<PAGE>

      [LOGO]

                                           COMMERCIAL PORTFOLIO ADMINISTRATION

                           BUSINESS LOAN AGREEMENT 

This Business Loan Agreement (this "Agreement") is entered into as of the 
date set forth below between Union Bank of California, N.A. ("Bank") and the 
undersigned ("Borrower") with respect to each and every extension of credit 
(whether one or more, collectively referred to as the "Loan") from Bank to 
Borrower. In consideration of the Loan. Bank and Borrower agree to the 
following terms and conditions.

1.   THE LOAN

     1.1  THE NOTE. The Loan is evidenced by one or more promissory notes or 
     other evidences of indebtedness, including each amendment, extension, 
     renewal or replacement thereof, which are incorporated herein by this 
     reference (whether one or more, collectively referred to as the "Note").

     -    Wherever "N/A" appears in a blank in this Agreement, it means the 
     Subsection in which it appears is deemed deleted from this Agreement.

     1.2  REVOLVING LOAN CLEAN-UP PERIOD. For any portion of the Loan which 
     is a revolving loan, at least N/A consecutive days during each 12 month 
     period the principal amount outstanding under such revolving loan must be 
     zero.

     1.3  TERM LOAN AVAILABILITY PERIOD. For any portion of the Loan which 
     is a term loan, loan proceeds shall be available for disbursement from 
     N/A through N/A only.

     1.4  FEE. Borrower shall pay to Bank a fee of $ N/A.

     1.5  COLLATERAL. The payment and performance of all obligations of 
     Borrower under the Loan Documents is and shall be during the term of the 
     Loan secured by a perfected security interest in such real or personal 
     property collateral as is required by Bank and each security interest 
     shall rank in first priority unless otherwise specified in writing by Bank.

     1.6  GUARANTY. The payment and performance of all obligations of 
     Borrower under the Loan Documents are and shall be during the term of the 
     Loan guaranteed by: N/A

     1.7  SUBORDINATION. Certain other obligations of Borrower, namely those 
     certain 7 7/8% Convertible Subordinated Debentures due 2004, are junior in 
     payment to Bank debt and other obligations of Borrower as described in the 
     Indenture document dated August 18, 1994 and all subsequent Supplemental 
     Indentures amending that document.

2.   CONDITIONS TO AVAILABILITY OF THE LOAN. Before Bank is obligated to 
disburse all or any portion of the Loan, Bank must have received (a) the Note 
and every other document required by Bank in connection with the Loan, each 
of which must be in form and substance satisfactory to Bank (together with 
this Agreement, referred to as the "Loan Documents"), (b) confirmation of the 
perfection of its security interest in any collateral for the Loan, and (c) 
payment of any fee required in connection with the Loan.

3.   REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants (and 
each request for a disbursement of the proceeds of the Loan shall be deemed a 
representation and warranty made on the date of such request) that:

     3.1  Borrower is an individual or Borrower is duly organized and 
     existing under the laws of the state of its organization and is duly 
     qualified to conduct business in each jurisdiction in which its business
     is conducted;

     3.2  The execution, delivery and performance of the Loan Documents 
     executed by Borrower are within Borrower's power, have been duly 
     authorized, are legal, valid and binding obligations of Borrower, and 
     are not in conflict with the terms of any charter, bylaw, or other 
     organization papers of Borrower or with any law, indenture, agreement 
     or undertaking to which Borrower is a party or by which Borrower is bound 
     or affected;

     3.3  All financial statements and other financial information submitted 
     by Borrower to Bank are true and correct in all material respects, and 
     there has been no material adverse change in Borrower's financial 
     condition since the date of the latest of such financial statement;

     3.4  Borrower is properly licensed and in good standing in each state in 
     which Borrower is doing business, and Borrower has complied with all 
     laws and regulations affecting Borrower, including without limitation, 
     each applicable fictitious business name statute;

     3.5  There is no event which is, or with notice or lapse of time or both 
     would be, and Event of Default (as defined in Article 6);

          445 South Figuesoa Street, Floor 16, Los Angeles, 
            California 90071-1655
          P.O. Box 3100, Los Angeles, California 90051-1100
          213 236 7806  Fax 213 236 7635


                                      -1-

<PAGE>

     3.6  Borrower is not engaged in the business of extending credit for the 
     purpose of, and no part of the Loan will be used, directly or 
     indirectly, for purchasing or carrying margin stock within the meaning of 
     Federal Reserve Board Regulation U; and

     3.7  Borrower is not aware of any fact, occurrence or circumstance which 
     Borrower has not disclosed to Bank in writing which has, or could 
     reasonably be expected to have, a material adverse effect on Borrower's 
     ability to repay the Loan or perform its obligations under the Loan 
     Documents.

