DESCRIPTION - Credit Agreement between Wells Fargo Bank and Auto-Graphics, 
Inc. dated May 12, 1997. 

CREDIT AGREEMENT

THIS AGREEMENT is entered into as of May 12, 1997, by and between AUTO-
GRAPHICS, INC., a California corporation ("Borrower"), and WELLS FARGO 
BANK, NATIONAL ASSOCIATION ("Bank"). 

RECITAL 

Borrower has requested from Bank the credit accommodations described below 
(each, a "Credit" and collectively, the "Credits"), and Bank has agreed 
to provide the Credits to Borrower on the terms and conditions contained 
herein. NOW, THEREFORE, for valuable consideration, the receipt and 
sufficiency of which are hereby acknowledged, Bank and Borrower hereby 
agree as follows: 

ARTICLE I
THE CREDITS 

SECTION 1.1. LINE OF CREDIT. 
(a) Line of Credit. Subject to the terms and conditions of this Agreement, 
Bank hereby agrees to make advances to Borrower from time to time up to 
and including June 1, 1.999, not to exceed at any time the aggregate 
principal amount of One Million Two Hundred Fifty Thousand Dollars 
($1,250,000.00) ("Line of Credit"), the proceeds of which shall be used 
for working capital. Borrower's obligation to repay advances under the 
Line of Credit shall he evidenced by a promissory note substantially in 
the form of Exhibit A attached hereto ("Line of Credit Note"), all terms 
of which are incorporated herein by this reference. 

(b) Limitation on Borrowings. Outstanding borrowings under the Line of 
Credit, to a maximum of the principal amount set forth above, shall not at 
any time exceed an aggregate of the sum of eighty percent (80%) of the 
eligible accounts receivable of Borrower "Borrower's Borrowing Base") plus 
eighty percent (80%) of the eligible accounts receivable of A-G Canada 
Ltd., a Canadian corporation ("A-G Canada") which is a wholly-owned 
subsidiary of Borrower ("A-G Canada's Borrowing Base"). All of the 
foregoing shall be determined by Bank upon receipt and review of all 
collateral reports required hereunder and such other documents and 
collateral information as Bank may from time to time require. 

(i) Borrower's Borrowing Base. Borrower acknowledges that Borrower's 
Borrowing Base was established by Bank with the understanding that among 
other items, the aggregate of all returns, rebates, discounts, credits and 
allowances for the immediately preceding three (3) months at all times 
shall be less than five percent (5%) of Borrower's, gross sales for said 
period. If such dilution of Borrower's accounts for the immediately 
preceding three (3) months at any time exceeds five percent (5%) of 
Borrower's a gross sales for said period, or if there at any time exists 
any other matters, events, conditions or contingencies which Bank 
reasonably believes may affect payment of any portion of Borrower's 
accounts Bank, in its sole discretion, may reduce the foregoing advance 
rate against eligible accounts receivable to a percentage appropriate to 
reflect such dilution and/or establish additional reserves against 
Borrower's eligible accounts receivable. As used herein with respect to 
Borrower's Borrowing Base "eligible accounts receivable" shall consist 
solely of trade accounts created in the ordinary course of Borrower's 
business, upon which Borrower's right to receive payment is absolute and 
not contingent upon the fulfillment or any condition whatsoever, and in 
which Bank has a perfected security interest of first priority, and shall 
not include: 

(A) any account which is past due more than twice Borrower's, standard 
selling terms; 

(B) that portion of any account for which there exists any right of 
setoff, defense or discount (except regular discounts allowed in the 
ordinary course of business to promote prompt payment) or for which any 
defense or counterclaim has been asserted; 

(C) any account which represents an obligation of the United States 
government or any political subdivision thereof (except accounts which 
represent obligations of the United States government and for which Bank's 
forms N-138 and N-139 been duly executed and acknowledged); 

(D) any account which represents an obligation of an account debtor 
located in a foreign country other than an account debtor located in the 
Canadian provinces of Alberta, British Columbia, Manitoba, Ontario, 
Saskatchewan or the Yukon Territory so long as, in Bank's determination, 
such Canadian jurisdictions recognize Bank's first priority security 
interest in and right to collect such account as a consequence of any 
security agreements and UCC filings in favor of Bank, and other than an 
account debtor located in any other Canadian province where Bank has 
obtained a perfected security interest of first priority pursuant to the 
applicable laws of such province; 

(E) any account which arises from the sale or lease to or performance of 
services for, or represents an obligation of, an employee, affiliate, 
partner, member, parent or subsidiary of Borrower; 

(F) any account which represents an obligation of any account debtor when 
twenty-five percent (25%) or more of Borrower's accounts from such account 
debtor are not eligible pursuant to (A) above; 

(G) that portion of any account from an account debtor which represents 
the amount by which Borrower's total accounts from said account debtor 
exceeds twenty-five (25%) of Borrower's total accounts; 

(H) any account deemed ineligible by Bank when Bank, in its sole 
discretion, deems the creditworthiness or financial condition of the 
account debtor, or the industry in which the account debtor is engaged, to 
be unsatisfactory. 

