<PAGE>   1
                                                                   EXHIBIT 10.18

                                PROMISSORY NOTE

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Borrower:  BOREALIS TECHNOLOGY CORPORATION        Lender:  Silicon Valley Bank
           4070 Silver Sage Drive                          3003 Tasman Drive
           Carson City, NV 89701                           Santa Clara, CA 95054

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Principal Amount: $250,000.00     Initial Rate: 10.250%
                                                     Date of Note: July 15, 1997

PROMISE TO PAY. BOREALIS TECHNOLOGY CORPORATION ("Borrower") promises to pay to
Silicon Valley Bank ("Lender"), or order, in lawful money of the United States
of America, the principal amount of Two Hundred Fifty Thousand & 00/100 Dollars
($250,000.00) or so much as may be outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on July 14, 1998. In addition, Borrower will
pay regular monthly payments of accrued unpaid interest beginning August 14,
1997, and all subsequent interest payments are due on the same day of each month
after that. Interest on this Note is computed on a 365/360 simple interest
basis; that is, by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding. Borrower will pay
Lender at Lender's address shown above or at such other place as Lender may
designate in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and late charges.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an Index which is Lender's Prime Rate (the
"Index"). This is the rate Lender charges, or would charge, on 90-day unsecured
loans to the most creditworthy corporate customers. This rate may or may not be
the lowest rate available from Lender at any given time. Lender will tell
Borrower the current Index rate upon Borrower's request. Borrower understands
that Lender may make loans on other rates as well. The interest rate change will
not occur more often than each time the prime rate is adjusted by Silicon Valley
Bank. The Index currently is 8.500% per annum. The interest rate to be applied
to the unpaid principal balance of this Note will be at a rate of 1.750
percentage points over the Index, resulting in an initial rate of 10.250% per
annum. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay
without penalty all or a portion of the amount owed earlier than it is due.
Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments of accrued
unpaid interest. Rather, they will reduce the principal balance due.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults 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 ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this note. (h) A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the indebtedness is impaired.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon Borrower's failure to pay
all amounts declared due pursuant to this section, including failure to pay
upon final maturity, Lender, at its option, may also, if permitted under
applicable law, do one or both of the following: (a) increase the variable
interest rate on this Note to 6.750 percentage points over the Index, and (b)
add any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the rate provided in this Note (including any
increased rate). Lender may hire or pay someone else to help collect this Note
if Borrower does not pay. Borrower also will pay Lender 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 and legal expenses 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. This Note has been
delivered to Lender and accepted by Lender in the State of California. If there
is a lawsuit, Borrower agrees upon Lender's request to submit to the
jurisdiction of the courts of Santa Clara County, the State of California.
Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the
other. (Initial Here _______) This Note shall be governed by and construed in
accordance with the laws of the State of California.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note, as well as directions for payment from Borrower's accounts, may be
requested orally or in writing by Borrower or by an authorized person. Lender
may, but need not, require that all oral requests be confirmed in writing.
Borrower agrees to be liable for all sums either: (a) advanced in accordance
with the instructions of an authorized person or (b) credited to any of
Borrower's accounts with Lender. The unpaid principal balance owing on this Note
at any time may be evidenced by endorsements on this Note or by Lender's
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this note if: (a) Borrower or any guarantor is
in default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business or is
insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
lender; or (d) Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender.

REQUEST TO PAY ACCOUNTS. Borrower will regularly deposit funds received from its
business activities in accounts maintained by Borrower at Silicon Valley Bank.
Borrower hereby requests and authorizes Lender to debit any of Borrower's
accounts with Lender, specifically, without limitation, Account Number
____________, for payments of principal and interest due on the loan and any
other obligations owing by Borrower to Lender. Lender will notify Borrower of
all debits which Lender makes against Borrower's accounts. Any such debits
against Borrower's accounts in no way shall be deemed a set-off.

BUSINESS LOAN AGREEMENT. This Note is subject to and shall be governed by all
the terms and conditions of the Business Loan Agreement of even date herewith,
between Lender and Borrower, as such agreement may be amended from time to
time, which Business Loan Agreement is incorporated herein by reference.

PAYMENT OF LOAN FEE. This Note is subject to a loan fee in the amount of Two
Thousand Five Hundred and 00/100 Dollars ($2,500.00) plus all 
<PAGE>   2
07-15-1997                      PROMISSORY NOTE                           PAGE 2
                                  (CONTINUED)
================================================================================

out-of-pocket expenses.

