LOAN AND SECURITY AGREEMENT
                         OPTIKA IMAGING SYSTEMS, INC.



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                            TABLE OF CONTENTS

                                                                            Page

1 ACCOUNTING AND OTHER TERMS...................................................4

2 LOAN AND TERMS OF PAYMENT....................................................4
         2.1 Credit Extensions.................................................4
         2.2 Interest Rate, Payments...........................................5
         2.3 Fees..............................................................5

3 CONDITIONS OF LOANS..........................................................5
         3.1 Conditions Precedent to Initial Credit Extension..................5
         3.2 Conditions Precedent to all Credit Extensions.....................5

4 CREATION OF SECURITY INTEREST................................................5
         4.1 Grant of Security Interest........................................5

5 REPRESENTATIONS AND WARRANTIES...............................................6
         5.1 Due Organization and Authorization................................6
         5.2 Collateral........................................................6
         5.3 Litigation........................................................6
         5.4 No Material Adverse Change in Financial Statements................6
         5.5 Solvency..........................................................6
         5.6 Regulatory Compliance.............................................6
         5.7 Subsidiaries......................................................7
         5.8 Full Disclosure...................................................7

6 AFFIRMATIVE COVENANTS........................................................7
         6.1 Government Compliance.............................................7
         6.2 Financial Statements, Reports, Certificates.......................7
         6.3 Inventory; Returns................................................7
         6.4 Taxes.............................................................8
         6.5 Insurance.........................................................8
         6.6 Primary Accounts..................................................8
         6.7 Financial Covenants...............................................8
         6.8 Further Assurances................................................8

7 NEGATIVE COVENANTS...........................................................8
         7.1 Dispositions......................................................8
         7.2 Changes in Business, Ownership, Management or Business Locations..9
         7.3 Mergers or Acquisitions...........................................9
         7.4 Indebtedness......................................................9
         7.5 Encumbrance.......................................................9
         7.6 Distributions; Investments........................................9
         7.7 Transactions with Affiliates......................................9
         7.8 Subordinated Debt.................................................9
         7.9 Compliance........................................................9

8 EVENTS OF DEFAULT...........................................................10
         8.1 Payment Default..................................................10
         8.2 Covenant Default.................................................10
         8.3 Material Adverse Change..........................................10
         8.4 Attachment.......................................................10
         8.5 Insolvency.......................................................10
         8.6 Other Agreements.................................................10
         8.7 Judgments........................................................11
         8.8 Misrepresentations...............................................11

9 BANK'S RIGHTS AND REMEDIES..................................................11
         9.1 Rights and Remedies..............................................11
         9.2 Power of Attorney................................................11
         9.3 Accounts Collection..............................................12
         9.4 Bank Expenses....................................................12
         9.5 Bank's Liability for Collateral..................................12
         9.6 Remedies Cumulative..............................................12
         9.7 Demand Waiver....................................................12

10 NOTICES....................................................................12

11 CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER................................13

12 GENERAL PROVISIONS.........................................................13
         12.1 Successors and Assigns..........................................13
         12.2 Indemnification.................................................13
         12.3 Time of Essence.................................................13
         12.4 Severability of Provision.......................................13
         12.5 Amendments in Writing, Integration..............................13
         12.6 Counterparts....................................................13
         12.7 Survival........................................................14
         12.8 Confidentiality.................................................14
         12.9 Attorneys' Fees, Costs and Expenses.............................14

13 DEFINITIONS................................................................14
         13.1 Definitions.....................................................14
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         This LOAN AND  SECURITY  AGREEMENT  dated  October  15,  1998,  between
SILICON VALLEY BANK ("Bank"),  whose address is 3003 Tasman Drive,  Santa Clara,
California  95054 with a loan  production  office located at 4430 Arapahoe Ave.,
Ste. 225, Boulder,  Colorado 80303 and OPTIKA IMAGING SYSTEMS,  INC., a Delaware
corporation  ("Borrower"),  whose  address  is 7450  Campus  Drive,  2nd  Floor,
Colorado  Springs,  Colorado 80920 provides the terms on which Bank will lend to
Borrower and Borrower will repay Bank. The parties agree as follows:

         This  Loan  and  Security  Agreement  replaces  that  certain  Loan and
Security Agreement,  dated June 16, 1995, by and between Optika Imaging Systems,
Inc., a California  corporation and Bank.  Borrower agrees to assume any and all
obligations between Optika Imaging Systems, Inc. a California  corporation,  and
Bank existing prior to the date of this Agreement.

1        ACCOUNTING AND OTHER TERMS
         --------------------------

         Accounting  terms  not  defined  in this  Agreement  will be  construed
following GAAP Calculations and determinations  must be made following GAAP. The
term  "financial  statements"  includes  the  notes  and  schedules.  The  terms
"including"  and  "includes"   always  mean  "including  (or  includes)  without
limitation," in this or any Loan Document.  This Agreement shall be construed to
impart upon Bank a duty to act reasonably at all times.

2        LOAN AND TERMS OF PAYMENT
         -------------------------

2.1      Credit Extensions.

         Borrower  will pay Bank  the  unpaid  principal  amount  of all  Credit
Extensions and interest on the unpaid principal amount of the Credit Extensions.

2.1.1    Revolving Advances.

         (a) Bank will make Advances not  exceeding (i) the Committed  Revolving
Line,  minus (ii) the  amount of all  outstanding  Letters of Credit  (including
drawn but unreimbursed  Letters of Credit).  Amounts borrowed under this Section
may be repaid and reborrowed during the term of this Agreement.

         (b) To obtain an Advance,  Borrower  must notify Bank by  facsimile  or
telephone  by 3:00 p.m.  Pacific  time on the  Business Day the Advance is to be
made.  Borrower must promptly confirm the notification by delivering to Bank the
Payment/Advance  Form  attached  as  Exhibit  B. Bank will  credit  Advances  to
Borrower's deposit account. Bank may make Advances under this Agreement based on
instructions  from a  Responsible  Officer  or his or her  designee  or  without
instructions if the Advances are necessary to meet Obligations which have become
due. Bank may rely on any telephone  notice given by a person whom Bank believes
is a Responsible Officer or designee.  Borrower will indemnify Bank for any loss
Bank suffers due to reliance.