(ii) A-G Canada's Borrowing Base. Borrower acknowledges that A-G Canada's 
Borrowing Base was established by Bank with the understanding that, among 
other items, the aggregate of all returns, rebates, discounts, credits and 
allowances for the immediately preceding three (3) months at all times 
shall be less than five percent (5%) of A-G Canada's gross sales for said 
period. If such dilution of A-G Canada's accounts for the immediately 
preceding three (3) months at any time exceeds five percent (5%) of A-G 
Canada's gross sales for said period, or if there at any time exists any 
other matters, events, conditions, or contingencies which Bank reasonably 
believes may affect payment of any portion of A-G Canada's accounts, Bank, 
in its sole discretion, may reduce the foregoing advance rate against 
eligible accounts receivable to a percentage appropriate to 
reflect such additional dilution and/or establish additional reserves 
against A-G Canada's eligible accounts receivable. As used herein with 
respect to A-G Canada's Borrowing Base, "eligible accounts receivable" 
shall consist solely of trade accounts created in the ordinary course of 
A-G Canada's business, upon which A-G Canada's right to receive payment is 
absolute and not contingent upon the fulfillment of any condition 
whatsoever, and in which Bank has a perfected security interest of first 
priority, and shall not include: 

(A) any account which is past due more than twice A-G Canada's standard 
selling terms; 

(B) that portion of any account for which there exists any right of 
setoff, defense or discount (except regular discounts allowed in the 
ordinary course of business to promote prompt payment) or for which any 
defense or counterclaim has been asserted; 

(C) any account which represents an obligation of an account debtor 
located in a country other than Canada; 

(D) any account which arises from the sale or lease to or performance of 
services for, or represents an obligation of, an employee, affiliate, 
partner, member, parent or subsidiary of A-G Canada; 

(E) any account which represents an obligation of any account debtor when 
twenty-five percent (25%) or more of A-G Canada's accounts from such 
account debtor are not eligible pursuant to (A) above; 

(F) that portion of any account from an account debtor which represents 
the amount by which A-G Canada's total accounts from said account debtor 
exceeds twenty-five percent (25%) of A-G Canada's total accounts; 

(G) any account deemed ineligible by Bank when Bank, in its sole 
discretion, deems the creditworthiness or financial condition of the 
account debtor, or the industry in which the account debtor is engaged, to 
be unsatisfactory. (c) Borrowing and Repayment. Borrower may from time to 
time during the term of the Line of Credit borrow, partially or wholly 
repay its outstanding borrowings, and reborrow, subject to all of the 
limitations, terms and conditions contained herein or in the Line of 
Credit Note; provided however, that the total outstanding borrowings under 
the Line of Credit shall not at any time exceed the maximum principal 
amount available thereunder, as set forth above. 

SECTION 1.2. EQUIPMENT LINE OF CREDIT. 
(a) Equipment Line of Credit. Subject to the terms and conditions of this 
Agreement, Bank hereby agrees to make advances to Borrower from time to 
time up to and including June 1, 1999, not to exceed at any time the 
aggregate principal amount of Three Million Dollars ($3,000,000.00) 
("Equipment Line of Credit"), the proceeds of which shall be used to 
finance the purchase and/or development of equipment and software. 
Borrower's obligation to repay advances under the Equipment Line of Credit 
shall be evidenced by a promissory note substantially in the form of 
Exhibit B attached hereto ("Equipment Line of Credit Note"), all terms of 
which are incorporated herein by this reference. 

(b) Limitation on Borrowings. Each request for an advance under the 
Equipment Line of Credit shall be accompanied by Borrower's written 
statement as to the use of the proceeds of such advance. Advances under 
the Equipment Line of Credit shall not exceed eighty percent (80-%) of the 
purchase price of equipment and software developed by a person or entity 
other than Borrower, and shall not exceed eighty percent (80%) of the 
development cost of equipment and software developed by Borrower, in each 
case as evidenced by the invoices and/or expense reports therefor. 
Moreover, the aggregate amount of all advances under the Equipment Line of 
Credit which are to be used to finance the development cost of equipment 
and software developed by Borrower shall not exceed One Million Dollars 
($1,000,000.00) during any given fiscal year. 

(c) Borrowing and Repayment. Borrower may from time to time during the 
term of the Equipment Line of Credit borrow, partially or wholly repay its 
outstanding borrowings, and reborrow, subject to all of the limitations, 
terms and conditions contained herein or in the Equipment Line of Credit 
Note; provided, however, that the total outstanding borrowings under the 
Equipment Line of Credit shall not at any time exceed the maximum 
principal amount available thereunder, as set forth above. 

(d) Option to Cancel and Amortize. Borrower shall have a one-time option 
during the term of the Equipment Line of Credit to cancel the Equipment 
Line of Credit and to amortize the principal balance then outstanding over 
a period of five (5) years, to be repaid in sixty (60) equal monthly 
installments, as set forth in the promissory note to be executed by 
Borrower upon the exercise of the option. Borrower may exercise this 
option at anytime during the term of the Equipment Line of Credit upon 
sending written notice thereof to Bank; provided, however, Borrower may 
not exercise this option if an Event of Default, or an event or 
act which with the giving of notice or the passage or time or both would 
constitute an Event of Default, has occurred and is continuing. 