4.   COVENANTS. Borrower agrees, so long as the Loan or any commitment to 
make any advance under the Loan is outstanding and until full and final 
payment of all sums outstanding under any Loan Document, that Borrower will:

     4.1  MAINTAIN:

          (a)  Working Capital equal to at least $ N/A . As used herein. 
          "Working Capital" means the excess of current assets over current 
          liabilities;

          (b)  A ratio of current assets to current liabilities of at least 
          1.25 :1.00;

          (c)  A quick ratio of cash, accounts receivable and marketable 
          securities to current liabilities of at least N/A  :1.00;

          (d)  Tangible Net Worth of at least $25,000,000.00 (As used herein 
          "Tangible Net Worth" means net worth increased by indebtedness of 
          Borrower subordinated to Bank or junior in payment to Bank debt and 
          decreased by patents, licenses, trademarks, trade names, goodwill 
          and other similar intangible assets, including capitalized software 
          costs, organizational expenses, and monies due from affiliates 
          including officers, shareholders and directors);

          (e)  A ratio of total liabilities to Tangible Net Worth of not 
          greater than 1.75:1.00 (As used herein "Total Liabilities" means 
          gross liabilities as per GAAP less any indebtedness of Borrower 
          subordinated to Bank or junior in payment to Bank debt. "Tangible 
          Net Worth" means net worth increased by indebtedness of Borrower 
          subordinated to Bank or junior in payment to Bank debt and 
          decreased by patents, licenses, trademarks, trade names, goodwill 
          and similar other intangible assets including capitalized software 
          costs, organizational expenses and monies due from affiliates 
          (including officers, shareholders and directors);

          (f)  A profit after taxes of not less than $ N/A , to be measured 
          as of the end of each fiscal N/A of Borrower for the N/A period 
          immediately preceding the date of measurement;

          (g)  A ratio of Cash Flow to Debt Service of at lease N/A :1.00. 
          Compliance with this subsection to be measured as of the end of 
          each fiscal N/A of Borrower. (As used herein, "Cash Flow" means net 
          profit after taxes, to which depreciation, amortization and other 
          non-cash expenses are added for the N/A month period immediately 
          preceding the date of calculation, and "Debt Service" means that 
          portion of long-term liabilities and capital leases coming due 
          within ___ months after the date of calculation); and

          (h)  No operating losses for any two (2) consecutive quarters.

All accounting terms used in this Agreement shall have the definitions given 
them by generally accepted accounting principles, unless otherwise defined 
herein. 

     4.2  Give written notice to Bank within 15 days of the following:

          (a)  Any litigation or arbitration proceeding affecting Borrower 
          where the amount in controversy is $ N/A or more;

          (b)  Any material dispute which may exist between Borrower and any 
          government regulatory body or law enforcement body;

          (c)  Any Event of Default of any event which, upon notice, or lapse 
          of time, or both, would become an Event of Default;

          (d)  Any other matter which has resulted or is likely to result in 
          a material adverse change in Borrower's financial condition or 
          operation; and

          (e)  Any change in Borrower's name or the location of Borrower's 
          principal place of business, or the location of any collateral for 
          the Loan, or the establishment of any new place of business or the 
          discontinuance of any existing place of business.

     4.3  Furnish to Bank an income statement, balance sheet, and statement of 
     retained earnings, with supportive schedules ("Financial Statement"), 
     and any other financial information requested by Bank, prepared in 
     accordance with generally accepted accounting principles and in a form 
     satisfactory to Bank as follows:

          (a)  Within 45 days after the close of each quarter, except for the 
          final (month/quarter) of each fiscal year, Borrower's Financial 
          Statement as of the close of such period;

          (b)  Within 120 days after the close of each fiscal year, a copy of 
          Borrower's annual Financial Statement prepared by a certified 
          public accountant on an audited basis. Any independent certified 
          public accountant who prepares Borrower's Financial Statement shall 
          be selected by Borrower and reasonably satisfactory to Bank;

          (c)  Within N/A days after the close of each fiscal year, a copy of 
          each guarantor's annual Financial Statement;


                                      -2-

<PAGE>

          (d)  If any portion of the Loan is a Borrowing Base Loan, within  
          N/A  days after each calendar month end, a copy of Borrower's 
          monthly accounts receivable and accounts payable agings, and a 
          certification of compliance with the borrowing base in the 
          Borrowing Base Addendum attached hereto, executed by Borrower, 
          which certificate shall accurately report Borrower's Accounts, 
          Eligible Accounts, Inventory, and Eligible Inventory; and

          (e)  Promptly upon request, any other financial information 
          requested by Bank.

     4.4  Furnish to Bank, on Bank's request, a copy of Borrower's and each 
     guarantor's most recently filed federal income tax return with all 
     accompanying schedules.

     4.5  Pay or reimburse Bank for all costs, expenses and fees incurred by 
     Bank in preparing and documenting this Agreement and the Loan and all 
     amendments and modifications thereof, including but not limited to all 
     filing and recording fees, costs of appraisals, insurance and attorney's 
     fees, including the reasonable estimate of the allocated costs and 
     expenses of in-house legal counsel and staff.

     4.6  Maintain and preserve Borrower's existence, present form of 
     business and all rights, privileges and franchises necessary or 
     desirable in the normal course of its business, and keep all of 
     Borrower's properties in good working order and condition.

     4.7  Maintain and keep in force insurance with companies acceptable to 
     Bank and in such amounts and types, including without limitation fire 
     and public liability insurance, as is usual in the business carried on 
     by Borrower, or as Bank may reasonably request. Such insurance polices 
     must be in form and substance satisfactory to Bank.