CONDITIONS.  Prior to Borrower's receipt of additional equity in an amount not
less than $5,000,000.00, Lender's obligation to advance funds under this Note,
including the initial advance, is conditioned upon the unconditional and
irrevocable guarantee for the performance and payment of any or all
indebtedness owing by Borrower to Lender, as evidenced by those certain
Guaranty agreements, held with Lender, executed by the Guarantors set forth in
the Business Loan Agreement.

GENERAL PROVISIONS.  Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
any applicable statute of limitations, presentment, demand for payment, protest
and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender's security
interest in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to anyone
other than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.


BORROWER:

BOREALIS TECHNOLOGY CORPORATION

By: /s/ ELIZABETH J. GASPER
    -------------------------------------
    Name:  Elizabeth J. Gasper  , Title:   CFO     
          ----------------------         ---------

================================================================================
Variable Rate. Line of Credit.            LASER PRO, Reg. U.S. Pat. & T.M.Off.,
                                          Ver. 3.23(c) 1997CFI ProServices, Inc.
                                          All rights reserved. 
                                          [CA-D20 BOREALIS.LN G1.OVL]
<PAGE>   3
                            BUSINESS LOAN AGREEMENT

Borrower: BOREALIS TECHNOLOGY CORPORATION   Lender:    Silicon Valley Bank
          4070 Silver Sage Drive                       3003 Tasman Drive
          Carson City, NV 89701                        Santa Clara, CA 95054
================================================================================

THIS BUSINESS LOAN AGREEMENT between BOREALIS TECHNOLOGY CORPORATION
("Borrower") and Silicon Valley Bank ("Lender") is made and executed on the
following terms and conditions. Borrower has received prior commercial loans
from lender or has applied to Lender for a commercial loan or loans and other
financial accommodations, including those which may be described on any exhibit
or schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations
from Lender to Borrower, are referred to in this Agreement individually as the
"Loan" and collectively as the "Loans." Borrower understands and agrees that:
(a) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower's representations, warranties, and agreements, as set forth in this
Agreement; (b) the granting, renewing, or extending of any Loan by Lender at
all times shall be subject to Lender's sole judgment and discretion; and (c)
all such Loans shall be and shall remain subject to the following terms and
conditions of this Agreement.

TERM. This Agrement shall be effective as of July 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 Business Loan Agreement, as this
     Business Loan Agreement may be amended or modified from time to time,
     together with all exhibits and schedules attached to this Business Loan
     Agreement from time to time.

     Borrower. The word "Borrower" means BOREALIS TECHNOLOGY CORPORATION. The
     word "Borrower" also includes, as applicable, all subsidiaries and
     affiliates of Borrower as provided below in the paragraph titled
     "Subsidiaries and Affiliates."

     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.

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

     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."

     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 any and all
     indebtedness of Borrower to Lender, now or hereafter arising or incurred,
     including, without limitation, the Indebtedness evidenced by the Note,
     including all principal and interest, together with all other indebtedness
     and costs and expenses for which Borrower is responsible under this
     Agreement or under any Related Documents.

     Lender. The word "Lender" means Silicon Valley Bank, its successors and
     assigns.

     Liquid Assets. The words "Liquid Assets" mean Borrower's cash on hand plus
     Borrower's readily marketable securities.

     Liquidity. The word "Liquidity" means Borrower's Liquid Assets plus fifty
     percent (50%) of net accounts receivable, less than 90 days from the date
     of invoice, divided by the amount outstanding under Borrower's line of
     credit facility.

     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.

<PAGE>   4

                            BUSINESS LOAN AGREEMENT
                                  (CONTINUED)

     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)
     equipment financing lease arrangements, 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) these 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.

     Subordinated Debt. The words "Subordinated Debt" mean indebtedness and
     liabilities of Borrower which have been subordinated by written agreement
     to indebtedness owed by Borrower to Lender in form and substance acceptable
     to lender.

     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.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions
set forth in this Agreement and in the Related Documents.

     Loan Documents. Borrower shall provide to Lender in form satisfactory to
     Lender the following documents for the Loan: (a) the Note, (b) Security
     Agreements granting to Lender security interests in the Collateral, (c)
     Financing Statements perfecting Lender's Security Interests: (d) evidence
     of insurance as required below, and (e) any other documents required under
     this Agreement or by Lender or its counsel, including without limitation
     any guaranties described below.
     
     Borrower's Authorization. Borrower shall have provided in form and
     substance satisfactory to Lender properly certified resolutions, duly
     authorizing the execution and delivery of this Agreement, the Note and the
     Related Documents and such other authorizations and other documents and
     instruments as Lender or its counsel, in their sole discretion, may
     require.

     Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
     charges, and other expenses which are then due and payable as specified in
     this Agreement or any Related Document.

     Representations and Warranties. The representations and warranties set
     forth in this Agreement, in the Related Documents, and in any document or
     certificate delivered to Lender under this Agreement are true and correct.

     No Event of Default. There shall not exist at the time of any advance a
     condition which would constitute an Event of Default under this Agreement.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any indebtedness exists;

     Organization. Borrower is a corporation which is duly organized, validly
     existing, and in good standing under the laws of the State of Delaware 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.

<PAGE>   5
                            BUSINESS LOAN AGREEMENT
                                  (CONTINUED)

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 as contemplated by this Agreement or as previously disclosed
in Borrower's financial statements or in writing to Lender and as accepted by
Lender, and except for property tax liens for taxes not presently due and
payable, 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," and 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.,
Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety
Code, Section 25100, 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. 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 other similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which may
materially adversely affect Borrower's financial condition or properties, other
than litigation, claims, or other events, if any, that have been disclosed to
and acknowledged by Lender in writing.

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

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.

Investment Company Act. Borrower is not an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.

Public Utility Holding Company Act. Borrower is not a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.

Regulations G, T and U. Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T and
U of the Board of Governors of the Federal Reserve System).


                                       3
<PAGE>   6

                            BUSINESS LOAN AGREEMENT
                                  (CONTINUED)

     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 4070 Silver Sage Drive, Carson City, NV 89701.
     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.

     Claims and Defenses. There are no defenses or counterclaims, offsets or
     other adverse claims, demands or actions of any kind, personal or
     otherwise, that Borrower, Grantor, or any Guarantor could assert with
     respect to the Note, Loan, Indebtedness, this Agreement, or the Related
     Documents.

     Survival of Representations and Warranties. Borrower understands and agrees
     that Lender, without independent investigation, is relying upon the above
     representations and warranties in extending Loan Advances to Borrower.
     Borrower further agrees that the foregoing representations and warranties
     shall be continuing in nature and shall remain in full force and effect
     until such time as Borrower's indebtedness shall be paid in full, or until
     this Agreement shall be terminated in the manner provided above, whichever
     is the last to occur.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

     Litigation. Promptly inform Lender in writing of (a) all material adverse
     changes in Borrower's financial condition, and (b) all existing and all
     threatened litigation, claims, investigations, administrative proceedings
     or similar actions affecting Borrower or any Guarantor which could
     materially affect the financial condition of Borrower or the financial
     condition of any Guarantor.

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

     Financial Statements. Furnish Lender with, as soon as available, but in no
     event later than ninety (90) days after the end of each fiscal year,
     Borrower's balance sheet and income statement for the year ended, audited
     by a certified public accountant satisfactory to Lender, and, as soon as
     available, but in no event later than thirty (30) days after the end of
     each month, Borrower's balance sheet and profit and loss statement for the
     period ended and, as soon as available, but in no event later than five (5)
     days after the filing with the Securities and Exchange Commission,
     Borrower's form 10Q and 10K, 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,
     lists 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 from time to time.

     Financial Covenants and Ratios. Comply with the following covenants and
     ratios: Borrower shall maintain on a monthly basis, beginning with the
     month ending August 31, 1997, a minimum Liquidity ratio of 2.00 to 1.00; a
     minimum Tangible Net Worth of $1,500,000.00; and a maximum total Debt to
     Tangible Net Worth ratio of 0.75 to 1.00. Furthermore, Borrower shall not
     report quarterly losses in excess of: $2,500,000.00 for the quarter ending
     June 30, 1997; $1,800,000.00 for the quarter ending September 30, 1997;
     $1,100,000,00 for the quarter ending December 31, 1997; and $900,000.00 for
     the quarter ending March 31, 1998. Thereafter, Borrower shall achieve
     profitability on a quarterly basis. In addition, Borrower shall be in
     receipt of additional equity in an amount not less than $5,000,000.00 no
     later than August 15, 1997.

     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.

                                       4
<PAGE>   7
                            BUSINESS LOAN AGREEMENT
                                  (CONTINUED)
                                        
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, executed by the guarantors named
below, on lender's forms, and in the amounts and under the conditions spelled
out in those guaranties.