SECTION 1.3. TERM LOAN. 
(a) Term Loan. Subject to the terms and conditions of this Agreement, Bank 
hereby agrees to make a loan to Borrower in the principal amount of Seven 
Hundred Fifty Thousand Dollars ($750,0OO.00) ("Term Loan"), the proceeds 
of which shall be used by Borrower and/or contributed by Borrower to A-G 
Canada to finance the acquisition (the "ISM Acquisition") by Borrower 
and/or by A-G Canada of the assets of ISM Information Systems Management 
Manitoba Corporation pursuant to the terms of that certain Asset Purchase 
Agreement between A-G Canada and ISM Information Systems Management 
Manitoba Corporation to be dated as of June 1 1997 (the "Purchase 
Agreement"). Borrower's obligation to repay the Term Loan shall be 
evidenced by a promissory note substantially in the form of Exhibit C 
attached hereto ("Term Note"), all terms of which are incorporated herein 
by this reference. Bank's commitment to grant the Term Loan shall 
terminate on June 30, 1997. 

(c) Repayment. The principal amount of the Term Loan shall be repaid in 
accordance with the provisions of the Term Note. 

(d) Prepayment. Borrower may prepay principal on the Term Loan at any 
time, in any amount and without penalty. 

SECTION 1.4 INTEREST/FEES. 
(a) Interest. The outstanding principal balances of the Line of Credit, 
Equipment Line of Credit and the Term Loan shall bear interest at the 
rates of interest set forth in the Line of Credit Note, Equipment Line of 
Credit Note, and the Term Note (collectively, the "Notes"). 

(b) Computation and Payment. Interest shall be computed on the basis of a 
360-day year, actual days elapsed. Interest shall be payable at the times 
and place set forth in the Notes. 

(c) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to one-
eighth percent (1/8%) per annum (computed on the basis of a 360 day year, 
actual days elapsed) on the average daily unused amount of the Line of 
Credit, which fee shall be calculated on a quarterly basis by Bank and 
shall be due and payable by Borrower in arrears within ten (10) days after 
each billing is sent by Bank. 

SECTION 1.5 COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect 
all principal, interest and fees due under each Credit by charging 
Borrower's demand deposit account with Bank, or any other demand deposit 
account maintained by Borrower with Bank, for the full amount thereof. 
Should there be insufficient funds in any such demand deposit account to 
pay all such sums when due, the full amount of such deficiency shall be 
immediately due and payable by Borrower. 

SECTION 1.6. COLLATERATAL. As security for all indebtedness of Borrower to 
Bank subject hereto, Borrower hereby grants to Bank security interests of 
first priority in all Borrower's accounts receivable and other rights to 
payment, general intangibles, inventory, equipment and all proceeds of the 
foregoing. As security for all indebtedness of Borrower to Bank subject 
hereto, on or before June 30, 1997, Borrower shall cause A-G Canada to 
grant to Bank security interests of first priority in all of A-G Canada's 
accounts receivable and other rights to payment, general intangibles, 
inventory, equipment and all proceeds of the foregoing. All of the 
foregoing shall be evidenced by and subject to the terms of such security 
agreements, financing statements and other documents as Bank shall 
reasonably require, all in form and substance satisfactory to Bank. 
Borrower shall reimburse Bank immediately upon demand for all costs and 
expenses incurred by Bank in connection with any of the foregoing 
security, including without limitation, filing and recording fees and 
costs of appraisals and audits. 

SECTION l.7. GUARRANTIES. All indebtedness of Borrower to Bank under the 
Term Loan shall be guaranteed by Robert S. Cope in the principal amount of 
Seven Hundred Fifty Thousand Dollars ($750,000.00), as evidenced by and 
subject to the terms of a guaranty in form and substance satisfactory to 
Bank. 

ARTICLE II 

REPRESENTATIONS AND WARRANTIES 

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

SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized and 
existing and in good standing under the laws of the state of California, 
and is qualified or licensed to do business (and is in good standing as a 
foreign corporation, if applicable) in jurisdictions in which such 
Qualification or licensing is required or in which the failure to so 
qualify or to be so licensed could have a material adverse effect on 
Borrower. 

SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement, the Notes, and 
each other document, contract and instrument required hereby or at any 
time hereafter delivered to Bank in  connection herewith (collectively, 
the "Loan Documents") have been duly authorized, and upon their execution 
and delivery in accordance with the provisions hereof will constitute 
legal, valid and binding agreements and obligations of Borrower or the 
party which executes the same, enforceable in accordance with their 
respective terms. 