     4.8  Maintain adequate books, accounts and records and prepare all 
     financial statements required hereunder in accordance with generally 
     accepted accounting principles, and in compliance with the regulations 
     of any governmental regulatory body having jurisdiction over Borrower or 
     Borrower's business and permit employees or agents of Bank at any 
     reasonable time to inspect Borrower's assets and properties, and to 
     examine or audit Borrower's books, accounts and records and make copies 
     and memoranda thereof.

     4.9  At all times comply with, or cause to be complied with, all laws, 
     statutes, rules, regulations, orders and directions of any governmental 
     authority having jurisdiction over Borrower or Borrower's business, and 
     all material agreements to which Borrower is a party.

     4.10 Except as provided in this Agreement, or in the ordinary course of 
     its business as currently conducted, not make any loans or advances, 
     become a guarantor or surety, pledge its credit or properties in any 
     manner, or extend credit.

     4.11 Not purchase the debt or equity of another person or entity except 
     for savings accounts and certificates of deposit of Bank, direct U.S. 
     Government obligations and commercial paper issued by corporations with 
     top ratings of Moody's or Standard & Poor's, provided that all such 
     permitted investments shall mature within one year of purchase.

     4.12 Not create, assume or suffer to exist any mortgage, encumbrance, 
     security interest, pledge or lien ("Lien") on Borrower's real or 
     personal property, whether now owned or hereafter acquired, or upon the 
     income or profits thereof except the following: (a) Liens in favor of 
     Bank, (b) Liens for taxes or other items not delinquent or contested in 
     good faith, or (c) other Liens which do not exceed in the aggregate  
     $ N/A  at any one time.

     4.13 Not sell or discount any account receivable or evidence of 
     indebtedness, except to Bank, not borrow any money or become 
     contingently liable for money borrowed, except pursuant to agreements 
     made with Bank.

     4.14 Neither liquidate, dissolve, enter into any consolidation, merger, 
     partnership, or other combination; nor convey, sell or lease all or the 
     greater part of its assets or business; nor purchase or lease all or the 
     greater part of the assets or business of another.

     4.15 Not engage in any business activities or operations substantially 
     different from or unrelated to present business activities and 
     operations.

     4.16 Not, in any single fiscal year of Borrower, expand or incur 
     obligations of more than $ N/A.

     4.17 Not, in any single fiscal year of Borrower, enter into any lease of 
     real or personal property which would cause Borrower's aggregate annual 
     obligations under all such real and personal property leases to exceed 
     $ N/A.

     4.18 Borrower will promptly, upon demand by Bank, take such further 
     action and execute all such additional documents and instruments in 
     connection with this Agreement as Bank in its reasonable discretion 
     deems necessary, and promptly supply Bank with such other information 
     concerning its affairs as Bank may request from time to time.

5. EVENTS OF DEFAULT.  The occurrence of any of the following events ("Events 
of Default") shall terminate any obligation on the part of Bank to make or 
continue the Loan and automatically, unless otherwise provided under the Loan 
Documents, shall make all sums of interest and principal and any other 
amounts owing under the Loan immediately due and payable, without notice of 
default, presentment or demand for payment, protest or notice of nonpayment 
or dishonor, or any other notices or demands:

     5.1  Borrower shall default in the due and punctual payment of the 
     principal of or the interest on the Note or any of the Loan Documents;

     5.2  Any default shall occur under the Note;

     5.3  Borrower shall default in the due performance or observance of any 
     covenant or condition of the Loan Document;


                                     -3-

<PAGE>

     5.4  Any guaranty or subordination agreement required hereunder is 
     breached or becomes ineffective, or any guarantor or subordinating
     creditor dies or disavows or attempts to revoke or terminate such 
     guaranty or subordination agreement; or

6.   MISCELLANEOUS.

     6.1  The rights, powers and remedies given to Bank hereunder shall be 
     cumulative and not alternative and shall be in addition to all rights, 
     powers, and remedies given to Bank by law against Borrower or any other 
     person, including but not limited to Bank's rights of setoff or banker's
     lien.

     6.2  Any forbearance or failure or delay by Bank in exercising any 
     right, power or remedy hereunder shall not be deemed a waiver thereof 
     and any single or partial exercise of any right, power or remedy shall
     not preclude the further exercise thereof. No waiver shall be effective 
     unless it is in writing and signed by an officer of Bank.

     6.3  The benefits of this Agreement shall inure to the successors and 
     assigns of Bank and the permitted successors and assignees of Borrower,
     and any assignment by Borrower without Bank's consent shall be null and 
     void.

     6.4  This Agreement and all other agreements and instruments required by 
     Bank in connection herewith shall be governed by and construed according 
     to the laws of the State of California.

     6.5  Should any one or more provisions of this Agreement be determined to
     be illegal or unenforceable, all other provisions nevertheless shall be 
     effective. In the event of any conflict between the provisions of this 
     Agreement and the provisions of any note or reimbursement agreement 
     evidencing any indebtedness hereunder, the provisions of such note or 
     reimbursement agreement shall prevail.

