<PAGE>
<TABLE>
<CAPTION>

                             LOAN AGREEMENT 
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 Principal   Loan Date  Maturity  Loan No    Call  Collateral     Account   Officer    Initials 
<S>          <C>        <C>       <C>      <C>     <C>         <C>         <C>       <C>
 $4,000,000  08-5-98               849-26   55908    365        6608780924  40329         VB 
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</TABLE>

References in the shaded area are for Lender's use only and do not limit the 
applicablity of this document to any particular loan or item.

Borrower: PDS FINANCIAL CORPORATION; ET. AL.  Lender: U.S. Bank
          6171 McLeod Drive                           Commercial Services Group
          Las Vegas, NV 89120                         2300 W. Sahara, Suite 200
                                                      Las Vegas, NV 89102

THIS LOAN AGREEMENT between PDS FINANCIAL CORPORATION and PDS FINANCIAL 
CORPORATION - NEVADA (referred to in this Agreement individually and 
collectively as "Borrower") and U.S. BANK (referred to in this Agreement as 
"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 15, 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 individually and collectively PDS
   FINANCIAL CORPORATION and PDS FINANCIAL CORPORATION - NEVADA and all other
   persons and entities signing Borrowers' Note.

   BORROWING BASE.  The words "Borrowing Base" mean (as determined by Lender
   from time to time) the lesser of (a) $4,000,000.00; or (b) the sum of
   (i) 65.000% of the aggregate amount of Eligible Accounts, plus (ii) 65.000%
   of the aggregate amount of Eligible Inventory.  In determining the amount of
   the Borrowing
<PAGE>

   Base, only Eligible Accounts and Eligible Inventory of PDS FINANCIAL 
   CORPORATION - NEVADA shall be included.

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

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

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

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

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

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

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

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

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

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

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

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

       (i)  Accounts of any Account Debtor who has filed or has had filed
       against it a petition in bankruptcy or an application for relief under
       any provision of any state or federal bankruptcy, insolvency, or debtor-
       in-relief acts; or who has had appointed a trustee, custodian, or
       receiver for the assets of such
<PAGE>

       Account Debtor; or who has made an assignment for the benefit of 
       creditors or has become insolvent or fails generally to pay its debts
       (including its payrolls) as such debts become due.

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

       (k)  Accounts which have not been paid in full within 90 DAYS from the
       invoice date.  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
       10.000% of the total amount outstanding on the Account.

       (l)  That portion of the Accounts of any single Account Debtor which
       exceeds 10.000% of all of Borrower's Accounts.

       (m)  Datings; Progress Billings; Cash Sales; Service Charges.

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

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

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

       (c)  Work in progress.

       (d)  Raw Materials; Inventory outside Las Vegas, NV, held over 24
       months.

   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.

<PAGE>

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

   LENDER.  The word "Lender" means 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" means 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,
   understandings or other agreements, whether created by law, contract or
   otherwise, evidencing, governing, representing, or creating a Security
   Interest. 

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

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

<PAGE>

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

   TANGIBLE NET WORTH.  The words "Tangible Net Worth" mean Borrower's total
   assets excluding all intangible assets (i.e., goodwill, trademarks, patents,
   copyrights, organizational expenses, and similar intangible items, but
   including leaseholds and leasehold improvements) 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 its option and for its sole benefit, shall have
       conducted an audit of Borrower's Accounts, Inventory, books, records,
       and operations, and Lender shall be satisfied as to their condition.

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

       (g)  There shall not exist at the time of any Advance a condition which
       would constitute an Event of Default under this Agreement, 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 by authorized persons.  Lender may, but need
   not, require that all oral requests be confirmed in writing.  Each Advance
   shall be conclusively deemed to have been made at the request of and for the
   benefit of Borrower (a) when credited to any deposit account of Borrower
   maintained with Lender or (b) when advanced in accordance with the
   instructions of an authorized person.  Lender, at its option, may set a
   cutoff time, after which all requests for Advances will be treated as having
   been requested on the next succeeding Business Day.