SECTION 2.3. NO VIOLATION. The execution, delivery and performance by 
Borrower of each of the Loan Documents do not violate any provision of any 
law or regulation, or contravene any provision of the Articles of 
Incorporation or By-Laws of Borrower, or result in any breach of or 
default under any contract, obligation, indenture or other instrument to 
which Borrower is a party or by which Borrower may be bound. 

SECTION 2.4. LITIGATION. There are no pending, or to the best of 
Borrower's knowledge threatened, actions, claims, investigations, suits or 
proceedings by or before any governmental authority, arbitrator, court or 
administrative agency which could have a material, adverse effect on the 
financial condition or operation of Borrower other than those disclosed by 
Borrower to Bank in writing prior to the date hereof.   

SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT.  The financial statement 
of  Borrower dated March 31, 1997, a true copy of which has beer, 
delivered by Borrower to Bank prior to the date hereof, (a) is complete 
and correct and presents fairly the financial condition of Borrower, (b) 
discloses all liabilities of Borrower that are required to be reflected or 
reserved against under generally accepted accounting principles, whether 
liquidated or unliquidated, fixed or contingent, and (c) has been prepared 
in accordance with generally accepted accounting principles consistently 
applied. Since the date of such financial statement -there has been no 
material adverse change in the financial condition of Borrower, nor has 
Borrower mortgaged, pledged, granted a security interest in or otherwise 
encumbered any of its assets or properties except in favor of Bank or as 
otherwise permitted by Bank in writing. 

SECTION 2.6. INCOME TAX.RETURNS. Borrower has no knowledge of any pending 
assessments or adjustments of its income tax payable with respect to any 
year. 

SECTION 2.7. NO SUBORDINATION. There is no agreement indenture, contract 
or instrument to which Borrower is a party or by which Borrower is a party 
or by which Borrower may be bound that requires the subordination in right 
of payment of any of Borrower's obligations subject to this Agreement to 
any obligation of Borrower. 

SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter 
possess, all permits, consents, approvals, franchises and licenses 
required and rights to all trademarks, trade names, patents, and 
fictitious names, if any, necessary to enable it to conduct the business 
in which it is now engaged in compliance with applicable law. 

SECTION 2.9. ERISA. Borrower is in compliance in all material respects 
with all applicable provisions of the Employee Retirement Income Security 
Act of 1974, as amended or remodified from time to time ("ERISA"); 
Borrower has not violated any provision of any defined employee pension 
benefit plan (as defined in ERISA) maintained or contributed to by 
Borrower (each, a "Plan"); no Reportable Event as defined in ERISA has 
occurred and is continuing with respect to any Plan initiated by Borrower; 
Borrower has met its minimum funding requirements under ERISA with respect 
to each Plan; and each Plan will be able to fulfill its benefit 
obligations as they come due in accordance with the Plan documents and 
under generally accepted accounting principles. 

SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any 
obligation for borrowed money, any purchase money obligation or any other 
material lease, commitment, contract, instrument or obligation. 

SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to 
Bank in writing prior to the date hereof, Borrower is in compliance in all 
material respects with all applicable federal or state environmental, 
hazardous waste, health-and safety statutes, and; any rules or regulations 
adopted pursuant thereto, which govern or affect any of Borrower's 
operations and/or properties, including without limitation, the 
Comprehensive Environmental Response, Compensation and Liability Act of 
1980, the Superfund Amendments and Reauthorization Act of 1986, the 
Federal Resource Conservation and Recovery Act of 1976, and the Federal 
Toxic Substances Control Act, as any of the same may be amended, modified 
or supplemented from time to time. None of the operations of Borrower is 
the subject of any federal or state investigation evaluating whether any 
remedial action involving a material expenditure is needed to respond to a 
release of any toxic or hazardous waste or substance into the environment. 
Borrower has no material contingent liability in connection with any 
release of any toxic or hazardous waste or substance into the environment. 

ARTICLE III 

CONDITIONS 

SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of 
Bank to grant any of the Credits is subject to the fulfillment to Bank's 
satisfaction of all of the following conditions: (a) Approval of Bank 
Counsel. All legal matters incidental to the granting of each of the 
Credits shall be satisfactory to Bank's counsel. (b) Documentation. Bank 
shall have received, in form and substance satisfactory to Bank, each of 
the following, duly executed: (i) This Agreement and the Notes. (ii) 
Articles of Incorporation. (iii) Corporate Borrowing Resolution. (iv) 
Incumbency Certificate. (v) Security Agreement covering Equipment. (vi) 
Security Agreement covering Account Receivable and Inventory. (vii) UCC 
Financing Statement. (viii) Guaranty (ix) Such other documents as Bank may 
require under any other Section of this Agreement. And by June 30, 1977, 
Bank shall have received, in form and substance satisfactory to Bank, each 
of the following, duly executed: (x) Third Party Security Agreement: All 
Accounts, Inventory, Equipment and Fixtures. (xi) Financing Statement or 
such other filings as may be required under Canadian law. (xii) Corporate 
Resolution authorizing endorsement and hypothecation of property. (xiii) 
Incumbency Certificate. (xiv) Such other documents as Bank may require 
under any other Section of this Agreement. (c) Financial Condition. There 
shall have been no material adverse change, as determined by Bank, in the 
financial condition or business of Borrower or any guarantor hereunder, 
nor any material decline, as determined by Bank, in the market value of 
any collateral required hereunder or a substantial or material portion of 
the assets of Borrower or any such guarantor. (d) Insurance. Borrower 
shall have delivered to Bank evidence of insurance coverage on all 
Borrower's property, in form, substance, amounts, covering risks and 
issued by companies satisfactory to Bank, and where required by Bank, with 
loss payable endorsement in favor of Bank, including without limitation, 
policies of fire and extended coverage insurance covering all real 
property collateral required hereby, with replacement cost and mortgagee 
loss payable endorsements, and such policies of insurance against specific 
hazards affecting any such real property as may be required by 
governmental regulation or Bank. 

SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of 
Bank to make each extension of credit requested by Borrower hereunder 
shall be subject to the fulfillment to Bank's satisfaction of each of the 
following conditions: (a) Compliance. The representations and warranties 
contained herein and in each of the other Loan Documents shall be true on 
and as of the date of the signing of this Agreement and on the date of 
each extension of credit by Bank pursuant hereto, with the same as though 
such representations and warranties had been made on and as of each such 
date, and on each such date, no Event of Default as defined herein, and no 
condition, event or act which with the giving of notice or the passage of 
time or both would constitute such an Event of Default, shall have 
occurred and be continuing or shall exist. (b) Documentation. Bank shall 
have received all additional documents which may be required in connection 
with such extension of credit. 

SECTION 3.3. SPECIAL CONDITION TO TERM LOAN. The obligation of Bank to 
make the Term Loan shall be subject to receipt by Bank of such assurances 
and/or evidence as Bank may require that concurrently with or prior to the 
funding of the Term Loan, the ISM Acquisition shall be or shall have been 
completed in compliance with all applicable laws, and that Borrower and/or 
A-G Canada shall acquire or shall have acquired the assets described in 
the Purchase Agreement free from any liens or claims of any person or 
entity except for "Permitted Encumbrances" as defined in the Purchase 
Agreement. 

ARTICLE IV 

AFFIRMATIVE COVENANTS 

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

SECTION 4.1. PUNCTUAL PAYMENTS Punctually pay all principal, interest, 
fees or other liability ties due under any of the Loan Documents at the 
times and place and in the manner specified therein, and immediately upon 
demand by Bank, the amount by which the outstanding principal balance of 
any of the Credits at any time 
exceeds any limitation on borrowings applicable thereto. 

SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in 
accordance with generally accepted accounting principles consistently 
applied, and permit any representative of Bank, at any reasonable time, to 
inspect, audit and examine such books and records, to make copies of the 
same, and to inspect the properties of Borrower. 

SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, 
in form and detail satisfactory to Bank: (a) not later than 120 days after 
and as of the end of each fiscal year, a audited consolidated financial 
statement of Borrower, prepared by an certified public accountant 
acceptable to Bank, to include a balance sheet, income statement and 
statement of cash flow and all footnotes; (b) not later than 45 days after 
and as of the end of each fiscal quarter, a consolidated financial 
statement of Borrower, prepared by Borrower, to include a balance sheet 
and income statement; (c) not later than 20 days after and as of the end 
of each month, a borrowing base certificate of Borrower and A-G 
Canada, an aged listing of accounts receivable and accounts payable of 
Borrower and of A-G Canada, a reconciliation of accounts of Borrower and 
A-G Canada, and by March 31 of each year, a list of the names and 
addresses of Borrower's and A-G Canada's account debtors; (d) not later 
than 90 days after the end of each calendar year, a financial statement of 
each guarantor hereunder, prepared by such guarantor, to include all 
assets and liabilities, and within 15 days filing, but in no event later 
than each April 30th, copies of guarantor's filed federal income tax 
returns for such year; (e) from time to time such other 
information as Bank may reasonably request. 

SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits, 
governmental approvals, rights, privileges and franchises necessary for 
the conduct of its business; and comply with the provisions all documents 
pursuant to which Borrower is organized and/or which govern Borrower's 
continued existence and with the requirements of all laws, rules, 
regulations and orders of any governmental authority applicable to 
Borrower and/or its business. 

SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the types 
and in amounts customarily carried in lines of business similar to that of 
Borrower, including but not limited to fire, extended coverage, public 
liability, flood, property damage and workers' compensation, with all such 
insurance carried with companies and in amounts satisfactory to Bank, and 
deliver to Bank from time to time at Bank's request schedules setting 
forth all insurance then in effect. 

SECTION 4.6. FACILITIES. Keep all properties useful or necessary to 
Borrower's business in good repair and condition, and from time to time 
make necessary repairs, renewals and replacements thereto so that such 
properties shall be fully and efficiently preserved and maintained. 

