoking a power of sale under any deed of trust or
    mortgage; obtaining a writ of attachment or imposition of a receiver; or
    exercising any rights relating to personal property, including taking or
    disposing of such property with or without judicial process pursuant to
    Article 9 of the Uniform Commercial Code. Any disputes, claims, or
    controversies concerning the lawfulness or reasonableness of any act, or
    exercise of any right, concerning any Collateral, including any claim to
    rescind, reform, or otherwise modify any agreement relating to the
    Collateral, shall also be arbitrated, provided however that no arbitrator
    shall have the right or the power to enjoin or restrain any act of any
    party. Judgment upon any award rendered by any arbitrator may be entered in
    any court having jurisdiction. Nothing in this Agreement shall preclude any
    party from seeking equitable relief from a court of competent jurisdiction.
    The statute of limitations, estoppel, waiver, laches, and similar doctrines
    which would otherwise be applicable in an action brought by a party shall be
    applicable in any arbitration proceeding, and the commencement of an
    arbitration proceeding shall be deemed the commencement of an action for
    these purposes. The Federal Arbitration Act shall apply to the construction,
    interpretation, and enforcement of this arbitration provision.

    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, of 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.

    COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
    expenses, including without limitation reasonable attorney's 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 reasonable attorneys'
    fees and Lender's legal expenses, whether or not there is a lawsuit,
    including reasonable 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, 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 address(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.
<PAGE>   9
    SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of any
    provision 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 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.

FINAL AGREEMENT. Borrower understands that this Agreement and the related loan
documents are the final expression of the agreement between Lender and Borrower
and may not be contradicted by evidence of any alleged oral agreement.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN AGREEMENT, AND
BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF AUGUST 6, 1997.

BORROWER:
DAW TECHNOLOGIES, INC.


BY:__________________________________________
   DAVID R. GROW, CFO/EVP/SECRETARY


BY:__________________________________________
   RONALD W. DAW, PRESIDENT


BY:__________________________________________
   WILLIAM SAWAYA, SR. VICE PRESIDENT OF MANUFACTURING


LENDER:
U.S. BANK


BY:__________________________________________
   AUTHORIZED OFFICER
<PAGE>   10
                                                                [U.S. BANK LOGO]

                            CONTINUING AGREEMENT FOR
                          COMMERCIAL LETTERS OF CREDIT

DATED AS OF:

APPLICANT:                   Daw Technologies, Inc.





CORRESPONDENT BANK:
(if applicable)


    From time to time, any person signing this Agreement as Applicant or
Correspondent Bank (either or both, "Applicant") may request U.S. Bank to issue
or to request one of its affiliates to issue one or more irrevocable commercial
letters of credit (each, a "Credit") substantially in accordance with the terms
of any application (each, an "Application") submitted to U.S. Bank by Applicant.

          In consideration of the issuance by U.S. Bank or an affiliate of U.S.
Bank (each such affiliated issuer, an "Other Issuer") of one or more Credits,
each Applicant agrees that the following terms shall apply to each Application
and each Credit issued by U.S. Bank or any Other Issuer (either or both,
"Bank").

1.  OBLIGATIONS

    a.  Applicant promises to pay Bank on demand at U.S. Bank's International
        Banking Office,Salt Lake City, Utah:

       i.   The amount of each draft or other demand for payment ("draft") drawn
            under the Credit, provided, however, (a) if the draft is drawn in
            currency other than United States currency, Applicant shall pay an
            equivalent amount in United States currency, at Bank's then current
            selling rate for telecommunications transfer of such other currency
            to the place the draft is payable, or at Bank's option, in any other
            currency, place, form and manner acceptable to Bank, and (b) if the
            draft is a time draft, Applicant shall make such payment without
            demand sufficiently in advance of its maturity date to enable Bank
            to arrange for cover to reach the place of payment no later than one
            business day prior to its maturity.

       ii.  In advance, all commissions at the rate fixed by Bank, and all
            expenses Bank may pay or incur in connection with the Credit.

       iii. All taxes, levies, imposts, duties, charges, fees, deductions or
            withholdings of any nature whatsoever paid or incurred by Bank in
            connection with this Agreement, the Credit or any related
            transactions and any liability with respect thereto (including but
            not limited to interest, penalties and expenses).

       iv.  Interest on all amounts due under this Agreement from the applicable
            due date until paid at a per annum rate equal to the sum of U.S.
            Bank's prime rate, as that rate may vary from time to time, plus 5%.
            Interest shall be calculated on the basis of a 360-day year and the
            actual number of days elapsed. U.S. Bank's prime rate is the rate
            which U.S. Bank from time to time establishes as its prime rate and
            is not, for example, the lowest rate of interest which U.S. Bank
            collects from any borrower or class of borrowers.

    b.  Without limiting Applicant's obligations to any Other Issuer, but
        without duplication, Applicant promises to pay to U.S. Bank on demand,
        at U.S. Bank's International Banking Office in Salt Lake City, Utah, an
        amount equal to all amounts which U.S. Bank pays or becomes obligated to
        pay to any Other Issuer with respect to the Credit, whether as a
        participant in the Credit or otherwise.

    c.  Notwithstanding any other provision of this Agreement, Applicant's
        obligation to make any payment hereunder to any Other Issuer shall, to
        the extent of such payment, be satisfied by payment to U.S. Bank as set
        forth in this Agreement.

    d.  Applicant hereby authorizes U.S. Bank to automatically deduct from its
        account with U.S. Bank specified on attached Schedule 1, all amounts
        which become due to Bank under this Agreement. If there are insufficient
        funds in the account to pay the automatic deduction in full, Bank may
        allow the account to become overdrawn, or Bank may reverse the automatic
        deduction. Applicant will pay all fees on the account which result from
        the automatic deductions, including any overdraft/NSF charges. If for
        any reason U.S. Bank does not charge the


                                  Page 1 of 6
<PAGE>   11
        account for any amount due, or if an automatic deduction is reversed,
        the amount due is still owing to Bank as set forth herein. If the
        account is a Money Market Account, the number of withdrawals from that
        account is limited as set out in the agreement. U.S. Bank may cancel the
        automatic deduction at any time in its discretion.