        GUARANTORS                                           AMOUNTS
        ----------                                           -------

        Curtis M. Faith                                    $250,000.00
        Peter B. Pitsker                                   $250,000.00
        Peter B. Pitsker and Polly D. Pitsker              $250,000.00
        Revocable Living Trust u/a/d September 11, 1985

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 Borrower's properties, income, or profits. Provided
however, Borrower will not be required to pay and discharge any such
assessment, tax, charge, levy, lien or claim so long as (a) the legality of the
same shall be contested in good faith by appropriate proceedings, and (b)
Borrower shall have established on its books adequate reserves with respect to
such contested assessment, tax, charge, levy, lien, or claim in accordance with
generally accepted accounting practices. Borrower, upon demand of Lender, will
furnish to Lender evidence of payment of the assessments, taxes, charges,
levies, liens and claims and will authorize the appropriate governmental
official to deliver to Lender at any time a written statement of any
assessments, taxes, charges, levies, liens and claims against Borrower's
properties, income, or profits.

Performance. Perform and comply with all terms, conditions, and provisions set
forth in this Agreement and in the Related Documents in a timely manner, and
promptly notify Lender if Borrower learns of the occurrence of any event which
constitutes an Event of Default under this Agreement or under any of the
Related Documents.

Operations. Maintain executive and management personnel with substantially the
same qualifications and experience as the present executive and management
personnel; provide written notice to Lender of any change in executive and
management personnel; conduct its business affairs in a reasonable and prudent
manner and in compliance with all applicable federal, state and municipal laws,
ordinances, rules and regulations respecting its properties, charters,
businesses and operations, including without limitation, compliance with the
Americans with Disabilities Act and with all minimum funding standards and
other requirements of ERISA and other laws applicable to Borrower's employee
benefit plans.

Environmental Studies. Promptly conduct and complete, at Borrower's expense,
all such investigations, studies, samplings and testings as may be requested by
Lender or any governmental authority relative to any substance defined as toxic
or a hazardous substance under any applicable federal, state, or local law,
rule, regulation, order or directive, or any waste or by-product thereof, at or
affecting any property or facility owned, leased or used by Borrower.

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
monthly, within thirty (30) days 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 damages may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of
a permit issued by the appropriate federal, state or local governmental
authorities, shall furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission
on Borrower's part in connection with any environmental activity whether or
not there is damage to the environment and/or other natural resources.

Additional Assurances. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, financing statements,
instruments, documents and other agreements as Lender or its attorneys may
reasonably request to evidence and secure the Loans and to perfect all Security
Interests.


                                       5
<PAGE>   8
                            BUSINESS LOAN AGREEMENT
                                  (CONTINUED)

NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that while this 
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

     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,
     excluding equipment financing lease arrangements, (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 and 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 1988, 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 Guarantee.  (a) Loan, invest in or advance money
     or assets, (b) purchase, create or acquire any interest in any other
     enterprise or entity, or (c) incur any obligation as surety or guarantor
     other than in the ordinary course of business.

CESSATION OF ADVANCES.  If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if;
(a) Borrower or any Guarantor is in default under the terms of this Agreement
or any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender, (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; or (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.

LOAN ADVANCES.  Lender, in its discretion, will make loans to Borrower, in
amounts determined by Lender, up to the amounts as defined and permitted in
this Agreement and the Related Documents, including, but not limited to, any
Promissory Notes, executed by Borrower (the "Credit Limit").  Borrower is
responsible for monitoring the total amount of Loans and Indebtedness
outstanding from time to time, and Borrower shall not permit the same, at any
time to exceed the Credit Limit.  If at any time the total of all outstanding
Loans and Indebtedness exceeds the Credit Limit, Borrower shall immediately pay
the amount of the excess to Lender, without notice of demand.

ACCOUNTS RECEIVABLE AUDIT.  Lender shall conduct an initial audit of Borrower's
accounts receivable within six (6) months from the date hereof, thereafter, such
audits shall be conducted on a semi-annual basis.  Borrower's deposit account
will be debited for the audit expense and a notification will be mailed to
Borrower.

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 Document 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 ceased 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 proceedings, 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 or any Guarantor dies
     or becomes incompetent, or revokes or disputes the validity of, or
     liability under, any Guaranty of the Indebtedness.

     Change in Ownership.  Any change in ownership of twenty-five (25%) or more
     of the common stock of Borrower.


                                       6
<PAGE>   9

                            BUSINESS LOAN AGREEMENT
                                  (CONTINUED)


     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.

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 of 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.

DEFAULT RATE.  Following an Event of Default, including failure to pay upon
final maturity, Lender, at its option, may do one or both of the following: (a)
increase the variable interest rate on the Note to five percentage points
(5.000%) over the otherwise effective interest rate payable thereunder, and (b)
add any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the interest rate provided in the Note.