         (c) The Committed  Revolving Line terminates on the Revolving  Maturity
Date,  when all  Advances  and  other  amounts  due  under  this  Agreement  are
immediately payable.

2.1.2    Letters of Credit.

         Bank will issue or have issued Letters of Credit for Borrower's account
not  exceeding  (i) the  Committed  Revolving  Line minus  (ii) the  outstanding
principal  balance of the  Advances;  however,  the face  amount of  outstanding
Letters of Credit  (including drawn but  unreimbursed  Letters of Credit and any
Letter of Credit  Reserve) may not exceed  $500,000.  Each Letter of Credit will
have an expiry date of no later than 180 days after the Revolving Maturity Date,
but  Borrower's  reimbursement  obligation  will be  secured  by  cash on  terms
acceptable to Bank at any time after the Revolving  Maturity Date if the term of
this Agreement is not extended by Bank.

2.2      Interest Rate, Payments.

         (a)  Interest  Rate.   Advances  accrue  interest  on  the  outstanding
principal balance at a per annum rate equal to the Prime Rate. After an Event of
Default,  Obligations  accrue  interest  at 5 percent  above the rate  effective
immediately  before  the  Event of  Default.  The  interest  rate  increases  or
decreases  when the Prime Rate  changes.  Interest is computed on a 360 day year
for the actual number of days elapsed.

         (b) Payments.  Interest due on the Committed  Revolving Line is payable
on the 15th of each month.  Bank may debit any of  Borrower's  deposit  accounts
including Account Number ________________ for principal and interest payments or
any  amounts  Borrower  owes  Bank.  Bank will  notify  Borrower  when it debits
Borrower's  accounts.  These debits are not a set-off.  Payments  received after
12:00 noon  Pacific time are  considered  received at the opening of business on
the next  Business  Day.  When a payment  is due on a day that is not a Business
Day, the payment is due the next  Business Day and  additional  fees or interest
accrue.

2.3      Fees.

         Borrower will pay:

         (a) Facility  Fee. A fully earned,  non-refundable  Facility Fee of 
$15,000 due on the Closing Date; and

         (b) Bank Expenses.  All Bank Expenses (including  reasonable attorneys'
fees and expenses)  incurred  through and after the date of this Agreement,  are
payable when due.

3        CONDITIONS OF LOANS

3.1      Conditions Precedent to Initial Credit Extension.

         Bank's  obligation to make the initial  Credit  Extension is subject to
the condition  precedent that it receive the  agreements,  documents and fees it
requires.

3.2      Conditions Precedent to all Credit Extensions.

         Bank's obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following:

         (a) timely receipt of any Payment/Advance Form; and

         (b) the  representations and warranties in Section 5 must be materially
true on the date of the  Payment/Advance  Form and on the effective date of each
Credit Extension and no Event of Default may have occurred and be continuing, or
result  from  the  Credit   Extension.   Each  Credit  Extension  is  Borrower's
representation and warranty on that date that the representations and warranties
of Section 5 remain true.

4        CREATION OF SECURITY INTEREST

4.1      Grant of Security Interest.

         Borrower  grants Bank a continuing  security  interest in all presently
existing and later acquired Collateral to secure all Obligations and performance
of each of  Borrower's  duties under the Loan  Documents.  Except for  Permitted
Liens, any security  interest will be a first priority  security interest in the
Collateral.  Bank  may  place  a  "hold"  on  any  deposit  account  pledged  as
Collateral, up to the amount of any outstanding Obligations.

5        REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants as follows:

5.1      Due Organization and Authorization.

         Borrower and each  Subsidiary  is duly existing and in good standing in
its state of formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its  ownership of
property requires that it be qualified.

         The execution, delivery and performance of the Loan Documents have been
duly authorized,  and do not conflict with Borrower's formation  documents,  nor
constitute an event of default under any material agreement by which Borrower is
bound. Borrower is not in default under any agreement to which or by which it is
bound in which the default could cause a Material Adverse Change.

5.2      Collateral.

         Borrower  has  good  title  to the  Collateral,  free of  Liens  except
Permitted  Liens.  All  Inventory  is in  all  material  respects  of  good  and
marketable quality, free from material defects.

5.3      Litigation.

         Except as shown in the  Schedule,  there are no actions or  proceedings
pending or, to Borrower's  knowledge,  threatened by or against  Borrower or any
Subsidiary in which an adverse decision could cause a Material Adverse Change.

5.4      No Material Adverse Change in Financial Statements.

         All consolidated financial statements for Borrower, and any Subsidiary,
delivered  to  Bank  fairly   present  in  all  material   respects   Borrower's
consolidated   financial  condition  and  Borrower's   consolidated  results  of
operations.  There  has  not  been  any  material  deterioration  in  Borrower's
consolidated  financial  condition  since the date of the most recent  financial
statements submitted to Bank.

5.5      Solvency.

         The fair salable value of Borrower's assets  (including  goodwill minus
disposition  costs) exceeds the fair value of its  liabilities;  the Borrower is
not  left  with  unreasonably  small  capital  after  the  transactions  in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
mature.

5.6      Regulatory Compliance.

         Borrower is not an "investment company" or a company "controlled" by an
"investment  company" under the Investment  Company Act. Borrower is not engaged
as one of its important  activities in extending  credit for margin stock (under
Regulations G, T and U of the Federal Reserve Board of Governors).  Borrower has
complied with the Federal Fair Labor  Standards  Act.  Borrower has not violated
any laws,  ordinances  or rules,  the  violation of which could cause a Material
Adverse Change. None of Borrower's or any Subsidiary's  properties or assets has
been used by Borrower or any Subsidiary or, to the best of Borrower's knowledge,
by previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous  substance  other than legally.  Borrower and each  Subsidiary has
timely filed all required tax returns and paid,  or made  adequate  provision to
pay,  all taxes,  except  those  being  contested  in good  faith with  adequate
reserves  under GAAP.  Borrower and each  Subsidiary  has obtained all consents,
approvals and  authorizations  of, made all  declarations  or filings with,  and
given all notices to, all government  authorities that are necessary to continue
its business as currently conducted.

5.7      Subsidiaries.

         Borrower does not own any stock,  partnership  interest or other equity
securities except for Permitted Investments.

5.8      Full Disclosure.

         No  representation,  warranty  or other  statement  of  Borrower in any
certificate or written  statement given to Bank contains any untrue statement of
a  material  fact or  omits  to  state a  material  fact  necessary  to make the
statements contained in the certificates or statements not misleading.