   MANDATORY LOAN REPAYMENTS.  If at any time the aggregate principal amount of
   the outstanding Advances shall exceed the applicable Borrowing Base,
   Borrower, immediately upon written or oral notice from Lender, shall pay to
   Lender an amount equal to the difference between the outstanding principal
   balance of
<PAGE>

   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, general Intangibles, and
Inventory.  Lender's Security Interests in the Collateral shall be continuing
liens and shall include the proceeds and products of the Collateral, including
without limitation the proceeds of any insurance.  With respect to the
Collateral, Borrower agrees and represents and warrants to Lender:

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

   COLLATERAL RECORDS.  Borrower does now, and at all times hereafter shall,
   keep correct and accurate records of the Collateral, all of which records
   shall be available to Lender or Lender's representative upon demand for
   inspection and copying at any reasonable time.  With respect to the
   Accounts, Borrower agrees to keep and maintain such records as Lender may
   require, including without limitation information concerning Eligible
   Accounts and Account balances and agings.  With respect to the Inventory,
   Borrower agrees to keep and maintain such records as Lender may require,
   including without limitation information concerning Eligible Inventory and
   records itemizing and describing the kind, type, quality, and quantity of
   Inventory, Borrower's Inventory costs and selling prices, and the daily
   withdrawals and additions to inventory.  The following is an accurate and
   complete list of all locations at which Borrower keeps or maintains business
   records concerning Borrower's Accounts and Inventory:  Las Vegas, NV.

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

<PAGE>

   aging, within 20 days after the end of each month and formatted 90 days 
   from invoice date; monthly Borrower's Certificate, supported by Sales 
   Journal for additions to Accounts Receivable and for non-cash reductions 
   on Borrower's Certificate, and supported by Collection Report for 
   reductions to Accounts Receivable; annual complete debtor name and address 
   listing; monthly detailed listing of eligible Inventory, using last-cost 
   to calculate unit price for borrowing purposes.  In addition, Borrower 
   agrees to undergo no less than one collateral audit annually, to be 
   performed by Lender's internal staff or Lender-approved external 
   examiners. Direct verifications will be required.  Borrower agrees to pay 
   all Lender's expenses incurred in connection with each collateral audit.

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

MULTIPLE BORROWERS.  This Agreement has been executed by multiple obligors who
are referred to herein individually, collectively and interchangeably as
"Borrower."  Unless specifically stated to the contrary, the word "Borrower" as
used in this Agreement, including without limitation all representations,
warranties and covenants, shall include all Borrowers.  Borrower understands and
agrees that, with or without notice to Borrower, Lender may with respect to any
other Borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any security, with or without the
substitution of new collateral; (d) release, substitute, agree not to sue, or
deal with any one or more of Borrower's sureties, endorsers, or other guarantors
on any terms or in any manner Lender may choose; (e) determine how, when and
what application of payments and credits shall be made on any indebtedness;
(f) apply such security and direct the order or manner of sale thereof,
including without limitation, any nonjudicial sale permitted by the terms of the
controlling security agreement or deed of trust, as Lender in its discretion may
determine; (g) sell, transfer, assign, or grant participations in all or any
part of the indebtedness; (h) exercise or refrain from exercising any rights
against Borrower or others, or otherwise act or refrain from acting; (i) settle
or compromise any indebtedness; and (j) subordinate the payment of all or any
part of any indebtedness of Borrower to Lender to the payment of any liabilities
which may be due Lender or others .

REPRESENTATIONS AND WARRANTIES.  The reference to "Borrower" in this
"REPRESENTATIONS AND WARRANTIES" section of this Agreement means PDS FINANCIAL
CORPORATION only and does not apply to any other co-borrower.  Borrower
represents and warrants to Lender, as of the