SECTION 4.7. LITIGATION. Promptly give notice in writing to Bank of any 
litigation pending or threatened against Borrower with a claim in excess 
of $100,000.00. SECTION 4.8. FINANCIAL CONDITION. Maintain Borrower's 
consolidated financial condition as follows using generally accepted 
accounting principles consistently applied and used consistently with 
prior practices (except to the extent modified by the definitions herein), 
with compliance determined commencing with Borrower's financial statements 
for the period ending June 30, 1997: (a) Current Ratio not at any time 
less than 1.10 to 1.0, with "Current Ratio" defined as total current 
assets divided by total current liabilities. (b) Tangible Net Worth not at 
any time less than $2,500,000.00, with "Tangible Net Worth" defined as the 
aggregate of total stockholders' equity plus subordinated debt less any 
intangible assets. (c) Total Liabilities divided by Tangible Net Worth not 
at any time greater than 2.25 to 1.0, with "Total Liabilities" defined as 
the aggregate of current liabilities and non-current liabilities less 
subordinated debt, and with "Tangible Net Worth" defined as the aggregate 
of total stockholders' equity plus subordinated debt less any intangible 
assets. (d) EBITDA Coverage Ratio not less than 2. 0 to 1. 0 as of each 
fiscal year end and as of the end of each fiscal quarter, on a rolling 
four-quarter basis, with "EBITDA" defined as net profit before tax plus 
interest expenses (net of capitalized interest expense), depreciation 
expense and amortization expense, and with "EBITDA Coverage Ratio"' 
defined as EBITDA divided by the aggregate of total interest expense plus 
the prior period current maturity of long-term debt and the prior period 
current maturity of subordinated debt. (e) Net income after taxes not less 
than $1.00 on an annual basis, determined as of each fiscal year end, and 
pre-tax profit not less than $1.00 on a quarterly basis, determined as of 
each fiscal quarter end. 

SECTION 4.9. NOTICE TO BANK. Promptly (but in no event more than five (5) 
days after the occurrence of each such event or matter) give written 
notice to Bank in reasonable detail of: (a) the occurrence of any Event of 
Default, or any condition, event or act which with the giving of notice or 
the passage of time or both would constitute an Event of Default; (b) any 
change in the name or organizational structure of Borrower; (c) the 
occurrence and nature of any Reportable Event or Prohibited Transaction, 
each as defined in ERISA, or any funding deficiency with respect to any, 
Plan; or (d) any termination or cancellation of any insurance policy which 
Borrower is required to maintain, or any uninsured or partially uninsured 
loss through liability or property damage, or through fire, theft or any 
other cause affecting Borrower's property in excess of an aggregate of 
$100,000.00. 

ARTICLE V 

NEGATIVE COVENANTS 

Borrower covenants that so long as Bank remains committed to extend credit 
to Borrower pursuant hereto, or any liabilities (whether direct or 
contingent, liquidated or unliquidated) of Borrower to Bank under any of 
the Loan Documents remain outstanding, and until payment in full of all 
obligations of Borrower subject hereto, Borrower will not without Bank's , 
prior or written consent: 

SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any of the Credits 
except for the purposes stated in Article I hereof. 

SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in fixed 
assets in any fiscal year in excess of an aggregate of $2,000,000.00 
(excluding U.S.$1,000,000.00 of the purchase price of the ISM 
Acquisition). 

SECTION 5.3. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist 
any indebtedness or liabilities resulting from borrowings, loans or 
advances, whether secured or unsecured, matured or unmatured, liquidated 
or unliquidated, joint or several, except (a) the liabilities of Borrower 
to Bank, and (b) any other liabilities of Borrower existing as of, and 
disclosed to Bank prior to, the date hereof. 

SECTION 5.4. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or 
consolidate with any other entity; make any substantial change in the 
nature of Borrower's business as conducted as of the date hereof; acquire 
all or substantially all of the assets of any other entity; nor sell, 
lease, transfer or otherwise dispose of all or a substantial or material 
portion of Borrower's assets except in the ordinary course of its 
business. 

SECTION 5.5. GUARANTIES. Guarantee or become liable in any way as surety, 
endorser (other than as endorser or negotiable instruments for deposit or 
collection in the ordinary course of business), accommodation endorser or 
otherwise for, nor pledge or hypothecate any assets of Borrower as 
security for, any liabilities or obligations or any other person or 
entity, except any of the foregoing in favor of Bank. 

SECTION 5.6. LOANS, ADVANCES, investmentS. Make any loans or advances to 
or investments in any person or entity, except any of the foregoing 
existing as of, and disclosed to Bank prior to, the date hereof. 

SECTION 5.7. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or 
distribution either in cash, stock or any other property on Borrower's 
stock now or hereafter outstanding, nor redeem, retire, repurchase or 
otherwise acquire any shares of any class of Borrower's stock now or 
hereafter outstanding; provided, however, Borrower may repurchase its 
common stock for a purchase price not to exceed $100,000.00 in the 
aggregate during any given year, so long as no other term or provision of 
this Agreement would be violated after giving effect to any such 
repurchase. 