6        AFFIRMATIVE COVENANTS

         Borrower will do all of the following:

6.1      Government Compliance.

         Borrower will maintain its and all  Subsidiaries'  legal  existence and
good standing in its  jurisdiction  of formation and maintain  qualification  in
each  jurisdiction  in which the  failure  to so  qualify  could have a material
adverse effect on Borrower's  business or operations.  Borrower will comply, and
have each Subsidiary comply, with all laws,  ordinances and regulations to which
it is subject,  noncompliance with which could have a material adverse effect on
Borrower's business or operations or cause a Material Adverse Change.

6.2      Financial Statements, Reports, Certificates.

         (a) Borrower will deliver to Bank: (i) within 5 days of filing,  copies
of all  statements,  reports and notices made  available to Borrower's  security
holders or to any  holders of  Subordinated  Debt and all  reports on Form 10-K,
10-Q and 8-K filed with the  Securities and Exchange  Commission;  (ii) a prompt
report of any legal  actions  pending  or  threatened  against  Borrower  or any
Subsidiary  that could result in damages or costs to Borrower or any  Subsidiary
of $100,000 or more; and (iii) budgets,  sales  projections,  operating plans or
other financial information Bank requests.

         (b) Within 30 days after the last day of each  quarter,  Borrower will 
deliver to Bank aged listings of accounts receivable.

         (c) Within 50 days after the last day of each  quarter,  Borrower  will
deliver to Bank with the quarterly financial statements a Compliance Certificate
signed by a Responsible Officer in the form of Exhibit C.

         (d) Bank has the right to audit  Borrower's  Collateral  at  Borrower's
expense prior to the initial Credit  Extension,  and at such time as an Event of
Default has occurred and is continuing.

6.3      Inventory; Returns.

         Borrower will keep all Inventory in good and marketable condition, free
from material defects.  Returns and allowances  between Borrower and its account
debtors will follow Borrower's customary practices as they exist at execution of
this Agreement.  Borrower must promptly notify Bank of all returns,  recoveries,
disputes and claims, that involve more than $50,000.

6.4      Taxes.

         Borrower will make, and cause each  Subsidiary to make,  timely payment
of all material federal,  state, and local taxes or assessments and will deliver
to Bank, on demand, appropriate certificates attesting to the payment.

6.5      Insurance.

         Borrower  will keep its business and the  Collateral  insured for risks
and in amounts,  as Bank requests.  Insurance  policies will be in a form,  with
companies,  and in amounts that are satisfactory to Bank. All property  policies
will have a lender's loss payable endorsement showing Bank as an additional loss
payee and all liability policies will show the Bank as an additional insured and
provide that the insurer must give Bank at least 20 days notice before canceling
its  policy.  At Bank's  request,  Borrower  will  deliver  certified  copies of
policies and evidence of all premium payments. Proceeds payable under any policy
will, at Bank's option, be payable to Bank on account of the Obligations.

6.6      Primary Accounts.

         Borrower will maintain its primary  depository  and operating  accounts
with Bank.

6.7      Financial Covenants.

         Borrower will maintain as of the last day of each quarter:

                  (i)   Quick Ratio  [Adjusted].  A ratio of Quick Assets to 
Current Liabilities minus Deferred Maintenance Revenue of at least 2.00 to 1.00.

                  (ii)  Tangible  Net  Worth.  A  Tangible  Net  Worth  of at 
least  $8,000,000  plus 75% of new equity received by Borrower.

                  (iii) Minimum  Cash.  A  ratio  of  unrestricted   cash  (and
equivalents),  less all current outstanding Credit Extensions,  of not less than
$3,000,000.

                  (iv) Profitability.  Borrower will be profitable each quarter,
except that  Borrower  may suffer  losses not to exceed  $500,000 for the fiscal
quarter ending  December 31, 1998;  $400,000 for the fiscal quarter ending March
31, 1999; and $250,000 for the fiscal quarter ending June 30, 1999.

6.8      Further Assurances.

         Borrower will execute any further  instruments  and take further action
as Bank  requests  to  perfect  or  continue  Bank's  security  interest  in the
Collateral or to effect the purposes of this Agreement.

7        NEGATIVE COVENANTS

         Borrower will not do any of the following:

7.1      Dispositions.

         Convey,  sell,  lease,  transfer or otherwise  dispose of (collectively
"Transfer"),  or permit any of its Subsidiaries to Transfer,  all or any part of
its business or property,  other than Transfers (i) of Inventory in the ordinary
course of business;  (ii) of non-exclusive licenses and similar arrangements for
the use of the property of Borrower or its  Subsidiaries  in the ordinary course
of business; or (iii) of worn-out or obsolete Equipment.

7.2      Changes in Business, Ownership, Management or Business Locations.

         Engage in or permit any of its  Subsidiaries  to engage in any business
other than the  businesses  currently  engaged in by Borrower or have a material
change in its ownership of greater than 25%. Borrower will not, without at least
30 days prior written notice, relocate its chief executive office or add any new
offices or business locations in which 10 or more employees occupy.

7.3      Mergers or Acquisitions.

         Merge or  consolidate,  or permit any of its  Subsidiaries  to merge or
consolidate,   with  any  other  Person,  or  acquire,  or  permit  any  of  its
Subsidiaries  to  acquire,  all or  substantially  all of the  capital  stock or
property of another  Person,  except (i) where no Event of Default has  occurred
and is  continuing  or would  result  from such  action  during the term of this
Agreement  and  Tangible  Net Worth will not  decrease by more than 25%; or (ii)
merge or consolidate a Subsidiary into another Subsidiary or into Borrower.

7.4      Indebtedness.

         Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.

7.5      Encumbrance.

         Create,  incur, or allow any Lien on any of its property,  or assign or
convey any right to  receive  income,  including  the sale of any  Accounts,  or
permit any of its  Subsidiaries to do so, except for Permitted  Liens, or permit
any Collateral not to be subject to the first priority security interest granted
here.

7.6      Distributions; Investments.

         Directly  or  indirectly  acquire  or  own  any  Person,  or  make  any
Investment in any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so. Pay any dividends or make any  distribution or payment or
redeem,  retire or  purchase  any  capital  stock,  other  than  majority  owned
Subsidiaries.