     6.6  Except for documents and instruments specifically referenced 
     herein, this Agreement constitutes the entire agreement between Bank and 
     Borrower regarding the Loan and and all prior communications, verbal or 
     written, between Borrower and Bank shall be of no further effect or 
     evidentiary value.

     6.7  The section and subsection headings herein are for convenience of 
     reference only and shall not limit or otherwise affect the meaning hereof.

     6.8  This Agreement may be amended only in writing signed by all parties 
     hereto.

     6.9  Borrower and Bank may execute one or more counterparts to this 
     Agreement, each of which shall be deemed an original, but taken together 
     shall be one and the same instrument.

     6.10 Any notices or other communications provided for or allowed 
     hereunder shall be effective only when given by one of the following 
     methods and addressed to the respective party at its address given with 
     the signatures at the end of this Agreement and shall be considered to 
     have been validly given: (a) upon delivery, if delivered personally; 
     (b) upon receipt, if mailed, first class postage prepaid, with the 
     United States Postal Service; (c) on the next business day if sent by 
     overnight courier service of recognized standing; and (d) upon 
     telephoned confirmation of receipt, if telecopied.

7.        ADDITIONAL PROVISIONS. The following additional provision, if any, 
are hereby made part of this Agreement:

The following additional provisions, if any, are hereby made a part of this 
Agreement:

     7.1  Borrower shall pay to Bank a non-refundable fee to be payable in 
     arrears on the last day of each calendar quarter and on maturity date, 
     and to be computed at a rate per annum equal to 1.25% on the average 
     daily unused amount on this line of credit during such quarter.
     
     7.2  If anything within this agreement is in conflict with any prior 
     agreement with Borrower or any Guarantor, then this agreement 
     supersedes such prior agreement(s).

THIS AGREEMENT is executed on behalf of the parties as of October 4, 1996.

<TABLE>
<S>                                            <C>
Union Bank of California, N.A. ("Bank")        The MacNeal Schwendler Corporation ("Borrower)

By: /s/ Kerry Turner                           By: /s/ Thomas C. Curry
   ------------------------------------           ------------------------------------
        Kerry Turner                           Title:  President & CEO
Title:  Vice President                         
</TABLE>

                                     -4-

<PAGE>

<TABLE>
<S>                                            <C>
Address where notices to Bank are to be sent:  Address where notices to Borrower are to be sent:

Los Angeles Headquarters Banking Office        The MacNeal Schwendler Corp.
446 South Figueroa Street                      815 W. Colorado Blvd.
Los Angeles, CA 90071                          Los Angeles, CA 90041
Attn: Kerry Turner                             Attn: Thomas C. Curry, President

Fax Number: (213) 236-4031                     Fax Number: (213) 259-4969
Telephone No.: (213) 236-7780                  Telephone No.: (213) 259-3841
</TABLE>

                                     -5-




<PAGE>

                                FIRST AMENDMENT
                         TO THE BUSINESS LOAN AGREEMENT


THIS FIRST AMENDMENT TO THE BUSINESS LOAN AGREEMENT [this "First Amendment"] 
dated as of February 21, 1997, is made and entered into by and between THE 
MACNEAL-SCHWENDLER CORPORATION, a Delaware Corporation ("Borrower"), and 
UNION BANK OF CALIFORNIA, N.A. ("Bank").

                                   RECITALS:

A.   Borrower and Bank are parties to that certain Business Loan Agreement 
dated October 4, 1996, (the "Agreement"), pursuant to which Bank agreed to 
extend credit to borrower.

B.   Borrower and Bank desire to amend the Agreement subject to the terms and 
conditions of this First Amendment.

                                   AGREEMENT

In consideration of the above recitals and of the mutual covenants and 
conditions contained herein, Borrower and Bank agree as follows:

1.   DEFINED TERMS. Initially capitalized terms used herein which are not 
otherwise defined shall have the meanings assigned thereto in the Agreement.

2.   AMENDMENTS TO THE AGREEMENT.

     (a)  Section 1.4  Fee of the Agreement is hereby amended by substituting 
"The borrower shall pay to Bank a non-refundable commitment fee of .15%, 
payable up-front."

     (b)  Section 4.1(b) A ratio of current assets to current liabilities of 
the Agreement is hereby amended by substituting the rate of "N/A:1.0" for the 
rate of "1.25:1.00."

     (c)  Section 4.1(c) A quick ratio of the Agreement is hereby amended by 
substituting the ratio of "1.25:1.00" for the ratio "N/A:1.00";

     (d)  Section 4.1(d) Tangible net Worth of the Agreement is hereby 
amended by substituting "at least $25,000,000.00 on January 31, 1997 to be 
increased annually by 40% of each year's net income" for "at least 
$25,000,000.00."

     (e)  Section 4.1(e) A ratio of total liabilities to Tangible Net Worth 
of the Agreement is hereby amended by substituting the ratio of "2.25:1.00" 
for the ratio "1.75:1.00"

     (f)  Section 4.12(c) of the Agreement is hereby amended by substituting 
"(c) equipment leases in the normal course of business" for "(c) other Liens 
which do not exceed in the aggregate $N/A at any one time."