2.  CERTAIN WARRANTIES Applicant warrants that the execution, delivery and
    performance of this Agreement are within its authority and are not in
    contravention of law, of any terms of any agreement, instrument, order or
    judgment to which Applicant is a party or by which it or its property may be
    bound or of any provision of its charter documents or bylaws, and that it
    has obtained all necessary approvals and consents therefor.

3.  THE CREDIT

    a.  U.S. Bank may either issue the Credit or request one of its affiliates
        to issue the Credit. Bank may sell, assign or participate all or any
        part of its rights and obligations under this Agreement, the Application
        and the Credit. Without limiting the foregoing, any Other Issuer may
        sell a participation in all or any part of its rights and obligations
        under this Agreement and the Credit to U.S. Bank.

    b.  Bank hereby is authorized to set forth in the Credit the terms appearing
        on the Application, with such modifications as Bank in its discretion
        may determine are appropriate or necessary and are not materially
        inconsistent with such terms. Any such determination shall be binding on
        Applicant.

    c.  All communications relating to the Credit will be sent at Applicant's
        risk. Bank shall have no responsibility for any inaccuracy of
        translation, or any interruption, error or delay in transmission or
        delivery by mail, telecommunication or any other method. Bank shall not
        be liable for any error, neglect or default of any of Bank's
        correspondents.

    d.  Neither Bank nor its correspondents shall be in any way responsible for
        the performance of any beneficiary's obligations to Applicant or for the
        form, sufficiency, accuracy, genuineness, authority of person signing,
        falsification or legal effect, of any document required by the Credit if
        such document appears in order on its face. Whether the documents
        conform to the terms of the Credit and whether any demand is timely and
        in proper form shall be determined by Bank in its sole discretion, which
        determination shall be final and binding on Applicant. Without limiting
        the foregoing, if a unit price is not required on documents accompanying
        the draft(s), Bank may honor draft(s) in any amount(s) not to exceed the
        amount then available under the Credit.

    e.  Notwithstanding any other term of this Agreement, if Bank at any
        Applicant's request agrees to indemnify any shipper, including but not
        limited to any vessel, its owner, operators and agents from any
        liability, loss or expense incurred in connection with release of any
        goods covered by the Credit without surrender of the applicable bill of
        lading or other shipping documents, Applicant hereby (i) authorizes Bank
        without limitation or condition to either or both pay or accept, as the
        case may be, any and all drafts presented in connection with such goods;
        and (ii) agrees to make payment to Bank as specified in Section 1, even
        though any required documents may be omitted, incorrect, defective or
        otherwise not in conformity with the terms of the Credit.

    f.  Subject to Section 7b, Bank may at Applicant's request increase the
        amount of the Credit, extend the time for making and honoring of demands
        under the Credit and otherwise modify the terms and conditions governing
        the Credit. As so modified, all provisions of the Credit, and all action
        taken by Bank or Bank's correspondents in connection therewith, shall be
        binding upon Applicant.

    g.  Applicant will promptly examine the Credit, any amendments thereto and
        all information, documents and instruments delivered to Applicant from
        time to time by Bank and shall notify U.S. Bank within five U.S. Bank
        banking days after receipt if Applicant claims that Bank has failed to
        comply with Applicant's instructions or Bank's obligations with respect
        to the Credit, has wrongfully honored or dishonored any presentation
        under the Credit or claims any other irregularity. If Applicant does not
        so notify U.S. Bank within such time period, Applicant shall be
        conclusively deemed to have waived and shall be precluded from asserting
        such claim(s).

    h.  Bank may receive, accept or pay as complying with the terms of the
        Credit, any drafts or other documents, otherwise in order, which appear
        on their face to be signed by or issued to the administrator, executor,
        successor or trustee in bankruptcy of or the receiver for any of the
        property of, or any other person or entity acting as the representative
        or in the place of, the party in whose name the Credit provides that any
        drafts or other documents should be drawn or issued.

4.  SECURITY AND INSURANCE

    a.  As security for payment of any and all of Applicant's obligations to
        U.S. Bank and any Other Issuer now or hereafter existing under or in
        connection with this Agreement, the Credit, or any other indebtedness of
        Applicant to U.S. Bank and any Other Issuer, Applicant hereby grants to
        U.S. Bank and any Other Issuer a


                                  Page 2 of 6
<PAGE>   12
        security interest in any and all bills of lading, other documents of
        title, policies or certificates of insurance, chattel paper and general
        intangibles accompanying or relative to the Credit or any drafts drawn
        thereunder, and any and all inventory, goods and other property shipped
        under, in connection with, or relative to the Credit or any drafts drawn
        thereunder, together with any and all proceeds and products thereof (the
        "Collateral"). At any time and from time to time, on demand of Bank,
        Applicant will assign and deliver to Bank as security for such
        obligations additional collateral of a type and value satisfactory to
        Bank or make such cash payments as Bank may require. At Bank's request,
        Applicant will execute any financing statements and other documents or
        instruments as Bank may require to perfect the security interests
        granted or contemplated hereunder and will pay the cost of any filings
        in connection therewith.

    b.  Applicant shall keep any property described in the Credit covered by
        insurance satisfactory to Bank, and authorizes Bank to collect and apply
        the proceeds of any such insurance to any of Applicant's obligations.