7.7      Transactions with Affiliates.

         Directly or indirectly  enter or permit any material  transaction  with
any Affiliate except  transactions that are in the ordinary course of Borrower's
business, on terms less favorable to Borrower than would be obtained in an arm's
length transaction with a non-affiliated Person.

7.8      Subordinated Debt.

         Make or permit any payment on any Subordinated  Debt,  except under the
terms of the Subordinated  Debt, or amend any provision in any document relating
to the Subordinated Debt without Bank's prior written consent.

7.9      Compliance.

         Become  an  "investment   company"  or  a  company   controlled  by  an
"investment  company," under the Investment  Company Act of 1940 or undertake as
one of its  important  activities  extending  credit to purchase or carry margin
stock,  or use the proceeds of any Credit  Extension for that  purpose;  fail to
meet the minimum  funding  requirements of ERISA,  permit a Reportable  Event or
Prohibited  Transaction,  as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation,  if the
violation  could  have a  material  adverse  effect on  Borrower's  business  or
operations or cause a Material Adverse Change, or permit any of its Subsidiaries
to do so.

8        EVENTS OF DEFAULT

         Any one of the following is an Event of Default:

8.1      Payment Default.

         If Borrower fails to pay any of the Obligations;

8.2      Covenant Default.

         If Borrower  does not perform any  obligation  in Section 6 or violates
any  covenant  in Section 7 or does not  perform or observe  any other  material
term,  condition or covenant in this Agreement,  any Loan  Documents,  or in any
agreement  between  Borrower  and  Bank  and as to any  default  under  a  term,
condition  or covenant  that can be cured,  has not cured the default  within 10
days after it occurs, or if the default cannot be cured within 10 days or cannot
be cured after Borrower's  attempts within 10 day period, and the default may be
cured within a reasonable  time, then Borrower has an additional  period (of not
more than 30 days) to attempt to cure the default.  During the additional  time,
the  failure  to cure the  default  is not an Event of  Default  (but no  Credit
Extensions will be made during the cure period);

8.3      Material Adverse Change.

         (i) If there occurs a material impairment in the perfection or priority
of the  Bank's  security  interest  in the  Collateral  or in the  value of such
Collateral  which  is not  covered  by  adequate  insurance  or (ii) if the Bank
determines,  based  upon  information  available  to it and  in  its  reasonable
judgment,  that there is a  reasonable  likelihood  that  Borrower  will fail to
comply with one or more of the financial  covenants in Section 6 during the next
succeeding financial reporting period.

8.4      Attachment.

         If any  material  portion of  Borrower's  assets is  attached,  seized,
levied on, or comes into possession of a trustee or receiver and the attachment,
seizure  or  levy  is not  removed  in 10  days,  or if  Borrower  is  enjoined,
restrained,  or prevented by court order from  conducting a material part of its
business or if a judgment or other claim becomes a Lien on a material portion of
Borrower's  assets, or if a notice of lien, levy, or assessment is filed against
any of Borrower's  assets by any  government  agency and not paid within 10 days
after Borrower receives notice.  These are not Events of Default if stayed or if
a bond is posted pending  contest by Borrower (but no Credit  Extensions will be
made during the cure period);

8.5      Insolvency.

         If  Borrower  becomes  insolvent  or if Borrower  begins an  Insolvency
Proceeding  or an  Insolvency  Proceeding  is  begun  against  Borrower  and not
dismissed or stayed within 30 days (but no Credit Extensions will be made before
any Insolvency Proceeding is dismissed);

8.6      Other Agreements.

         If there is a default in any  agreement  between  Borrower  and a third
party  that  gives the third  party the  right to  accelerate  any  Indebtedness
exceeding $100,000 or that could cause a Material Adverse Change;

8.7      Judgments.

         If a money judgment(s) in the aggregate of at least $50,000 is rendered
against  Borrower  and is  unsatisfied  and  unstayed for 10 days (but no Credit
Extensions will be made before the judgment is stayed or satisfied); or

8.8      Misrepresentations.

         If  Borrower  or any Person  acting  for  Borrower  makes any  material
misrepresentation  or  material  misstatement  now or later in any  warranty  or
representation  in this  Agreement  or in any  writing  delivered  to Bank or to
induce Bank to enter this Agreement or any Loan Document.

9        BANK'S RIGHTS AND REMEDIES

9.1      Rights and Remedies.

         When an Event of Default occurs and continues Bank may,  without notice
or demand, do any or all of the following:

         (a)  Declare all  Obligations  immediately  due and payable  (but if an
Event of Default described in Section 8.5 occurs all Obligations are immediately
due and payable without any action by Bank);

         (b) Stop advancing  money or extending  credit for  Borrower's  benefit
under this Agreement or under any other agreement between Borrower and Bank;

         (c) Settle or adjust  disputes and claims directly with account debtors
for amounts, on terms and in any order that Bank considers advisable;

         (d)  Make  any  payments  and do any  acts it  considers  necessary  or
reasonable  to protect its security  interest in the  Collateral.  Borrower will
assemble  the  Collateral  if  Bank  requires  and  make  it  available  as Bank
designates.  Bank may enter premises  where the Collateral is located,  take and
maintain possession of any part of the Collateral,  and pay, purchase,  contest,
or  compromise  any Lien which  appears to be prior or superior to its  security
interest and pay all expenses incurred.  Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank's rights
or remedies;

         (e) Apply to the  Obligations any (i) balances and deposits of Borrower
it holds,  or (ii) any  amount  held by Bank  owing to or for the  credit or the
account of Borrower;

         (f) Ship, reclaim,  recover, store, finish,  maintain,  repair, prepare
for sale, advertise for sale, and sell the Collateral;

         (g) Dispose of the Collateral according to the Code; and

         (h) Modify this  Agreement  and the Loan  Documents  to require,  among
other things, an advance rate under the Committed  Revolving Line subject to the
value of Borrower's Accounts.