     (g)  Section 4.14 of the Agreement is hereby amended in its entirety as 
follows: "Neither liquidate, dissolve, enter into any consolidation, merger, 
partnership, or other combination; nor convey, sell or lease all or the 
greater part of its assets or business."

     (h)  Section 4.19 of the Agreement is hereby added in its entirety as 
follows: "Not use any portion of the Loan for hostile or unfriendly 
acquisition of another company or its operations.

     (i)  Section 4.20 of the Agreement is hereby added in its entirety as 
follows: "On any acquisition over $3,000,000.00, a pro-forma compliance 
certificate will be provided to Bank before the acquisition is finalized 
certifying that the acquisition will not cause a default under the existing 
covenants and that it complies to all Bank requirements.

     (j)  Section 7.1 Rate per annum of the Agreement is hereby amended by 
substituting ".30%" for "1.25%."


                                     - 1 -

<PAGE>

3.     This FIRST Amendment shall become effective as of the date hereof 
when, and only when, Bank shall have received all of the following, in form 
and substance satisfactory to Bank:

       (a)     The counterpart of this FIRST Amendment, duly executed by 
       Borrower;

       (b)     The $15,000,000.00 Note, duly executed by Borrower;

       (c)     The $22,500.00 fee in connection with this FIRST Amendment; and,

       (d)     Such other documents, instruments or agreements as Bank may 
       reasonably deem necessary.

4.     RATIFICATION. Except as specifically amended hereinabove, the 
Agreement shall remain in full force and effect and is hereby ratified and 
confirmed.

5.     REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants as 
follows:

       (a)     Each of the representations and warranties contained in the 
       Agreement, as may be amended hereby, is hereby reaffirmed as of the 
       date hereof, each as if set forth herein;

       (b)     The execution, delivery and performance of the FIRST Amendment 
       and any other instruments or documents in connection herewith are 
       within Borrower's power, have been duly authorized, are legal, valid 
       and binding obligations of Borrower, and are not in conflict with the 
       terms of any charter, bylaw, or other organization papers of Borrower 
       or with any law, indenture, agreement or undertaking to which Borrower 
       is a party or by which Borrower is bound or affected;

       (c)     No event has occurred and is continuing or would result from 
       this FIRST Amendment which constitutes or would constitute an Event of 
       Default under the Agreement.

6.     GOVERNING LAW. This FIRST Amendment and all other instruments or 
documents in connection herewith shall be governed by and construed according 
to the laws of the State of California.

7.     COUNTERPARTS. This FIRST Amendment may be executed in two or more 
counterparts, each of which shall be deemed an original and all of which 
together shall constitute one and the same instrument.

WITNESS the due execution hereof as of the date first above written.



THE MACNEAL-SCHWENDLER CORPORATION          UNION BANK OF CALIFORNIA, N.A.
By: /s/ Louis A. Greco                      By: /s/ Kerry Turner
    ------------------------------              ----------------------------
Title: CFO                                  Title: VP
       ---------------------------                 -------------------------

                                     - 2 -

<PAGE>

UNION
  BANK OF
CALIFORNIA

                               SECOND AMENDMENT
                        TO THE BUSINESS LOAN AGREEMENT

THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Second Amendment") dated as of 
April 21, 1998, is made and entered into by and between THE 
MACNEAL-SCHWENDLER CORPORATION, a Delaware Corporation ("Borrower"), and 
UNION BANK OF CALIFORNIA, N.A. ("Bank").

                                   RECITALS: 

A.   Borrower and Bank are parties to that certain Business Loan Agreement 
dated October 4, 1996 (the "Agreement") and that certain First Amendment 
dated February 21, 1997 (the "First Amendment"), pursuant to which Bank 
agreed to extend credit to Borrower.

B.   Borrower and Bank desire to amend the Agreement subject to the terms and 
conditions of this Second Amendment.

                                  AGREEMENT:

In consideration of the above recitals and of the mutual covenants and 
conditions contained herein, Borrower and Bank agree as follows:

1.   DEFINED TERMS. Initially capitalized terms used herein which are not 
otherwise defined shall have the meanings assigned thereto in the Agreement.

2.   AMENDMENTS TO THE AGREEMENT.

     (a)Section 4.1(d) Tangible Net Worth of the Agreement is hereby amended 
by substituting "at least $30,000,000 on January 31, 1998 to be increased 
annually by 40% of each year's net income" for "at least $25,000,000 on 
January 31, 1997 to be increased annually by 40% of each year's net income."

3.   EFFECTIVENESS OF THE SECOND AMENDMENT. This SECOND Amendment shall 
become effective as of the date hereof when, and only when, Bank shall have 
received all of the following, in form and substance satisfactory to Bank:

     (a)  The counterpart of this SECOND Amendment, duly executed by Borrower;

     (b)  The $15,000,000 Note, duly executed by Borrower;

     (c)  The $22,500 fee in connection with this SECOND Amendment; and,

     (d)  Such other documents, instruments or agreements as Bank may 
          reasonably deem necessary.

4.  RATIFICATION. Except as specifically amended hereinabove, the Agreement 
shall remain in full force and effect and is hereby ratified and confirmed.