SECTION 5.8. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist 
a security interest in, or lien upon, all or any portion of Borrower's 
assets now owned or hereafter acquired, except any of foregoing in favor 
of Bank or which is existing as of, and disclosed to Bank in writing prior 
to, the date hereof. 

ARTICLE VI 

EVENTS OF DEFAULT 

SECTION 6.1. The occurrence of any of the following shall constitute an 
"Event of Default" under this Agreement: (a) Borrower shall fail to pay 
when due any principal, interest, fees or other amounts payable under any 
or the Loan Documents. (b) Any financial statement or certificate 
furnished to Bank in connection with, or any representation or warranty 
made by Borrower or any other party under this Agreement or any other Loan 
Document shall prove to be incorrect, false or misleading in any material 
respect when furnished or made. (c) Any default in the performance of or 
compliance with any obligation, agreement or other provision contained 
herein or in any other Loan Document (other than those referred to in 
subsections (a) and (b) above), and with respect to any such default which 
by its nature can be cured, such default shall continue for a period of 
twenty (20) days from its occurrence. (d) Any default in the payment or 
performance of any obligation, or any defined event of default, under the 
terms of any contract or instrument (other than any of the Loan Documents) 
pursuant to which Borrower or any guarantor hereunder has incurred any 
debt or other liability to any person or entity, including Bank. (e) The 
filing of a notice of judgment lien against Borrower or any guarantor 
hereunder; or the recording or any abstract of judgment against Borrower 
or any guarantor hereunder in any county in which Borrower or such 
guarantor has an interest in real property; or the service of a notice of 
levy and/or of a writ of attachment or execution, or other like process, 
against the assets of Borrower or any guarantor hereunder; or the entry of 
a judgment against Borrower or any guarantor hereunder. (f) Borrower or 
any guarantor hereunder shall become insolvent, or shall suffer or consent 
to or apply for the appointment of a receiver, trustee, custodian or 
liquidator of itself or any of its property, or shall generally fail to 
pay its debts as they become due, or shall make a general assignment for 
the benefit of creditors; Borrower or any guarantor hereunder shall file a 
voluntary petition in bankruptcy, or seeking reorganization, in order to 
effect a plan or other arrangement with creditors or any other relief 
under the Bankruptcy Reform Act, Title 11 of the United States Code, as 
amended or recodified from time to time ("Bankruptcy Code"), or under 
state or federal law granting relief to debtors, whether now or hereafter 
in effect; or any involuntary petition or proceeding pursuant to the 
Bankruptcy Code or any other applicable state or federal law relating to 
bankruptcy, reorganization or other relief for debtors is filed or 
commenced against Borrower or any guarantor hereunder, or Borrower or any 
such guarantor shall file an answer admitting the jurisdiction of the 
court and the material allegations of any involuntary petition; or 
Borrower or any such guarantor shall be adjudicated a bankrupt, or an 
order for relief shall be entered against Borrower or any such guarantor 
by any court of competent jurisdiction under the Bankruptcy Code or any 
other applicable state or federal law relating to bankruptcy, 
reorganization or other relief for debtors. (g) There shall exist or occur 
any event or condition which Bank in good faith believes impairs, or is 
substantially likely to impair, the prospect of payment or performance by 
Borrower of its obligations under any of the Loan Documents. (h) The death 
or incapacity of any guarantor hereunder. The dissolution or liquidation 
or Borrower; or Borrower or any of its directors, stockholders or members 
shall take action seeking to effect the dissolution or liquidation of 
Borrower. (i) Any change in ownership during the term of this Agreement of 
an aggregate of twenty-five percent (25%) or more of the common stock of 
Borrower. 

SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a) 
all indebtedness of Borrower under each of the Loan Documents, any term 
thereof to the contrary notwithstanding, shall at Bank's option and 
without notice become immediately due and payable without presentment, 
demand, protest or notice of dishonor, all of which are hereby expressly 
waived by each Borrower; (b) the obligation, if any, of Bank to extend any 
further credit under any of the Loan Documents shall immediately cease and 
terminate; and (c) Bank shall have all rights, powers and remedies 
available under each of the Loan Documents, or accorded by law, including 
without limitation the right to resort to any or all security for any of 
the Credits and to exercise any or all of the rights of a beneficiary or 
secured party pursuant to applicable law. All rights, powers and remedies 
of Bank may be exercised at any time by Bank and from time to time after 
the occurrence of an Event of Default, are cumulative and not exclusive, 
and shall be in addition to any other rights, powers or remedies provided 
by law or equity. 

ARTICLE VII 

MISCELLANEOUS 

SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in 
exercising any right, power or remedy under any of the Loan Documents 
shall affect or operate as a waiver of such right, power or remedy; nor 
shall any single or partial exercise of any such right, power or remedy 
preclude, waive or other wise affect any other or further exercise thereof 
or exercise of any other right, power or remedy. Any waiver, permit, 
consent or approval of any kind by Bank of any breach of or default under 
of the Loan Documents must be in writing and shall be effective only to 
the extent set forth in such writing. 