5.  DEFAULT AND REMEDIES

    a.  Time is of the essence of this Agreement. The occurrence of any of the
        following shall be an Event of Default hereunder:

       i.    Default in payment or performance of any of Applicant's obligations
             hereunder or under any promissory note or other agreement between
             Bank and Applicant;

       ii.   Default under any security documents securing Applicant's
             obligations hereunder, whether executed by Applicant or any other
             person;

       iii.  Levy or proceeding against any property of Applicant or any
             guarantor of Applicant's obligations hereunder ("Guarantor");

       iv.   Death, dissolution, termination of existence, insolvency or
             business failure of, appointment of a receiver for any part of the
             property of, assignment for the benefit of creditors by,
             commencement of any proceeding under any bankruptcy or insolvency
             laws by or against, or entry of any judgment against, Applicant or
             any Guarantor;

       v.    Any warranty, representation or statement made or furnished to Bank
             by Applicant or any Guarantor proves to have been false in any
             material respect when made or furnished;

       vi.   Any event which gives the holder of any debt obligation of
             Applicant or any Guarantor the right to accelerate its maturity,
             whether or not such right is exercised;

       vii.  Any guaranty of Applicant's obligations hereunder ceases to be, or
             is asserted by any person not to be, in full force and effect; or

       viii. Bank, for any reason in good faith, deems itself insecure.

    b.  Upon the occurrence of any Event of Default and at any time thereafter,
        Bank at its option and in addition to all other rights of Bank under
        this Agreement, any related agreement and applicable law, may (i)
        without notice or demand, declare the amount for which the Credit was
        issued and any other amounts owing hereunder immediately due and
        payable; and (ii) exercise any and all rights and remedies of a secured
        party under the Uniform Commercial Code and other applicable law. Any
        required notice of sale of Collateral shall be deemed reasonable if sent
        at least 10 days prior to the date of any public sale or the date after
        which any private sale may be made.

6.  CHANGES TO LAWS AND REGULATIONS If any adoption of or change in law or
    regulation, or in the interpretation or administration thereof by any
    official authority shall impose on Bank any tax, charge, fee, deduction or
    withholding of any kind whatsoever, or shall impose or modify any reserve
    requirements, standards regarding capital adequacy or any other conditions
    affecting this Agreement or the Credit, and the result of any of the
    foregoing shall be to increase the cost to Bank of issuing and maintaining
    the Credit, reduce the amount of any sum receivable by Bank hereunder or
    reduce the rate of return on Bank's capital, then Applicant shall pay to
    Bank upon demand such additional amount or amount(s) as Bank may specify to
    be necessary to compensate Bank for such additional costs incurred or
    reduction suffered.

7.  GENERAL

    a.  Each Application shall be subject to all terms and conditions of this
        Agreement.

    b.  Notwithstanding any other term hereof, (i) the Credit can be revoked or
        amended only with the consent of the beneficiary of the Credit, all
        Applicants (including any Correspondent Bank signing this Agreement),
        Bank and any confirming bank and (ii) instructions concerning
        discrepancies must be given by all such Applicants.


                                  Page 3 of 6
<PAGE>   13
    c.  If the Account Party on the Application is not an Applicant hereunder,
        the Account Party shall have no rights against Bank; and Applicant shall
        deliver to U.S. Bank an agreement satisfactory to Bank executed by the
        Account Party, providing that Bank without notice to or consent of the
        Account Party, may deal with Applicant as if Applicant were the named
        Account Party, and waiving any and all present and future claims and
        defenses against Bank.

    d.  Applicant shall give U.S. Bank prior written notice of any change of
        name, address or place of business. Any notice of any nature by
        Applicant to Bank must be given at U.S. Bank's office where the
        Application was submitted.

    e.  The singular includes the plural. If Applicant consists of more than one
        person, the obligations of Applicant hereunder are joint and several and
        are binding upon any marital community of which any Applicant is a
        member. This Agreement shall be binding on Applicant's heirs, successors
        and assigns.

    f.  Notwithstanding the title of any Credit instrument, the rights and
        obligations of Bank and Applicant with respect to the Credit shall be as
        set forth herein.

    g.  Except as otherwise provided herein or on the Application, the Uniform
        Customs and Practice for Documentary Credits of the International
        Chamber of Commerce ("UCP") as in effect on the date of issuance of the
        Credit are fully incorporated herein and shall apply to the Credit. This
        Agreement and the Credit shall be governed by the internal laws of the
        State of Utah, United States of America (the "Governing Laws"), except
        to the extent such laws are inconsistent with the UCP. If the Credit
        provides that it is governed by laws, regulations or rules other than
        the Governing Laws (the "Specified Laws"), Applicant agrees not to
        assert any provisions of the Specified Laws as a defense to any of its
        obligations hereunder.

    h.  Applicant hereby indemnifies and agrees to hold harmless the Bank, its
        officers, directors, agents, successors and assigns, from and against
        any and all liability, claims, demands, losses and expenses (including
        without limitation legal costs and attorney fees incurred in any
        appellate proceeding, proceeding under the bankruptcy code or
        receivership), arising from or in connection with this Agreement, the
        Credit or any related transaction, unless arising from Bank's gross
        negligence or willful misconduct.