5.  REPRESENTATION AND WARRANTIES.  Borrower represents and warrants as 
follows:

     (a)  Each of the representations and warranties contained in the 
Agreement, as may be amended hereby, is hereby reaffirmed as of the date 
hereof, each as if set forth herein;

     (b)  The execution, delivery and performance of the SECOND Amendment and 
any other instruments or documents in connection herewith are within 
Borrower's power, have been duly authorized, are legal, valid and binding 
obligations of Borrower, and are not in conflict with the terms of any 
charter, bylaw, or other organization papers of Borrower or with any law, 
indenture, agreement or undertaking to which Borrower is a party or by which 
Borrower is bound or affected;


<PAGE>

     (c)  No event has occurred and is continuing or would result from this 
SECOND Amendment which constitutes or would constitute an Event of Default 
under the Agreement.

6.   GOVERNING LAW. This SECOND Amendment and all other instruments or 
documents in connection herewith shall be governed by and construed according 
to the laws of the State of California.

7.   COUNTERPARTS. This SECOND Amendment may be executed in two or more 
counterparts, each of which shall be deemed an original and all of which 
together shall constitute one and the same instrument.

WITNESS the due execution hereof as of the date first above written.



THE MACNEAL-SCHWENDLER CORPORATION             UNION BANK OF CALIFORNIA, N.A.

By: /s/ Thomas C. Curry                        By: [ILLEGIBLE]
    ------------------------------                 --------------------------  
Title: President                               Title: Vice President
       ---------------------------                    ------------------------



<PAGE>


UNION
  BANK OF
CALIFORNIA


                                PROMISSORY NOTE
                                  (BASE RATE)



<TABLE>
<S>                                                    <C>
--------------------------------------------------------------------------------------------------------------------
Borrower Name   THE MACNEAL-SCHWENDLER CORPORATION
--------------------------------------------------------------------------------------------------------------------
Borrower Address                                         Office 21061         Loan Number   5624724538 0080-00-0-000
815 COLORADO BLVD                                      -------------------------------------------------------------
LOS ANGELES, CA 90041-1777                               Maturity Date JULY 3, 2000            Amount $15,000,000.00
--------------------------------------------------------------------------------------------------------------------
</TABLE>

$15,000,000.00                                            Date    APRIL 6, 1998


FOR VALUE RECEIVED, on JULY 3, 2000, the undersigned ("Debtor") promises to 
pay to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated 
below, the principal sum of FIFTEEN MILLION AND NO/100 Dollars 
($15,000,000.00), or so much thereof as is disbursed, together with interest 
on the balance of such principal from time to time outstanding, at the per 
annum rate or rates and at the times set forth below.

1.  INTEREST PAYMENTS. Debtor shall pay interest on the 3RD day of each MONTH 
(commencing MAY 3, 1998). Should interest not be paid when due, it shall 
become part of the principal and bear interest as herein provided. All 
computations of interest under this note shall be made on the basis of a year 
of 360 days, for actual days elapsed.

    a. BASE INTEREST RATE. At Debtor's option, amounts outstanding hereunder 
    in minimum amounts of at least $100,000.00 shall bear interest at a rate, 
    based on an index selected by Debtor, which is 1.90% per annum in excess of
    Bank's LIBOR-Rate for the Interest Period selected by Debtor, acceptable to
    Bank.

    No Base Interest Rate may be changed, altered or otherwise modified 
    until the expiration of the Interest Period selected by Debtor. The 
    exercise of interest rate options by Debtor shall be as recorded in 
    Bank's records, which records shall be prima facie evidence of the 
    amount borrowed under either interest option and the interest rate; 
    provided, however, that failure of Bank to make any such notation in its 
    records shall not discharge Debtor from its obligations to repay in full 
    with interest all amounts borrowed. In no event shall any Interest 
    Period extend beyond the maturity date of this note.

    To exercise this option, Debtor may, from time to time with respect 
    to principal outstanding on which a Base Interest Rate is not accruing, 
    and on the expiration of any Interest Period with respect to principal 
    outstanding on which a Base Interest Rate has been accruing, select an 
    index offered by Bank for a Base Interest Rate Loan and an Interest 
    Period by telephoning an authorized lending officer of Bank located at 
    the banking office identified below prior to 10:00 a.m., Pacific time, 
    on any Business Day and advising that officer of the selected index, the 
    Interest Period and the Origination Date selected (which Origination 
    Date, for a Base Interest Rate Loan based on the LIBOR-Rate, shall 
    follow the date of such selection by no more than two (2) Business 
    Days).

    Bank will mail a written confirmation of the terms of the selection 
    to Debtor promptly after the selection is made. Failure to send such 
    confirmation shall not affect Bank's rights to collect interest at the 
    rate selected. If, on the date of the selection, the index selected is 
    unavailable for any reason, the selection shall be void. Bank reserves 
    the right to fund the principal from any source of funds notwithstanding 
    any Base Interest Rate selected by Debtor.

    b. VARIABLE INTEREST RATE. All principal outstanding hereunder which 
    is not bearing interest at a Base Interest Rate shall bear interest at a 
    rate per annum equal to the Reference Rate, which rate shall vary as 
    and when the Reference Rate changes.