9.2      Power of Attorney.

         Effective only when an Event of Default occurs and continues,  Borrower
irrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower's name
on any checks or other forms of payment or security;  (ii) sign  Borrower's name
on any  invoice or bill of lading  for any  Account  or drafts  against  account
debtors,  (iii) make, settle,  and adjust all claims under Borrower's  insurance
policies; (iv) settle and adjust disputes and claims about the Accounts directly
with account debtors, for amounts and on terms Bank determines  reasonable;  and
(v) transfer the  Collateral  into the name of Bank or a third party as the Code
permits.  Bank may exercise the power of attorney to sign Borrower's name on any
documents  necessary  to perfect or  continue  the  perfection  of any  security
interest  regardless  of  whether  an  Event of  Default  has  occurred.  Bank's
appointment as Borrower's attorney in fact, and all of Bank's rights and powers,
coupled with an interest,  are irrevocable until all Obligations have been fully
repaid  and  performed  and  Bank's  obligation  to  provide  Credit  Extensions
terminates.

9.3      Accounts Collection.

         When an Event of  Default  occurs  and  continues,  Bank may notify any
Person owing Borrower money of Bank's security  interest in the funds and verify
the amount of the Account.  Borrower must collect all payments in trust for Bank
and, if requested by Bank,  immediately deliver the payments to Bank in the form
received from the account debtor, with proper endorsements for deposit.

9.4      Bank Expenses.

         If Borrower  fails to pay any amount or furnish any  required  proof of
payment  to third  persons  Bank may make all or part of the  payment  or obtain
insurance  policies  required  in Section  6.5,  and take any  action  under the
policies  Bank deems  prudent.  Any amounts  paid by Bank are Bank  Expenses and
immediately  due and payable,  bearing  interest at the then applicable rate and
secured by the  Collateral.  No payments by Bank are deemed an agreement to make
similar payments in the future or Bank's waiver of any Event of Default.

9.5      Bank's Liability for Collateral.

         If Bank complies  with  reasonable  banking  practices it is not liable
for:  (a) the  safekeeping  of the  Collateral;  (b) any loss or  damage  to the
Collateral; (c) any diminution in the value of the Collateral; or (d) any act or
default of any carrier,  warehouseman,  bailee, or other person.  Borrower bears
all risk of loss, damage or destruction of the Collateral.

9.6      Remedies Cumulative.

         Bank's rights and remedies under this  Agreement,  the Loan  Documents,
and all other  agreements  are  cumulative.  Bank has all  rights  and  remedies
provided under the Code, by law, or in equity.  Bank's  exercise of one right or
remedy is not an  election,  and Bank's  waiver of any Event of Default is not a
continuing waiver. Bank's delay is not a waiver,  election, or acquiescence.  No
waiver is effective  unless  signed by Bank and then is only  effective  for the
specific instance and purpose for which it was given.

9.7      Demand Waiver.

         Borrower  waives  demand,  notice of  default  or  dishonor,  notice of
payment and nonpayment,  notice of any default, nonpayment at maturity, release,
compromise,   settlement,   extension,   or  renewal  of  accounts,   documents,
instruments,  chattel paper,  and  guarantees  held by Bank on which Borrower is
liable.

10       NOTICES

         All notices or demands by any party about this  Agreement  or any other
related  agreement must be in writing and be personally  delivered or sent by an
overnight delivery service,  by certified mail, postage prepaid,  return receipt
requested,  or by  telefacsimile  to the addresses set forth at the beginning of
this Agreement.  A Party may change its notice address by giving the other Party
written notice.

11       CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER

         California law governs the Loan Documents  without regard to principles
of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in Santa Clara County, California.

BORROWER  AND BANK EACH WAIVE  THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF  ACTION  ARISING  OUT  OF  ANY  OF THE  LOAN  DOCUMENTS  OR ANY  CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL  INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS  AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12       GENERAL PROVISIONS

12.1     Successors and Assigns.

         This  Agreement  binds and is for the  benefit  of the  successors  and
permitted  assigns of each party.  Borrower may not assign this Agreement or any
rights under it without  Bank's prior  written  consent  which may be granted or
withheld  in Bank's  discretion.  Bank has the right,  without the consent of or
notice to Borrower, to sell, transfer,  negotiate, or grant participation in all
or any part of, or any  interest  in,  Bank's  obligations,  rights and benefits
under this Agreement.

12.2     Indemnification.

         Borrower  will  indemnify,  defend  and  hold  harmless  Bank  and  its
officers,  employees, and agents against: (a) all obligations,  demands, claims,
and liabilities  asserted by any other party in connection with the transactions
contemplated  by the  Loan  Documents;  and (b)  all  losses  or  Bank  Expenses
incurred,  or paid by Bank from,  following,  or  consequential  to transactions
between Bank and Borrower  (including  reasonable  attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

12.3     Time of Essence.

         Time is of the essence for the  performance of all  obligations in this
Agreement.

12.4     Severability of Provision.

         Each  provision  of  this  Agreement  is  severable  from  every  other
provision in determining the enforceability of any provision.

12.5     Amendments in Writing, Integration.

         All  amendments  to this  Agreement  must be in  writing  and signed by
Borrower and Bank.  This Agreement  represents the entire  agreement  about this
subject  matter,  and supersedes  prior  negotiations  or agreements.  All prior
agreements,  understandings,   representations,   warranties,  and  negotiations
between the parties about the subject matter of this  Agreement  merge into this
Agreement and the Loan Documents.

12.6     Counterparts.

         This  Agreement  may be executed in any number of  counterparts  and by
different  parties on separate  counterparts,  each of which,  when executed and
delivered, are an original, and all taken together, constitute one agreement.

12.7     Survival.

         All covenants,  representations  and warranties  made in this Agreement
continue in full force while any Obligations remain outstanding. The obligations
of Borrower in Section 12.2 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.

12.8     Confidentiality.

         In handling any confidential  information,  Bank will exercise the same
degree  of care  that it  exercises  for its own  proprietary  information,  but
disclosure of information  may be made (i) to Bank's  subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or  purchasers  of  any  interest  in the  Loans,  (iii)  as  required  by  law,
regulation, subpoena, or other order, (iv) as required in connection with Bank's
examination or audit and (v) as Bank considers  appropriate  exercising remedies
under this Agreement. Confidential information does not include information that
either:  (a) is in the public domain or in Bank's  possession  when disclosed to
Bank, or becomes part of the public  domain after  disclosure to Bank; or (b) is
disclosed to Bank by a third  party,  if Bank does not know that the third party
is prohibited from disclosing the information.