    i.  Applicant hereby authorizes Bank to issue Credits and amendments thereto
        based upon, and to otherwise rely on and act in accordance with, any
        oral or written communication, including but not limited to any
        electronic communication and any facsimile transmission, reasonably
        believed by Bank to have been or which purportedly has been, given by
        one of the authorized persons specified on Schedule 1, even if such
        communication proves not to have been given by an authorized person.

    j.  Bank's waiver of any right on any occasion or occasions shall not be
        construed as a bar or waiver of any other right or of such right on any
        other occasion. Applicant hereby waives and agrees not to assert any
        defense under any applicable statute of limitations, to the fullest
        extent permitted by law. In addition to all other rights which Bank may
        have, Applicant hereby authorizes Bank to set off any and all deposits
        or other moneys due from Bank at any of its offices against any and all
        of Applicant's obligations hereunder, whether or not Bank shall have
        made any demand under this Agreement.

    k.  Without notice to any Applicant and without affecting Bank's rights or
        Applicant's obligations, Bank may deal in any manner with any person who
        at any time is liable for, or provides any collateral for, any
        obligations of Applicant to Bank. Without limiting the foregoing, Bank
        may impair, release (with or without substitution of new collateral) and
        fail to perfect a security interest in, any collateral provided by any
        person; and sue, fail to sue, agree not to sue, release, and settle or
        compromise with, any person.

    l.  Whether or not litigation or arbitration is commenced, Applicant
        promises to pay all attorney fees and other costs and expenses incurred
        by Bank in collecting overdue amounts or construing or enforcing any
        provision of this Agreement or the Credit, including but not limited to
        reasonable attorney fees at trial, in any arbitration, appellate
        proceeding, proceeding under the Bankruptcy code, or receivership, and
        post-judgment attorney fees incurred in enforcing any judgment.

    m.  Bank's issuance of the Credit shall constitute its Agreement to the
        terms of this Agreement.

    n.  This Agreement is a continuing agreement and shall remain in effect
        until terminated, amended or replaced. This Agreement may be terminated
        by Applicant or U.S. Bank by giving notice of termination to the other
        and may be amended or replaced by a written agreement signed by
        Applicant and accepted by U.S. Bank; provided, however that no such
        termination, amendment or replacement shall alter or affect the
        undertaking of Applicant or Bank with respect to any Credit issued prior
        to such termination, amendment or replacement.


                                   Page 4 of 6
<PAGE>   14
    o.  Nothing in this Agreement shall be construed as imposing any obligation
        on Bank to issue any Credit. Each Credit shall be issued by Bank in its
        sole discretion and at its sole option.

    p.  Any Correspondent Bank signing this Agreement agrees that each
        Application and Credit and this Agreement are subject to all terms and
        conditions of the most recent Correspondent Bank Letter of Credit
        Agreement between U.S. Bank and Correspondent Bank.

    q.  Bank is authorized to record electronically or otherwise any telephone
        and other oral communications between Bank and Applicant.

    r.  All terms and conditions on the attached Schedule 1, and any replacement
        Schedule 1 are hereby incorporated herein. Applicant may change the
        provisions of Schedule 1 by executing and delivering a new Schedule 1 to
        Bank.

    s.  From time to time, Applicant may submit Applications, applications for
        amendments to Credits or other communications (each, a "Faxed Document")
        to Bank by facsimile transmission. With respect to each such facsimile
        transmission Applicant agrees: (i) each Faxed Document shall be deemed
        to be an original document and shall be effective for all purposes as if
        it were an original; (ii) Applicant shall retain the original of any
        Faxed Document and shall deliver it to Bank upon request; (iii) if
        Applicant sends Bank a manually signed confirmation of a Faxed Document
        Bank shall have no duty to compare it to the previously received Faxed
        Document nor shall it have any liability nor duty to act should the
        contents of the written confirmation differ therefrom. Any manually
        signed confirmation of a Faxed Document must be conspicuously marked
        "Previously transmitted by facsimile." Bank will not be liable for
        issuance of duplicate letters of credit or amendments thereto that
        result from Bank's receipt of confirmations not so marked; (iv) Bank
        cannot effectively determine whether a particular facsimile request is
        valid. Therefore Applicant shall have sole responsibility for the
        security of using facsimile transmissions and for any authorized or
        unauthorized Faxed Document received by Bank, purportedly on behalf of
        Applicant.

8.  ARBITRATION

    a.  Any Bank or Applicant may require that all disputes, claims,
        counterclaims, and defenses, including those based on or arising from
        any alleged tort ("Claims") relating in any way to this Agreement, the
        Credit or any transaction of which this Agreement or the Credit is a
        part (the "Loan"), be settled by binding arbitration in accordance with
        the Commercial Arbitration Rules of the American Arbitration Association
        and Title 9 of the U.S. Code. All Claims will be subject to the statutes
        of limitation applicable if they were litigated. This provision is void
        if the Loan, at the time of the proposed submission to arbitration, is
        secured by real property located outside of Oregon or Washington, or if
        the effect of the arbitration procedure (as opposed to any Claims of
        Applicant) would be to materially impair the Bank's ability to realize
        on any collateral securing the Loan.

    b.  If arbitration occurs and each party's Claim is less than $100,000, one
        neutral arbitrator will decide all issues; if any party's Claim is
        $100,000 or more, three neutral arbitrators will decide all issues. All
        Arbitrators will be active Utah State Bar members in good standing. All
        arbitration hearings will be held in Salt Lake City, Utah. In addition
        to all other powers, the arbitrator(s) shall have the exclusive right to
        determine all issues of arbitrability. Judgment on any arbitration award
        may be entered in any court with jurisdiction.

    c.  If any party institutes any judicial proceeding relating to the Loan,
        such action shall not be a waiver of the right to submit any Claim to
        arbitration. In addition each has the right before, during, and after
        any arbitration to exercise any number of the following remedies, in any
        order or concurrently: (i) setoff; (ii) self-help repossession; (iii)
        judicial or non-judicial foreclosure against real or personal property
        collateral; and (iv) provisional remedies, including injunction,
        appointment of receiver, attachment, claim and delivery and replevin.