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 California.  If there is a lawsuit, Borrower
     agrees upon Lender's request to submit to the jurisdiction of the courts of
     Santa Clara County, the State of California.  Lender and Borrower hereby
     waive the right to any jury trial in any action, proceeding, or
     counterclaim brought by either Lender or Borrower against the other.
     (Initial Here________) This Agreement shall be governed by and construed in
     accordance with the laws of the State of California.

     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.

     Borrower Information. Borrower consents to the release of information on or
     about Borrower by Lender in accordance with any court order, law or
     regulation and in response to credit inquiries concerning Borrower.

     Non-Liability of Lender.  The relationship between Borrower and Lender is a
     debtor and creditor relationship and not fiduciary in nature, nor is the
     relationship to be construed as creating any partnership or joint venture
     between Lender and Borrower. Borrower is exercising its own judgment with
     respect to Borrower's business.  All information supplied to Lender is for
     Lender's protection only and no other party is entitled to rely on such
     information. There is no duty for Lender to review, inspect, supervise, or
     inform Borrower of any matter with respect to Borrower's business. Lender
     and Borrower intend that Lender may reasonably rely on all information
     supplied by Borrower to Lender, together with all representations and
     warranties given by Borrower to Lender, without investigation or
     confirmation by Lender and that any investigation or failure to investigate
     will not diminish Lender's right to so rely.

     Notice of Lender's Breach. Borrower must notify Lender in writing of any
     breach of this Agreement or the Related Documents by Lender and any other
     claim, cause of action or offset against Lender within thirty (30) days
     after the occurrence of such breach or after the accrual of such claim,
     cause of action or offset. Borrower waives any claim, cause of action or
     offset for which notice is not given in accordance with this paragraph.
     Lender is entitled to rely on any failure to give such notice.

     Borrower Indemnification. Borrower shall indemnify and hold Lender harmless
     from and against all claims, costs, expenses, losses, damages, and
     liabilities of any kind, including but not limited to attorneys' fees and
     expenses, arising out of any matter relating directly or indirectly to the
     Indebtedness, whether resulting from internal disputes of the Borrower,
     disputes between the Borrower and any Guarantor, or whether involving any
     third parties, or out of any other matter whatsoever related to this
     Agreement or the Related Documents, but excluding any claim or liability
     which arises as a direct result of Lender's gross negligence or willful
     misconduct. This indemnity shall survive full repayment and satisfaction of
     the Indebtedness and termination of this Agreement.


                                       7

<PAGE>   10
                            BUSINESS LOAN AGREEMENT
                                  (CONTINUED)


Counterparts. This Agreement may be executed in multiple counterparts, each of
which, when so executed, shall be deemed an original, but all such counterparts,
taken together, shall constitute one and the same Agreement.

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 as to any person or circumstance, such
finding shall not render that provision invalid or unenforceable as to any other
persons or circumstances. If feasible, any such offending provision shall be
deemed to be modified to be within the limits of enforceability or validity;
however, if the offending provision cannot be so modified, it shall be stricken
and all other provisions of this Agreement in all other respects shall remain
valid and enforceable.

Subsidiaries and Affiliates of Borrower. To the extent the context of any
provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word "Borrower" as used herein
shall include all subsidiaries and affiliates of Borrower. Notwithstanding the
foregoing however, under no circumstances shall this Agreement be construed to
require Lender to make any Loan or other financial accommodation to any
subsidiary or affiliate of Borrower.

Successors and Assigns. All covenants and agreements contained by or on behalf
of Borrower shall bind its successors and assigns and shall inure to the benefit
of Lender, its successors and assigns. Borrower shall not, however, have the
right to assign its rights under this Agreement or any interest therein, without
the prior written consent of Lender.

Survival. All warranties, representations, and covenants made by Borrower in
this Agreement or in any certificate or other instrument delivered by Borrower
to Lender under this Agreement shall be considered to have been relied upon by
Lender and will survive the making of the Loan and delivery to Lender of the
Related Documents, regardless of any investigation made by Lender or on Lender's
behalf.

Time is of the Essence. Time is of the essence in the performance of this
Agreement.

Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No delay
or omission on the part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor, shall constitute a
waiver of any 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.

BORROWER ACKNOWLEDGES HAVING READ ALL OF THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF JULY
15, 1997.

BORROWER:

BOREALIS TECHNOLOGY CORPORATION

By: /s/ ELIZABETH J. GASPER
    -----------------------
Name: Elizabeth J. Gasper
      ---------------------
Title: CFO
       --------------------

LENDER:

Silicon Valley Bank

By:  /s/ KEVIN J. CONWAY
    -----------------------
Name:  Kevin J. Conway
      ---------------------
Title:  Vice President
       --------------------