SECTION 7.2. NOTICES. All notices, requests and demands which any party is 
required or may desire to give to any other party under any Provision of 
this Agreement must be in writing delivered to each party at the following 
address: BORROWER: AUTO-GRAPHICS, INC. 3201 Temple Avenue Pomona, 
California 91768 BANK: WELLS FARGO BANK, NATIONAL ASSOCIATION Regional 
Commercial Banking Office 9000 Flair Drive, Suite 100 El Monte, CA 91731 
or to such other address as any party may designate by written notice to 
all other parties. Each such notice, request and demand shall be deemed 
given or made as follows: (a) if sent by hand delivery, upon delivery; (b) 
if sent by mail, upon the earlier of the date of receipt or three (3) days 
after deposit in the U.S. mail, first class and postage prepaid; and (c) 
if sent by telecopy, upon receipt. 

SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to 
Bank immediately upon demand the full amount of all- advances, charges, 
costs and expenses, including reasonable attorneys' fees (to include 
outside counsel fees and all allocated costs of Bank's in house counsel), 
expended or incurred by Bank in connection with (a) the negotiation and 
preparation of this Agreement and the other Loan Documents, Bank's 
continued administration hereof and thereof, and the preparation of any 
amendments and waivers hereto and thereto, (b) the enforcement of Bank's 
rights and/or the collection of any amounts which become due to Bank under 
any of the Loan Documents, and (c) the prosecution or defense of any 
action in any way related to any of the Loan Documents, including without 
limitation, any action for declaratory relief, whether incurred at the 
trial or appellate level, in an arbitration proceeding or otherwise, and 
including any of the foregoing incurred in connection with any bankruptcy 
proceeding (including without limitation, any adversary proceeding, 
contested matter or motion brought by Bank or any other person) relating 
to any Borrower or any other person or entity. 

SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon 
and inure to the benefit of the heirs, executors, administrators, legal 
representatives, successors and assigns of the parties; provided however, 
that Borrower may not assign or transfer its interest hereunder without 
Bank's prior written consent. Bank reserves the right to sell, assign, 
transfer, negotiate or grant participation's in all or any part of, or any 
interest in, Bank's rights and benefits under each of the Loan Documents. 
In connection therewith, Bank may disclose all documents and information 
which Bank now has or may hereafter acquire relating to any of the 
Credits, Borrower or its business, any guarantor hereunder or the business 
of such guarantor, or any collateral required hereunder. 

SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other 
Loan Documents constitute the entire agreement between Borrower and Bank 
with respect to the Credits and supersede all prior negotiations, 
communications, discussions and correspondence concerning the subject 
matter hereof. This Agreement may be amended or modified only in writing 
signed by each party hereto. 

SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and 
entered into for the sole protection and benefit of the parties hereto and 
their respective permitted successors and assigns, and no other person or 
entity shall be a third party beneficiary of, or have any direct or 
indirect cause of action or claim in connection with, this Agreement or 
any other of the Loan Documents to which it is not a party. 

SECTION 7.7. TIME. Time is of the essence of each and every provision of 
this Agreement and each other of the Loan Documents. 

SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this 
Agreement shall be prohibited by or invalid under applicable law, such 
provision shall be ineffective only to the extent of such Prohibition or 
invalidity without invalidating the remainder of such provision or any 
remaining provisions of this Agreement. 

SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of 
counterparts, each of which when executed and delivered shall be deemed to 
be an original, and all of which when taken together shall constitute one 
and the same Agreement. 

SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and 
construed in accordance with the laws of the State of California. 

SECTION 7.11. ARBITRATION. 

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

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

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

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

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

(f ) Real Property Collateral; Judicial Reference. Notwithstanding 
anything herein to the contrary, no Dispute shall be submitted to 
arbitration if the Dispute concerns indebtedness secured directly or 
indirectly, in whole or in part, by any real property unless (i) the 
holder of the mortgage, lien or security interest specifically elects in 
writing to proceed with the arbitration, or (ii) all parties to the 
arbitration waive any rights or benefits that might accrue to them by 
virtue of the single action rule statute of California, thereby agreeing 
that all indebtedness and obligations of the parties, and all mortgages, 
liens and security interests securing such indebtedness and obligations, 
shall remain fully valid and enforceable. If any such Dispute is not 
submitted to arbitration, the Dispute shall be referred to a referee in 
accordance with California Code of Civil Procedure Section 638 et seq., 
and this general reference agreement is intended to be specifically 
enforceable in accordance with said Section 638. A  referee with the 
qualifications required herein for arbitrators shall be selected pursuant 
to the AAA's selection procedures. Judgment upon the decision rendered by 
a referee shall be entered in the court in which such proceeding was 
commenced in accordance with California Code of Civil Procedure Sections 
644 and 645. 

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
executed as of the day and year first written above. 

                                              WELLS FARGO BANK, 
AUTO-GRAPHICS, INC.                           NATIONAL ASSOCIATION 
By: Ss/Robert S. Cope                         By Ss/Kirk C. Smith
By: Robert S. Cope                            By: Kirk C. Smith 
Title: President                              Title: Vice President