9.  BY UTAH STATUTE (UCA 25-5-4) THE FOLLOWING DISCLOSURE IS REQUIRED: THIS
    AGREEMENT IS A FINAL EXPRESSION OF THE AGREEMENT BETWEEN BANK AND APPLICANT
    AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED ORAL AGREEMENT.

APPLICANT ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS AGREEMENT

APPLICANT:                             CORRESPONDENT BANK:  (IF APPLICABLE)
DAW TECHNOLOGIES, INC.

__________________________________     _____________________________________


By:_______________________________     By:__________________________________



                                   Page 5 of 6
<PAGE>   15
Title:____________________________     Title:_______________________________



FOR BANK USE - SIGNATURE VERIFIED AND AUTHORITY TO SIGN CONFIRMED
--------------------------------------------------------------------------------
                                                          U.S. BANK
--------------------------------------------------------------------------------
   AUTHORIZED SIGNATURE       OFFICER NAME AND NUMBER      COMPANY   COST CENTER
--------------------------------------------------------------------------------


                                   Page 6 of 6
<PAGE>   16
                                                                          [LOGO]

                      CONTINUING AGREEMENT FOR IRREVOCABLE
                            STANDBY LETTERS OF CREDIT

DATED AS OF:

APPLICANT:                   Daw Technologies, Inc.





CORRESPONDENT BANK:
(if applicable)



From time to time, any person signing this Agreement as Applicant or
Correspondent Bank (either or both, "Applicant") may request U.S. Bank to issue
or to request one of its affiliates to issue one or more irrevocable standby
letters of credit (each, a "Credit") substantially in accordance with the terms
of any application (each, an "Application") submitted to U. S. Bank by
Applicant.

    In consideration of the issuance by U. S. Bank or an affiliate of U. S. Bank
(each such affiliated issuer, an "Other Issuer") of one or more Credits, each
Applicant agrees that the following terms shall apply to each Application and
each Credit issued by U. S. Bank or any Other Issuer (either or both, "Bank").

1.  OBLIGATIONS

    a.  Applicant promises to pay Bank on demand at U. S. Bank's International
        Banking Office,Salt Lake City, Utah:

       i.    The amount of each draft or other request for payment ("draft")
             drawn under the Credit. For amounts payable in United States
             currency, Applicant agrees to reimburse Bank in United States
             currency. For amounts payable in other currency, Applicant agrees
             to reimburse Bank an equivalent amount in United States currency at
             Bank's then current selling rate for telecommunications transfer of
             such other currency to the place the draft is payable, or at Bank's
             option, in any other currency, place, form and manner acceptable to
             Bank. If Bank so demands, Applicant promises to pay Bank in
             advance, in United States currency, all sums necessary to put Bank
             in funds to pay all such drafts whether payable in United States
             currency or otherwise.

       ii.   Bank's fees, at the per annum rate fixed by Bank, for the period
             from the date of issuance to the expiry date of the Credit. Such
             fees shall be payable from time to time, in advance, at such
             intervals as Bank may require and shall be nonrefundable, whether
             or not the Credit is drawn upon, reduced in time or amount or
             otherwise modified.

       iii.  The entire principal amount which has not been drawn under the
             Credit, to be held by Bank as collateral for any draws. Any such
             amount which is not applied to reimbursement of draws shall be
             refunded to Applicant within thirty (30) days after the expiry date
             of the Credit, with interest at U. S. Bank's lowest savings account
             rate then in effect.

       iv.   All taxes, levies, imposts, duties, charges, fees, deductions or
             withholdings of any nature whatsoever paid or incurred by Bank in
             connection with this Agreement, the Credit or any related
             transactions, and any liability with respect thereto (including but
             not limited to interest, penalties and expenses).

       v.    Interest on all amounts due under this Agreement from the
             applicable due date until paid at a per annum rate equal to the sum
             of U. S. Bank's prime rate, as that rate may vary from time to
             time, plus 5%. Interest shall be calculated on the basis of a
             360-day year and the actual number of days elapsed. U. S. Bank's
             prime rate is the rate which U. S. Bank from time to time
             establishes as its prime rate and is not, for example, the lowest
             rate of interest which U. S. Bank collects from any borrower or
             class of borrowers.

    b.  Without limiting Applicant's obligations to any Other Issuer, but
        without duplication, Applicant promises to pay to U.S. Bank on demand,
        at U. S. Bank's International Banking Office in Salt Lake City, Utah, an


                                   Page 1 of 6
<PAGE>   17
        amount equal to all amounts which U. S. Bank pays or becomes obligated
        to pay to any Other Issuer with respect to the Credit, whether as a
        participant in the Credit or otherwise.

