LOAN MODIFICATION AGREEMENT

      This Loan  Modification  Agreement  is entered  into as of  October  15,
2000, by and between Optika  Inc.,  formerly known as Optika Imaging Systems,
Inc. ("Borrower") and Silicon Valley Bank ("Bank").

1.   DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Loan and Security Agreement, dated October 15, 1998, as may be
amended from time to time, (the "Loan Agreement"). The Loan Agreement provided
for, among other things, a Committed Revolving Line in the original principal
amount of Three Million Dollars ($3,000,000). Defined terms used but not
otherwise defined herein shall have the same meanings as in the Loan Agreement.

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."

2.   DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement. Additionally,
Borrower has agreed with Bank not to mortgage, pledge, hypothecate or otherwise
encumber its Intellectual Property, pursuant to a Negative Pledge Agreement
dated October 15, 1998.

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".

3.    DESCRIPTION OF CHANGE IN TERMS.

      A.         Modification(s) to Loan Agreement.

            1.     Sub-section (ii) entitled "Tangible Net Worth" of Section 6.7
                   entitled "Financial Covenants" is hereby amended to read as
                   follows:

                  (ii)  Tangible  Net Worth.  A Tangible Net Worth of at least
                   $6,000,000.

            2.     Sub-section (iv) entitled "Profitability" of Section 6.7
                   entitled "Financial Covenants" is hereby deleted in its
                   entirety and replaced by the "Minimum Revenue" to read as
                   follows:

                  (iv) Minimum Revenue. Borrower will have a minimum revenue
                   equal to 75% of its plan as follows: $3,750,000 for the
                   quarter ended December 31, 2000; $4,250,000 for quarter
                   ending March 31, 2001; $5,000,000 for quarter ending June 30,
                   2001 and $5,500,000 for the quarter ending September 30,
                   2001.

            3.     The following defined term under Section 13.1 entitled
                  "Definitions" is hereby amended to read as follows:

                  "Revolving Maturity Date" is November 6, 2001.

      B.    Waiver of Financial Covenants

            1.    Bank hereby waives Borrower's existing default under the Loan
                  Agreement by virtue of Borrower's failure to comply with the
                  Minimum Revenue covenant as of quarter ended September 30,
                  2000. Bank's waiver of Borrower's compliance of this covenant
                  shall apply only to the foregoing period.

                  Bank's agreement to waive the above-described default (1) in
                  no way shall be deemed an agreement by the Bank to waive
                  Borrower's compliance with the above-described covenant as of
                  all other dates and (2) shall not limit or impair the Bank's
                  right to demand strict performance of this covenant as of all
                  other dates and (3) shall not limit or impair the Bank's right
                  to demand strict performance of all other covenants as of any
                  date.

4.    CONSISTENT  CHANGES.  The Existing  Loan  Documents  are hereby  amended
wherever necessary to reflect the changes described above.

5.    PAYMENT  OF LOAN FEE.  Borrower  shall pay Lender a fee in the amount of
Fifteen  Thousand  Dollars  ($15,000),  plus all  out-of-pocket  expenses (the
"Loan Fee").

6.    NO  DEFENSES  OF  BORROWER.  Borrower  (and each  guarantor  and pledgor
signing below) agrees that, as of the date hereof,  it has no defenses against
the obligations to pay any amounts under the Indebtedness.

7.    CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness, Bank
is relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Bank's agreement to modifications
to the existing Indebtedness pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Indebtedness. It is the intention of Bank and Borrower to retain as liable
parties all makers and endorsers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. No maker, endorser, or guarantor will be
released by virtue of this Loan Modification Agreement. The terms of this
paragraph apply not only to this Loan Modification Agreement, but also to all
subsequent loan modification agreements.

8.    CONDITIONS.  The  effectiveness of this Loan  Modification  Agreement is
conditioned upon payment of the Loan Fee.

      This Loan Modification Agreement is executed as of the date first written
above.

BORROWER:                                       BANK:

OPTIKA, INC                                     SILICON VALLEY BANK

By:                                             By:
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Name:                                           Name:
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Title:                                          Title:
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