<PAGE>

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

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

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

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

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

   HAZARDOUS SUBSTANCES.  The terms "hazardous waste," "hazardous substance,"
   "disposal," "release," and "threatened release," as used in this Agreement,
   shall have the same meanings as set forth in the "CERCLA," "SARA," the
   Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
   Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or
   other applicable state or Federal laws, rules, or regulations adopted
   pursuant to any of the foregoing.  Except as disclosed to and acknowledged
   by Lender in writing, Borrower represents and warrants that: (a) During the
   period of Borrower's ownership of the properties, there has been no use,
   generation, manufacture, storage, treatment, disposal, release or threatened
   release of any hazardous waste or substance by any person on, under, about
   or from any of the properties.  (b) Borrower has no knowledge of, or reason
   to believe that there has been (i) any use, generation, manufacture,
   storage, treatment, disposal, release, or threatened release of any
   hazardous waste or substance on, under, about or from the properties by any
   prior owners or occupants of any of the properties, or (ii) any actual or
   threatened litigation or claims of any kind by any person relating to such
   matters.  (c) Neither Borrower nor any tenant, contractor, agent or other
   authorized user of any of the properties shall use, generate, manufacture,
   store, treat, dispose of, or release any hazardous waste or substance on,
   under, about or from any of the properties; and any such activity shall be
   conducted in compliance with all applicable federal, state and local laws,
   regulations, and ordinances, including without limitation those laws,
   regulations and ordinances described above.  Borrower authorizes Lender and
   its agents to enter upon the properties to make such inspections and tests
   as Lender may deem appropriate to determine compliance of the properties
   with this section of the Agreement.  Any inspections or tests made by Lender
   shall be at Borrower's expense and for Lender's purposes only and shall not
   be construed to create any responsibility or liability on the part of Lender
   to Borrower or to any other person.

<PAGE>
 
                                                              Page 9

   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.

<PAGE>
                                                                    Page 10

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

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

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

   COMMERCIAL PURPOSES.  Borrower intends to use the Loan proceeds solely for
   business or commercial related purposes.

   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 6442 City West Parkway, Suite 300, Minneapolis, MN 
   55344.  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.  The reference to "Borrower" in this "AFFIRMATIVE
COVENANTS" section of this Agreement means PDS FINANCIAL CORPORATION only and
does not apply to any other co-borrower.  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.

<PAGE>
                                                                    Page 11

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

   FINANCIAL STATEMENTS.  Furnish Lender with, as soon as available, but in no
   event later than one hundred twenty (120) days after the end of each fiscal
   year, Borrower's balance sheet and income statement for the year ended,
   prepared by Borrower, and, as soon as available, but in no event later than
   fifty (50) days after the end of each fiscal quarter, Borrower's balance
   sheet and profit and loss statement for the period ended, prepared and
   certified as correct to the best knowledge and belief by Borrower's chief
   financial officer or other officer or person acceptable to Lender.  All
   financial reports required to be provided under this Agreement shall be
   prepared in accordance with generally accepted accounting principles,
   applied on a consistent basis, and certified by Borrower as being true and
   correct.

   ADDITIONAL INFORMATION.  Furnish such additional information and statements,
   list of assets and liabilities, agings of receivables and payables,
   inventory schedules, budgets, forecasts, tax returns, and other reports with
   respect to Borrower's financial condition and business operations as Lender
   may request rom time to time.

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

       NET WORTH RATIO.  Maintain a ratio of Total Liabilities to Tangible Net
       Worth of less than 7.00 to 1.00.

       CASH FLOW REQUIREMENTS.  Maintain Cash Flow at not less than the
       following level:  A RATIO OF 1.25 TO 1.00.  THIS IS THE RATIO OF NET
       INCOME PLUS DEPRECIATION AND AMORTIZATION PLUS INTEREST EXPENSE, DIVIDED
       BY INTEREST PLUS DIVIDENDS.

   The following provisions shall apply for purposes of determining compliance
   with the foregoing financial covenants and ratios:  DEBT WILL EXCLUDE
   NONRECOURSE DEBT AND SUBORDINATED DEBT.  Except as provided above, all
   computations made to determine compliance with the requirements contained in
   this paragraph shall be made in accordance with generally accepted
   accounting principles, applied on a consistent basis, and certified by
   Borrower as being true and correct.

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

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

<PAGE>
                                                                    Page 12

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

   TAXES, CHARGES AND LIENS.  Pay and discharge when due all of its
   indebtedness and obligations, including without limitation all assessments,
   taxes, governmental charges, levies and liens, of every kind and nature,
   imposed upon Borrower or its properties, income, or profits, prior to the
   date on which penalties would attach, and all lawful claims that, if unpaid,
   might become a lien or charge upon any of Borrowers 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,

<PAGE>
                                                                    Page 13

   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.