    c.  Notwithstanding any other provision of this Agreement, Applicant's
        obligation to make any payment hereunder to any Other Issuer shall, to
        the extent of such payment, be satisfied by payment to U. S. Bank as set
        forth in this Agreement.

    d.  Applicant hereby authorizes U. S. Bank to automatically deduct from its
        account with U. S. Bank specified on attached Schedule 1, all amounts
        which become due to Bank under this Agreement. If there are insufficient
        funds in the account to pay the automatic deduction in full, Bank may
        allow the account to become overdrawn, or Bank may reverse the automatic
        deduction. Applicant will pay all fees on the account which result from
        the automatic deductions, including any overdraft/NSF charges. If for
        any reason U. S. Bank does not charge the account for any amount due, or
        if an automatic deduction is reversed, the amount due is still owing to
        Bank as set forth herein. If the account is a Money Market Account, the
        number of withdrawals from that account is limited as set out in the
        agreement. U. S. Bank may cancel the automatic deduction at any time in
        its discretion.

2.  CERTAIN WARRANTIES Applicant warrants that the execution, delivery and
    performance of this Agreement are within its authority and are not in
    contravention of law, of any terms of any agreement, instrument, order or
    judgment to which Applicant is a party or by which it or its property may be
    bound or of any provision of its charter documents or bylaws, and that it
    has obtained all necessary approvals and consents therefor.

3.  THE CREDIT

    a.  U. S. Bank may either issue the Credit or request one of its affiliates
        to issue the Credit. Bank may sell, assign or participate all or any
        part of its rights and obligations under this Agreement, the Application
        and the Credit. Without limiting the foregoing, any Other Issuer may
        sell a participation in all or any part of its rights and obligations
        under this Agreement and the Credit to U. S. Bank.

    b.  Bank hereby is authorized to set forth in the Credit the terms appearing
        on the Application, with such modifications as Bank in its discretion
        may determine are appropriate or necessary and are not materially
        inconsistent with such terms. Any such determination shall be binding on
        Applicant.

    c.  All communications relating to the Credit will be sent at Applicant's
        risk. Bank shall have no responsibility for any inaccuracy of
        translation, or any error or delay in transmission or delivery by mail,
        telecommunication or any other method. Bank shall not be liable for any
        error, neglect or default of any of Bank's correspondents.

    d.  Neither Bank nor its correspondents shall be in any way responsible for
        the performance of any beneficiary's obligations to Applicant or for the
        form, sufficiency, accuracy, genuineness, authority of person signing,
        falsification or legal effect, of any documents required by the Credit
        if such documents appear in order on their face. Whether the documents
        conform to the terms of the Credit and whether any demand is timely and
        in proper form shall be determined by Bank in its sole discretion, which
        determination shall be final and binding on Applicant.

    e.  Subject to Section 6b, Bank may at Applicant's request increase the
        amount of the Credit, extend the time for making and honoring of demands
        under the Credit and otherwise modify the terms and conditions governing
        the Credit. As so modified, all provisions of the Credit, and all action
        taken by Bank or Bank's correspondents in connection therewith, shall be
        binding upon Applicant.

    f.  Applicant will promptly examine the Credit, any amendments thereto and
        all information, documents and instruments delivered to Applicant from
        time to time by Bank and shall notify U. S. Bank within five U. S. Bank
        banking days after receipt if Applicant claims that Bank has failed to
        comply with Applicant's instructions or Bank's obligations with respect
        to the Credit, has wrongfully honored or dishonored any presentation
        under the Credit or claims any other irregularity. If Applicant does not
        so notify U. S. Bank within such time period, Applicant shall be
        conclusively deemed to have waived and shall be precluded from asserting
        such claim(s).

    g.  Bank may receive, accept or pay as complying with the terms of the
        Credit, any drafts or other documents, otherwise in order, which appear
        on their face to be signed by or issued to the administrator, executor,
        successor or trustee in bankruptcy of or the receiver for any of the
        property of, or any other person or


                                   Page 2 of 6
<PAGE>   18
        entity acting as the representative or in the place of, the party in
        whose name the Credit provides that any drafts or other documents should
        be drawn or issued.

4.  DEFAULT AND REMEDIES

    a.  Time is of the essence of this Agreement. The occurrence of any of the
        following shall be an Event of Default hereunder:

       i.    Default in payment or performance of any of Applicant's obligations
             hereunder or under any promissory note or other agreement between
             Bank and Applicant;

       ii.   Default under any security documents securing Applicant's
             obligations hereunder, whether executed by Applicant or any other
             person;

       iii.  Levy or proceeding against any property of Applicant or any
             guarantor of Applicant's obligations hereunder ("Guarantor");

       iv.   Death, dissolution, termination of existence, insolvency or
             business failure of, appointment of a receiver for any part of the
             property of, assignment for the benefit of creditors by,
             commencement of any proceeding under any bankruptcy or insolvency
             laws by or against, or entry of any judgment against, Applicant or
             any Guarantor;

       v.    Any warranty, representation or statement made or furnished to Bank
             by Applicant or any Guarantor proves to have been false in any
             material respect when made or furnished;

       vi.   Any event which gives the holder of any debt obligation of
             Applicant or any Guarantor the right to accelerate its maturity,
             whether or not such right is exercised;

       vii.  Any guaranty of Applicant's obligations hereunder ceases to be, or
             is asserted by any person not to be, in full force and effect; or

       viii. Any material adverse change in the financial condition or
             management of Applicant or any Guarantor, or Bank for any reason in
             good faith, deems itself insecure.

    b.  Upon the occurrence of any Event of Default and at any time thereafter,
        Bank at its option and in addition to all other rights of Bank under
        this Agreement, any related agreement and applicable law, may without
        notice or demand declare the amount for which the Credit was issued and
        any other amounts owing hereunder immediately due and payable.