12.9     Attorneys' Fees, Costs and Expenses.

         In any action or  proceeding  between  Borrower and Bank arising out of
the Loan  Documents,  the  prevailing  party will be  entitled  to  recover  its
reasonable attorneys' fees and other costs and expenses incurred, in addition to
any other relief to which it may be entitled.

13       DEFINITIONS

13.1     Definitions.

         In this Agreement:

         "Accounts"  are all  existing  and  later  arising  accounts,  contract
rights, and other obligations owed Borrower in connection with its sale or lease
of goods  (including  licensing  software and other  technology) or provision of
services, all credit insurance,  guaranties,  other security and all merchandise
returned or reclaimed by Borrower and  Borrower's  Books  relating to any of the
foregoing.

         "Affiliate"  of a Person is a Person that owns or controls  directly or
indirectly the Person,  any Person that controls or is controlled by or is under
common  control  with the Person,  and each of that  Person's  senior  executive
officers,  directors,  partners and, for any Person that is a limited  liability
company, that Person's managers and members.

         "Bank Expenses" are all audit fees and expenses and reasonable costs or
expenses  (including  reasonable  attorneys'  fees and expenses) for  preparing,
negotiating,   administering,   defending  and  enforcing  the  Loan   Documents
(including appeals or Insolvency Proceedings).

         "Borrower's  Books"  are all  Borrower's  books and  records  including
ledgers,  records regarding  Borrower's  assets or liabilities,  the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

         "Business Day" is any day that is not a Saturday, Sunday or a day on 
which the Bank is closed.

         "Closing Date" is the date of this Agreement.

         "Code" is the California Uniform Commercial Code.

         "Collateral" is the property described on Exhibit A.

         "Committed Revolving Line" is an Advance of up to $3,000,000.

         "Contingent  Obligation"  is, for any  Person,  any direct or  indirect
liability,  contingent or not, of that Person for (i) any  indebtedness,  lease,
dividend,  letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed,  endorsed,  co-made,  discounted or sold with
recourse by that  Person,  or for which that  Person is  directly or  indirectly
liable;  (ii) any  obligations  for undrawn letters of credit for the account of
that  Person;  and (iii) all  obligations  from any interest  rate,  currency or
commodity  swap  agreement,  interest  rate cap or  collar  agreement,  or other
agreement or arrangement  designated to protect a Person against  fluctuation in
interest rates,  currency  exchange rates or commodity  prices;  but "Contingent
Obligation"  does not include  endorsements  in the ordinary course of business.
The amount of a Contingent  Obligation is the stated or determined amount of the
primary  obligation  for  which  the  Contingent  Obligation  is made or, if not
determinable,  the maximum reasonably anticipated liability for it determined by
the Person in good  faith;  but the  amount  may not  exceed the  maximum of the
obligations under the guarantee or other support arrangement.

         "Credit  Extension"  is each  Advance,  Letter of Credit,  or any other
extension of credit by Bank for Borrower's benefit.

         "Current  Liabilities"  are the aggregate  amount of  Borrower's  Total
Liabilities which mature within one (1) year.

         "Deferred  Maintenance  Revenue" is all amounts  received in advance of
performance under maintenance contracts and not yet recognized as revenue.

         "Equipment"  is all present  and future  machinery,  equipment,  tenant
improvements,  furniture,  fixtures,  vehicles,  tools, parts and attachments in
which Borrower has any interest.

         "ERISA" is the Employment Retirement Income Security Act of 1974, and 
its regulations.

         "GAAP" is generally accepted accounting principles.

         "Indebtedness"  is (a)  indebtedness for borrowed money or the deferred
price of property or services,  such as reimbursement  and other obligations for
surety bonds and letters of credit, (b) obligations  evidenced by notes,  bonds,
debentures  or  similar  instruments,  (c)  capital  lease  obligations  and (d)
Contingent Obligations.

         "Insolvency  Proceeding" are proceedings by or against any Person under
the United States  Bankruptcy  Code, or any other  bankruptcy or insolvency law,
including  assignments  for the benefit of creditors,  compositions,  extensions
generally  with  its   creditors,   or   proceedings   seeking   reorganization,
arrangement, or other relief.

         "Inventory"  is present and future  inventory in which Borrower has any
interest,  including merchandise,  raw materials,  parts, supplies,  packing and
shipping  materials,  work in process and finished products intended for sale or
lease  or to be  furnished  under a  contract  of  service,  of  every  kind and
description  now or later  owned by or in the custody or  possession,  actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including  insurance  proceeds)  from  the  sale or  disposition  of any of the
foregoing and any documents of title.

         "Investment"   is  any  beneficial   ownership  of  (including   stock,
partnership  interest or other securities) any Person,  or any loan,  advance or
capital contribution to any Person.

         "Letter of Credit" is defined in Section 2.

         "Lien" is a mortgage,  lien, deed of trust,  charge,  pledge,  security
interest or other encumbrance.

         "Loan Documents" are, collectively,  this Agreement, any note, or notes
or guaranties executed by Borrower or Guarantor, and any other present or future
agreement  between  Borrower  and/or for the benefit of Bank in connection  with
this Agreement, all as amended, extended or restated.

         "Material Adverse Change" is defined in Section 8.3.

         "Obligations" are debts,  principal,  interest, Bank Expenses and other
amounts  Borrower  owes  Bank now or later,  including  letters  of  credit  and
Exchange Contracts and including interest accruing after Insolvency  Proceedings
begin and debts, liabilities, or obligations of Borrower assigned to Bank.

         "Permitted Indebtedness" is:

         (a)  Borrower's indebtedness to Bank under this Agreement or any other 
Loan Document;

         (b)  Indebtedness  existing  on  the  Closing  Date  and  shown  on the
Schedule;

         (c)  Subordinated Debt;

         (d) Indebtedness to trade creditors  incurred in the ordinary course of
business; and

         (e) Indebtedness secured by Permitted Liens.

         "Permitted Investments" are:

         (a)  Investments existing on the Closing Date; and

         (b)  (i)  marketable  direct   obligations  issued  or  unconditionally
guaranteed  by the United  States or its agency or any State  maturing  within 1
year from its  acquisition,  (ii) commercial  paper maturing no more than 1 year
after its creation and having the highest  rating from either  Standard & Poor's
Corporation or Moody's Investors Service, Inc., and (iii) Bank's certificates of
deposit issued maturing no more than 1 year after issue.