RECOVERY OF ADDITIONAL COSTS.  If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except U.S. federal, state or local income or franchise
taxes imposed on Lender), reserve requirements, capital adequacy requirements or
other obligations which would (a) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (b) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(c) reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Lender's written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error.

NEGATIVE COVENANTS.  The reference to "Borrower" in this "NEGATIVE COVENANTS"
section of this Agreement means PDS FINANCIAL CORPORATION only and does not
apply to any other co-borrower.   Borrower covenants and agrees with Lender that
while this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender:

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

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

   LOANS, ACQUISITIONS AND GUARANTIES.  (a) Loan, invest in or advance money or
   assets, (b) purchase, create or acquire any interest in any other enterprise
   or entity, or (c) incur any obligation as surely 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; 

<PAGE>
                                                                    Page 14

(c) there occurs a material adverse change in Borrower's financial condition, 
in the financial condition of any Guarantor, or in the value of any Collateral 
securing any Loan; (d) any Guarantor seeks, claims or otherwise attempts to 
limit, modify or revoke such Guarantor's guaranty of the Loan or any other 
loan with Lender; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

RIGHT OF SETOFF.  Borrower grants to Lender a contractual 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, and, at Lender's option, to administratively freeze
all such accounts to allow Lender to protect Lender's charge and setoff rights
provided on this paragraph.

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

   DEFAULT ON INDEBTEDNESS.  Failure of Borrower to make any payment when due
   on the Loans.

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

   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 creditor
   of any Grantor against any collateral securing the Indebtedness, or by any
   governmental agency.  This includes a garnishment, attachment, or levy on or
   of any of Borrower's deposit accounts with Lender.

   EVENTS AFFECTING GUARANTOR.  Any of the preceding events  occurs with
   respect to any Guarantor of any of the Indebtedness of any Guarantor dies or
   becomes incompetent, or revokes or disputes the validity of, or liability
   under, any Guaranty of the Indebtedness.

   EVENTS AFFECTING CO-BORROWERS.  Any of the preceding events occurs with
   respect to any co-borrower of any of the Indebtedness or any co-borrower
   dies or becomes incompetent, or revokes or disputes the validity of, or
   liability under, any of the Indebtedness.


<PAGE>
                                                                    Page 15

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

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

   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 and signed by the party
   or parties sought to be charged or bound by the alteration or amendment.

   APPLICABLE LAW.  This Agreement has been delivered to Lender and accepted by
   Lender in the State of Nevada.  If there is a lawsuit, Borrower agrees upon
   Lender's request to submit to the jurisdiction of the courts of Clark
   County, the State of Nevada (initial here _PDC/____).  Subject to the
   provisions on arbitration, this Agreement shall be governed by and construed
   in accordance with the laws of the State of Nevada.

   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.

<PAGE>
                                                                    Page 16

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

   MULTIPLE PARTIES; CORPORATE AUTHORITY.  All obligations of Borrower under
   this Agreement shall be joint and several, and all references to Borrower
   shall mean each and every Borrower.  This means that each of the persons
   signing below is responsible for ALL obligations in this Agreement.

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

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

   NOTICES.  All notices required to be given under this Agreement shall be
   given in writing, may be sent by telefacsimile, 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 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.

   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.

<PAGE>
                                                                    Page 17

   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.

<PAGE>
                                                                    Page 18

   EACH BORROWER ACKNOWLEDGES HAVING READ ALL OF THE PROVISIONS OF THIS LOAN
   AGREEMENT, AND EACH BORROWER AGREES TO ITS TERMS.  THIS AGREEMENT IS DATED
   AS OF AUGUST 5, 1998.


BORROWER:

PDS FINANCIAL CORPORATION

By:     /s/ Johan P. Finley
   ----------------------------------
   Johan P. Finley, President/C.E.O.



PDS FINANCIAL CORPORATION - NEVADA, Co-Borrower

By:    /s/ Johan P. Finley
   ----------------------------------
   Johan P. Finley, President/C.E.O.


LENDER:

U.S. BANK


By:
   ----------------------------------
   Authorized Officer