    At any time prior to the maturity of this note, subject to the 
    provisions of paragraph 4, below, of this note, Debtor may borrow, repay 
    and reborrow hereon so long as the total outstanding at any one time 
    does not exceed the principal amount of this note. Debtor shall pay all 
    amounts due under this note in lawful money of the United States at 
    Bank's LOS ANGELES HEADQUARTERS COMMERCIAL BANKING Office, or such other 
    office as may be designated by Bank, from time to time.


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<PAGE>

2.  LATE PAYMENTS.  If any payment required by the terms of this note shall 
remain unpaid ten days after same is due, at the option of Bank, Debtor shall 
pay a fee of $100 to Bank.

3.  INTEREST RATE FOLLOWING DEFAULT.  In the event of default, at the option 
of Bank, and, to the extent permitted by law, interest shall be payable on 
the outstanding principal under this note at a per annum rate equal to five 
percent (5%) in excess of the interest rate specified in paragraph 1.b, 
above, calculated from the date of default until all amounts payable under 
this note are paid in full.

4.  PREPAYMENT.

        a.  Amounts outstanding under this note bearing interest at a rate 
        based on the Reference Rate may be prepaid in whole or in part at any 
        time, without penalty or premium. Debtor may prepay amounts 
        outstanding under this note bearing interest at a Base Interest Rate 
        in whole or in part provided Debtor has given Bank not less than five 
        (5) Business Days prior written notice of Debtor's intention to make 
        such prepayment and pays to Bank the liquidated damages due as a 
        result. Liquidated Damages shall also be paid, if Bank, for any other 
        reason, including acceleration or foreclosure, receives all or any 
        portion of principal bearing interest at a Base Interest Rate prior 
        to its scheduled payment date. Liquidated Damages shall be an amount 
        equal to the present value of the product of: (i) the difference (but 
        not less than zero) between (a) the Base Interest Rate applicable to 
        the principal amount which is being prepaid, and (b) the return which 
        Bank could obtain if it used the amount of such prepayment of 
        principal to purchase at bid price regularly quoted securities issued 
        by the United States having a maturity date most closely coinciding 
        with the relevant Base Rate Maturity Date and such securities were 
        held by Bank until the relevant Base Rate Maturity Date ("Yield 
        Rate"); (ii) a fraction, the numerator of which is the number of days 
        in the period between the date of prepayment and the relevant Base 
        Rate Maturity Date and the denominator of which is 360; and (iii) the 
        amount of the principal so prepaid (except in the event that 
        principal payment are required and have been made as scheduled under 
        the terms of the Base Interest Rate Loan being prepaid, then an 
        amount equal to the lesser of (A) the amount prepaid or (B) 50% of 
        the sum of (1) the amount prepaid and (2) the amount of principal 
        scheduled under the terms of the Base Interest Rate Loan being 
        prepaid to be outstanding at the relevant Base Rate Maturity Date). 
        Present value under this note is determined by discounting the above 
        product to present value using the Yield Rate as the annual discount 
        factor.

        b.  In no event shall Bank be obligated to make any payment or refund 
        to Debtor, nor shall Debtor be entitled to any setoff or other claim 
        against Bank, should the return which Bank could obtain under this 
        prepayment formula exceed the interest that Bank would have received 
        if no prepayment had occurred. All prepayments shall include payment 
        of accrued interest on the principal amount so prepaid and shall be 
        applied to payment of interest before application to principal. A 
        determination by Bank as to the prepayment fee amount, if any, shall 
        be conclusive.

        c.  Bank shall provide Debtor a statement of the amount payable on 
        account of prepayment. Debtor acknowledges that (i) Bank establishes 
        a Base Interest Rate upon the understanding that it apply to the Base 
        Interest Rate Loan for the entire Interest Period, and (ii) any 
        prepayment may result in Bank incurring additional costs, expenses or 
        liabilities; and Debtor agrees to pay these liquidated damages as a 
        reasonable estimate of the costs, expenses and liabilities of Bank 
        associated with such prepayment.