         "Permitted Liens" are:

         (a) Liens  existing  on the Closing  Date and shown on the  Schedule or
arising under this Agreement or other Loan Documents;

         (b) Liens for taxes,  fees,  assessments or other government charges or
levies,  either not  delinquent  or being  contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over
any of Bank's security interests;

         (c) Purchase money Liens (i) on Equipment  acquired or held by Borrower
or its Subsidiaries incurred for financing the acquisition of the Equipment,  or
(ii)  existing  on  equipment  when  acquired,  if the Lien is  confined  to the
property and improvements and the proceeds of the equipment;

         (d) Leases or  subleases  and  licenses or  sublicenses  granted in the
ordinary  course of  Borrower's  business and any interest or title of a lessor,
licensor or under any lease or license, if the leases,  subleases,  licenses and
sublicenses permit granting Bank a security interest;

         (e) Liens  incurred in the  extension,  renewal or  refinancing  of the
indebtedness  secured by Liens  described in (a) through (c), but any extension,
renewal or  replacement  Lien must be limited to the property  encumbered by the
existing Lien and the principal amount of the indebtedness may not increase.

         "Person" is any individual, sole proprietorship,  partnership,  limited
liability company,  joint venture,  company association,  trust,  unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or government agency.

         "Prime Rate" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.

         "Quick  Assets"  is,  on  any  date,   the   Borrower's   consolidated,
unrestricted  cash,  cash  equivalents,   net  billed  accounts  receivable  and
investments  with  maturities  of fewer than 12 months  determined  according to
GAAP.

         "Responsible  Officer" is each of the Chief Executive Officer, the 
President,  the Chief Financial Officer and the Controller of Borrower.

         "Revolving Maturity Date" is October 15, 1999.

         "Schedule" is any attached schedule of exceptions.

         "Subordinated  Debt"  is debt  incurred  by  Borrower  subordinated  to
Borrower's debt to Bank (and identified as subordinated by Borrower and Bank).

         "Subsidiary"  is for any Person,  or any other business entity of which
more  than  50% of the  voting  stock  or  other  equity  interests  is owned or
controlled,  directly or indirectly,  by the Person or one or more Affiliates of
the Person.

         "Tangible Net Worth" is, on any date, the consolidated  total assets of
Borrower  and its  Subsidiaries  minus,  (i)  any  amounts  attributable  to (a)
goodwill,  (b) intangible  items such as unamortized  debt discount and expense,
Patents,  trade and  service  marks  and  names,  Copyrights  and  research  and
development  expenses  except  prepaid  expenses,  and (c)  reserves not already
deducted from assets, and (ii) Total Liabilities plus Subordinated Debt.

         "Total Liabilities" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness,  and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.


BORROWER:

Optika Imaging Systems, Inc.


By:

Title:


BANK:

SILICON VALLEY BANK


By:

Title:


<PAGE>


                               EXHIBIT A


         The Collateral  consists of all of Borrower's right, title and interest
in and to the following:

         All goods and  equipment  now owned or hereafter  acquired,  including,
without limitation, all machinery,  fixtures, vehicles (including motor vehicles
and trailers),  and any interest in any of the foregoing,  and all  attachments,
accessories,   accessions,   replacements,    substitutions,    additions,   and
improvements to any of the foregoing, wherever located;

         All  inventory,  now owned or hereafter  acquired,  including,  without
limitation,  all  merchandise,  raw  materials,  parts,  supplies,  packing  and
shipping  materials,  work in  process  and  finished  products  including  such
inventory  as is  temporarily  out of  Borrower's  custody or  possession  or in
transit and including any returns upon any accounts or other proceeds, including
insurance  proceeds,  resulting  from  the  sale  or  disposition  of any of the
foregoing and any documents of title representing any of the above;

         All  contract  rights and general  intangibles  now owned or  hereafter
acquired,   including,   without  limitation,   license  agreements,   franchise
agreements,  purchase  orders,  customer lists,  route lists,  claims,  computer
programs, computer discs, computer tapes, literature,  reports, catalogs, design
rights,  income tax refunds,  payments of insurance and rights to payment of any
kind,   specifically  excluding  patents,   trademarks,   copyrights  and  other
intellectual property rights;

         All now existing  and  hereafter  arising  accounts,  contract  rights,
royalties,  license rights and all other forms of obligations  owing to Borrower
arising out of the sale or lease of goods,  the  licensing of  technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance,  guaranties,  and other security therefor,  as well as
all merchandise returned to or reclaimed by Borrower;

         All  documents,   cash,   deposit  accounts,   securities,   securities
entitlements,  securities  accounts,  investment  property,  letters  of credit,
certificates  of deposit,  instruments  and chattel paper now owned or hereafter
acquired and Borrower's Books relating to the foregoing;

         All Borrower's  Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all  substitutions  for,  additions
and accessions to and proceeds thereof.



<PAGE>


                                    EXHIBIT B

                   LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

              DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.


TO:  CENTRAL CLIENT SERVICE DIVISION               DATE:

FAX#:  (408) 496-2426                               TIME:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FROM:  Optika Imaging Systems, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                            CLIENT NAME (BORROWER)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REQUESTED BY:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                            AUTHORIZED SIGNER'S NAME
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
AUTHORIZED SIGNATURE:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PHONE NUMBER:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FROM ACCOUNT #                                        TO ACCOUNT #
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
REQUESTED TRANSACTION TYPE                  REQUESTED DOLLAR AMOUNT

--------------------------------------------------------------------------------
PRINCIPAL INCREASE (ADVANCE)                                  $
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRINCIPAL PAYMENT (ONLY)                                      $
--------------------------------------------------------------------------------
INTEREST PAYMENT (ONLY)                                       $
--------------------------------------------------------------------------------
PRINCIPAL AND INTEREST (PAYMENT)                              $
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER INSTRUCTIONS:
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
All Borrower's representations and warranties in the Loan and Security Agreement
are true,  correct  and  complete  in all  material  respects on the date of the
telephone request for and Advance confirmed by this Borrowing  Certificate;  but
those  representations and warranties  expressly referring to another date shall
be true, correct and complete in all material respects as of that date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                  BANK USE ONLY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
TELEPHONE REQUEST:

The following  person is  authorized  to request the loan payment  transfer/loan
advance on the advance designated account and is known to me.