5.  CHANGES TO LAWS AND REGULATIONS If any adoption of or change in law or
    regulation, or in the interpretation or administration thereof by any
    official authority shall impose on Bank any tax, charge, fee, deduction or
    withholding of any kind whatsoever, or shall impose or modify any reserve
    requirements, standards regarding capital adequacy or any other conditions
    affecting this Agreement or the Credit, and the result of any of the
    foregoing shall be to increase the cost to Bank of issuing and maintaining
    the Credit, reduce the amount of any sum receivable by Bank hereunder or
    reduce the rate of return on Bank's capital, then Applicant shall pay to
    Bank upon demand such additional amount or amounts as Bank may specify to be
    necessary to compensate Bank for such additional costs incurred or reduction
    suffered.

6.  GENERAL

    a.  Each Application shall be subject to all terms and conditions of this
        Agreement.

    b.  Notwithstanding any other term hereof, (i) the Credit can be revoked or
        amended only with the consent of the beneficiary of the Credit, all
        Applicants (including any Correspondent Bank signing this Agreement),
        the Bank issuing the Credit and any confirming bank, and (ii)
        instructions concerning discrepancies must be given by all such
        Applicants.

    c.  If the Account Party on the Application is not an Applicant hereunder,
        the Account Party shall have no rights against Bank; and Applicant shall
        deliver to U. S. Bank an agreement satisfactory to Bank executed by the
        Account Party, providing that Bank without notice to or consent of the
        Account Party, may deal with Applicant as if Applicant were the named
        Account Party, and waiving any and all present and future claims and
        defenses against Bank.

    d.  Applicant shall give U. S. Bank prior written notice of any change of
        name, address or place of business. Any notice of any nature by
        Applicant to Bank must be given at U. S. Bank's office to which the
        Application was submitted.

    e.  The singular includes the plural. If Applicant consists of more than one
        person, the obligations of Applicant hereunder are joint and several and
        are binding upon any marital community of which any Applicant is a
        member. This Agreement shall be binding on Applicant's heirs, successors
        and assigns.



                                   Page 3 of 6
<PAGE>   19
    f.  Notwithstanding the title appearing on any Credit instrument, the rights
        and obligations of Bank and Applicant with respect to the Credit shall
        be as set forth herein.

    g.  Except as otherwise provided herein or on the Application, the Uniform
        Customs and Practice for Documentary Credits of the International
        Chamber of Commerce ("UCP") as in effect on the date of issuance of the
        Credit are fully incorporated herein and shall apply to the Credit. This
        Agreement and the Credit shall be governed by the internal laws of the
        State of Utah, United States of America (the "Governing Laws"), except
        to the extent such laws are inconsistent with the UCP. If the Credit
        provides that it is governed by laws, regulations or rules other than
        the Governing Laws (the "Specified Laws"), Applicant agrees not to
        assert any provisions of the Specified Laws as a defense to any of its
        obligations hereunder.

    h.  Applicant hereby indemnifies and agrees to hold harmless Bank, its
        officers, directors, agents, successors and assigns, from and against
        any and all liability, claims, demands, losses and expenses (including
        without limitation legal costs and attorney fees incurred in any
        appellate proceeding, proceeding under the bankruptcy code or
        receivership and post-judgment attorney fees incurred in enforcing any
        judgment), arising from or in connection with this Agreement, the Credit
        or any related transaction, unless arising from Bank's gross negligence
        or willful misconduct.

    i.  Applicant hereby authorizes Bank to issue Credits and amendments thereto
        based upon, and to otherwise rely on and act in accordance with, any
        oral or written communication, including but not limited to any
        electronic communication and any facsimile transmission, reasonably
        believed by Bank to have been or which purportedly has been, given by
        one of the authorized persons specified on Schedule 1, even if such
        communication proves not to have been given by an authorized person.

    j.  Bank's waiver of any right on any occasion or occasions shall not be
        construed as a bar or waiver of any other right or of such right on any
        other occasion. Applicant hereby waives and agrees not to assert any
        defense under any applicable statute of limitations, to the fullest
        extent permitted by law. In addition to all other rights which Bank may
        have, Applicant hereby authorizes Bank to set off any and all deposits
        or other monies due from Bank at any of its offices against any and all
        of Applicant's obligations hereunder, whether or not Bank shall have
        made any demand under this Agreement.

    k.  Without notice to any Applicant and without affecting Bank's rights or
        Applicant's obligations, Bank may deal in any manner with any person who
        at any time is liable for, or provides any collateral for, any
        obligations of Applicant to Bank. Without limiting the foregoing, Bank
        may impair, release (with or without substitution of new collateral) and
        fail to perfect a security interest in, any collateral provided by any
        person; and sue, fail to sue, agree not to sue, release, and settle or
        compromise with, any person.

    l.  Whether or not litigation or arbitration is commenced, Applicant
        promises to pay all attorney fees and other costs and expenses incurred
        by Bank in collecting overdue amounts or construing or enforcing any
        provision of this Agreement or the Credit, including but not limited to
        reasonable attorney fees at trial, in any arbitration, appellate
        proceeding, proceeding under the bankruptcy code or receivership and
        post-judgment attorney fees incurred in enforcing any judgment.