5.  DEFAULT AND ACCELERATION OF TIME FOR PAYMENT.  Default shall include, but 
not be limited to, any of the following: (a) the failure of Debtor to make 
any payment required under this note when due; (b) any breach, 
misrepresentation or other default by Debtor, any guarantor, co-maker, 
endorser, or any person or entity other than Debtor providing security for 
this note (hereinafter individually and collectively referred to as the 
"Obligor") under any security agreement, guaranty or other agreement between 
Bank and any Obligor; (c) the insolvency of any Obligor or the failure of any 
Obligor generally to pay such Obligor's debts as such debts become due; (d) 
the commencement as to any Obligor of any voluntary or involuntary proceeding 
under any laws relating to bankruptcy, insolvency, reorganization, 
arrangement, debt adjustment or debtor relief; (e) the assignment by any 
Obligor for the benefit of such Obligor's creditors; (f) the appointment, or 
commencement of any proceeding for the appointment of a receiver, trustee, 
custodian or similar official for all or substantially all of any Obligor's 
property; (g) the commencement of any proceeding for the dissolution or 
liquidation of any Obligor; (h) the termination of existence or death of any 
Obligor; (i) the revocation of any guaranty or subordination agreement given 
in connection with this note; (j) the failure of any Obligor to comply with 
any order, judgement, injunction, decree, writ or demand of any court or 
other public authority; (k) the filing or recording against any Obligor, or 
the property of any Obligor, of any notice of levy, notice to withhold, or 
other legal process for taxes other than property taxes; (l) the default by 
any Obligor personally liable for amounts owed hereunder on any obligation 
concerning the borrowing of money; (m) the issuance against any Obligor, or 
the property of any Obligor, of any writ of attachment, execution, or other 
judicial lien; or (n) the deterioration of the financial condition of any 
Obligor which results in Bank deeming itself, in good faith, insecure. Upon 
the occurrence of any such default, Bank, in its discretion, may cease to 
advance funds hereunder and may declare all obligations under this note 
immediately due and payable; however, upon the occurrence of an event of 
default under d, e, f, or g, all principal and interest shall automatically 
become immediately due and payable.

6.  ADDITIONAL AGREEMENTS OF DEBTOR.  If any amounts owing under this note 
are not paid when due, Debtor promises to pay all costs and expenses, 
including reasonable attorneys' fees, incurred by Bank in the collection or 
enforcement of this note. Debtor and any endorsers of this note, for the 
maximum period of time and the full extent permitted by law, (a) waive 
diligence, presentment, demand, notice of nonpayment, protest, notice of 
protest, and notice of every kind; (b) waive the right to assert the defense 
of any statute of limitations to any debt or obligation hereunder; and (c) 
consent to renewals and extensions of time for the payment of any amounts 
due under this note. If this note is signed by more than one party, the term 
"Debtor" includes each of the undersigned and any successors in interest 
thereof; all of whose liability shall be joint and several. Any married 
person who signs this note agrees that recourse may be had against the 
separate property of that person for any obligations hereunder. The receipt 
of any check or other item of payment by Bank, at its option, shall not be 
consent a payment on account until such check or other item of payment is 
honored when presented for payment at the drawee bank. Bank may delay the 
credit of such payment based upon Bank's schedule of funds availability, and 
interest under this note shall accrue until the funds are deemed collected. 
In any action brought under or arising out of this note, Debtor and any 
Obligor, including their successors and assigns, hereby consent to the 
jurisdiction of any competent court within the State of


                                     - 2 -

<PAGE>

California, as provided in any alternative dispute resolution agreement 
executed between Debtor and Bank, and consent to service of process by any 
means authorized by said state's law. The term "Bank" includes, without 
limitation, any holder of this note. This note shall be construed in 
accordance with and governed by the laws of the State of California. This 
note hereby incorporates any alternative dispute resolution agreement 
previously, concurrently or hereafter executed between Debtor and Bank.

7. DEFINITIONS. As used herein, the following terms shall have the meanings 
respectively set forth below: "BASE INTEREST RATE" means a rate of interest 
based on the LIBOR-Rate. "BASE INTEREST RATE LOAN" means amounts outstanding 
under this note that bear interest at a Base Interest Rate. "BASE RATE 
MATURITY DATE" means the last day of the Interest Period with respect to 
principal outstanding under a Base Interest Rate Loan. "BUSINESS DAY" means a  
day on which bank is open for business for the funding of corporate loans, 
and, with respect to the rate of interest based on the LIBOR Rate, on which 
dealings in U.S. dollar deposits outside of the United States may be carried 
on by Bank. "INTEREST PERIOD" means with respect to funds bearing interest 
at a rate based on the LIBOR Rate, any calendar period of one, three, six, 
nine or twelve months. In determining an Interest Period, a month means a 
period that starts on one Business Day in a month and ends on and includes the 
day preceding the numerically corresponding day in the next month. For any 
month in which there is no such numerically corresponding day, then as to 
that month, such day shall be deemed to be the last calendar day of such 
month. Any Interest Period which would otherwise and on a non-Business Day 
shall end on the next succeeding Business Day unless that is the first day of 
a month, in which event such Interest Period shall end on the next preceding 
Business Day. "LIBOR RATE" means a per annum rate of interest (rounded 
upward, if necessary, to the nearest 1/100 of 1%) at which dollar deposits, in 
immediately available funds and in lawful money of the United States would be 
offered to Bank, outside of the United States, for a term coinciding with the 
Interest Period selected by debtor and for an amount equal to the amount of 
principal covered by Debtor's interest rate selection, plus Bank's costs, 
including the costs, if any, of reserve requirements. "ORIGINATION DATE" 
means the first day of the Interest Period. "REFERENCE RATE" means the rate 
announced by Bank from time to time at its corporate headquarters as its 
Reference Rate. The Reference Rate is an index rate determined by Bank from 
time to time as a means of pricing certain extensions of credit and is 
neither directly tied to any external rate of interest or index nor 
necessarily the lowest rate of interest charged by Bank at any given time.


THE MACNEAL SCHWENDLER CORPORATION



By  /s/  Thomas C. Curry
   -------------------------------
Title       President
      ----------------------------


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