    m.  Bank's issuance of the Credit shall constitute its agreement to the
        terms of this Agreement.

    n.  This Agreement is a continuing agreement and shall remain in effect
        until terminated, amended or replaced. This Agreement may be terminated
        by Applicant or U. S. Bank by giving notice of termination to the other
        and may be amended or replaced by a written agreement signed by
        Applicant and accepted by U. S. Bank; provided, however that no such
        termination, amendment or replacement shall alter or affect the
        undertaking of Applicant or Bank with respect to any Credit issued prior
        to such termination, amendment or replacement.

    o.  Nothing in this Agreement shall be construed as imposing any obligation
        on Bank to issue any Credit. Each Credit shall be issued by Bank in its
        sole discretion and at its sole option.

    p.  Any Correspondent Bank signing this Agreement agrees that each
        Application and Credit and this Agreement are subject to all terms and
        conditions of the most recent Correspondent Bank Letter of Credit
        Agreement between U. S. Bank and Correspondent Bank.

    q.  Bank is authorized to record electronically or otherwise any telephone
        and other oral communications between Bank and Applicant.


                                   Page 4 of 6
<PAGE>   20
    r.  All terms and conditions on the attached Schedule 1, and any replacement
        Schedule 1 are hereby incorporated herein. Applicant may change the
        provisions of Schedule 1 by executing and delivering a new Schedule 1 to
        U. S. Bank.

    s.  From time to time, Applicant may submit Applications, applications for
        amendments to Credits or other communications (each, a "Faxed Document")
        to Bank by facsimile transmission. With respect to each such facsimile
        transmission Applicant agrees: (i) each Faxed Document shall be deemed
        to be an original document and shall be effective for all purposes as if
        it were an original; (ii) Applicant shall retain the original of any
        Faxed Document and shall deliver it to Bank upon request; (iii) if
        Applicant sends Bank a manually signed confirmation of a Faxed Document
        Bank shall have no duty to compare it to the previously received Faxed
        Document nor shall it have any liability nor duty to act should the
        contents of the written confirmation differ therefrom. Any manually
        signed confirmation of a Faxed Document must be conspicuously marked
        "Previously transmitted by facsimile." Bank will not be liable for
        issuance of duplicate letters of credit or amendments thereto that
        result from Bank's receipt of confirmations not so marked; (iv) Bank
        cannot effectively determine whether a particular facsimile request is
        valid. Therefore Applicant shall have sole responsibility for the
        security of using facsimile transmissions and for any authorized or
        unauthorized Faxed Document received by Bank, purportedly on behalf of
        Applicant

7.  ARBITRATION

    a.  Any Bank or Applicant may require that all disputes, claims,
        counterclaims, and defenses, including those based on or arising from
        any alleged tort ("Claims") relating in any way to this Agreement, the
        Credit or any transaction of which this Agreement or the Credit is a
        part (the "Loan"), be settled by binding arbitration in accordance with
        the Commercial Arbitration Rules of the American Arbitration Association
        and Title 9 of the U. S. Code. All Claims will be subject to the statues
        of limitation applicable if they were litigated. This provision is void
        if the Loan, at the time of the proposed submission to arbitration, is
        secured by real property located outside of Oregon or Washington, or if
        the effect of the arbitration procedure (as opposed to any Claims of
        Applicant) would be to materially impair Bank's ability to realize on
        any collateral securing the Loan.

    b.  If arbitration occurs and each party's Claim is less than $100,000, one
        neutral arbitrator will decide all issues; if any party's Claim is
        $100,000 or more, three neutral arbitrators will decide all issues. All
        arbitrators will be active Utah State Bar members in good standing. All
        arbitration hearing will be held in Salt Lake City, Utah. In addition to
        all other powers, the arbitrator(s) shall have the exclusive right to
        determine all issues of arbitrability. Judgment on any arbitration award
        may be entered in any court with jurisdiction.

    c.  If any party institutes any judicial proceeding relating to the Loan,
        such action shall not be a waiver of the right to submit any Claim to
        arbitration. In addition, each has the right before, during, and after
        any arbitration to exercise any number of the following remedies, in any
        order or concurrently: (i) setoff; (ii) self-help repossession; (iii)
        judicial or non-judicial foreclosure against real or personal property
        collateral; and (iv) provisional remedies, including injunction,
        appointment of receiver, attachment, claim and delivery and replevin.


BY UTAH STATUTE (UCA 25-5-4) THE FOLLOWING DISCLOSURE IS REQUIRED: THIS
AGREEMENT IS A FINAL EXPRESSION OF THE AGREEMENT BETWEEN BANK AND APPLICANT AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED ORAL AGREEMENT.

APPLICANT ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS AGREEMENT

APPLICANT:                             CORRESPONDENT BANK:  (IF APPLICABLE)
DAW TECHNOLOGIES, INC.

__________________________________     _____________________________________

By:_______________________________     By:__________________________________

Title:____________________________     Title:_______________________________



                                   Page 5 of 6
<PAGE>   21
                                 -----------------------------------------------
                                 FOR BANK USE - SIGNATURE VERIFIED AND AUTHORITY
                                 TO SIGN CONFIRMED.

                                 -----------------------------------------------
                                               AUTHORIZED SIGNATURE
                                 -----------------------------------------------


                                 -----------------------------------------------
                                     OFFICER'S NAME AND NUMBER (PLEASE PRINT)
                                 -----------------------------------------------

                                          U.S. BANK
                                 -----------------------------------------------
                                           COMPANY           COST CENTER
                                 -----------------------------------------------


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