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                  Authorized Requester                              Phone #
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                  Received By (Bank)                                Phone #
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                 Authorized Signature (Bank)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2

<PAGE>








                                    EXHIBIT C
                             COMPLIANCE CERTIFICATE


TO:               SILICON VALLEY BANK
                  3003 Tasman Drive
                  Santa Clara, CA 95054

FROM:             OPTIKA IMAGING SYSTEMS, INC.


         The  undersigned  authorized  officer of Optika Imaging  Systems,  Inc.
("Borrower")  certifies  that  under the terms  and  conditions  of the Loan and
Security Agreement between Borrower and Bank (the "Agreement"),  (i) Borrower is
in complete compliance for the period ending  _______________  with all required
covenants except as noted below and (ii) all  representations  and warranties in
the  Agreement  are true and  correct  in all  material  respects  on this date.
Attached are the required documents  supporting the  certification.  The Officer
certifies  that  these  are  prepared  in  accordance  with  Generally  Accepted
Accounting  Principles (GAAP)  consistently  applied from one period to the next
except  as  explained  in an  accompanying  letter  or  footnotes.  The  Officer
acknowledges  that  no  borrowings  may be  requested  at any  time  or  date of
determination  that Borrower is not in  compliance  with any of the terms of the
Agreement,  and  that  compliance  is  determined  not  just  at the  date  this
certificate is delivered.

<TABLE>
<CAPTION>
                          
  Please indicate compliance status by circling Yes/No under "Complies" column.

Reporting Covenant                                   Required                                            Complies
<S>                                         <C>                                                        <C>     <C>    

10-Q, 10-K and 8-K + Compliance Cert.        Within 5 days after filing with SEC                        Yes     No
Accounts Receivable agings                   Quarterly within 30 days                                   Yes     No

Financial Covenant                                   Required                  Actual                     Complies

Maintain on a Quarterly Basis:
Minimum Adjusted Quick Ratio                       2.00:1.00                 _____:1.00                 Yes     No
Minimum Tangible Net Worth                         $8,000,000 +
                                                   75% of new equity         $________                  Yes     No
Minimum Cash                                       $3,000,000                $________                  Yes     No
Profitability:                                     Quarterly                 $_________                 Yes     No
Losses not to exceed:                               $500,000 for the fiscal quarter ending December     Yes     No
                                                    31, 1998; $400,000 for the fiscal quarter ending
                                                    March 31, 1999; and $250,000 for the fiscal
                                                    quarter ending June 30, 1999.

</TABLE>

--------------------------------------------------------------------------------
                    BANK USE ONLY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Received by:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                  AUTHORIZED SIGNER
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Date:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Verified:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                  AUTHORIZED SIGNER
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Date:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Compliance Status:                        Yes     No
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
Comments Regarding Exceptions:  See Attached.


Sincerely,


Optika Imaging Systems, Inc.


SIGNATURE


TITLE


DATE


<PAGE>





[GRAPHIC OMITTED]
                               SILICON VALLEY BANK


                       PRO FORMA INVOICE FOR LOAN CHARGES



BORROWER:                           Optika Imaging Systems, Inc.

LOAN OFFICER:              Frank Amoroso

DATE:                               October 15, 1998


                        Revolving Loan Fee                           $15,000.00
                        Credit Report                                     35.00
                        Documentation Fee                              1,650.00

                        TOTAL FEE DUE                                $16,685.00



Please indicate the method of payment:

         {   }   A check for the total amount is attached.

         {   }   Debit DDA # __________________ for the total amount.

         {   }   Loan proceeds

Borrower:

By:
     (Authorized Signer)




Silicon Valley Bank                  (Date)
Account Officer's Signature



<PAGE>


                                                     

                            NEGATIVE PLEDGE AGREEMENT

     This  Negative  Pledge  Agreement  is made as of  October  15,  1998 by and
between  Optika  Imaging  Systems,  Inc.  ("Borrower")  and Silicon  Valley Bank
("Bank").

In connection with, among other documents,  the Loan and Security Agreement (the
"Loan  Documents")  being  concurrently  executed  herewith between Borrower and
Bank, Borrower agrees as follows:

         1.       Borrower, other than in its ordinary course of business, shall
                  not sell, transfer,  assign, mortgage,  pledge, lease, grant a
                  security   interest   in,  or  encumber   any  of   Borrower's
                  intellectual  property,  including,  without  limitation,  the
                  following:

                  a.       Any and all copyright rights, copyright applications,
                           copyright  registrations and like protections in each
                           work  or  authorship  and  derivative  work  thereof,
                           whether  published or unpublished  and whether or not
                           the same  also  constitutes  a trade  secret,  now or
                           hereafter existing, created, acquired or held;

                  b.       All mask works or similar  rights  available  for the
                           protection  of  semiconductor  chips,  now  owned  or
                           hereafter acquired;

                  c.       Any  and  all   trade   secrets,   and  any  and  all
                           intellectual property rights in computer software and
                           computer software products now or hereafter existing,
                           created, acquired or held;

                  d.       Any and all design  rights  which may be available to
                           Borrower now or hereafter existing, created, acquired
                           or held;

                  e.       All patents, patent applications and like protections
                           including,    without    limitation,    improvements,
                           divisions,    continuations,    renewals,   reissues,
                           extensions  and  continuations-in-part  of the  same,
                           including  without  limitation the patents and patent
                           applications;

                  f.       Any  trademark  and   servicemark   rights,   whether
                           registered  or  not,  applications  to  register  and
                           registrations of the same and like  protections,  and
                           the  entire  goodwill  of the  business  of  Borrower
                           connected  with and  symbolized  by such  trademarks,
                           including without limitation;

                  g.       Any  and  all  claims  for  damages  by way of  past,
                           present and future infringements of any of the rights
                           included   above,   with  the  right,   but  not  the
                           obligation,  to sue for and collect  such damages for
                           said use or infringement of the intellectual property
                           rights identified above;

                  h.       All  licenses  or  other  rights  to  use  any of the
                           Copyrights,  Patents,  Trademarks or Mask Works,  and
                           all license fees and royalties  arising from such use
                           to the extent  permitted  by such  license or rights;
                           and

                  i.       All amendments,  extensions,  renewals and extensions
                           of any of the  Copyrights,  Trademarks,  Patents,  or
                           Mask Works; and

                  j.       All proceeds and products of the foregoing, including
                           without  limitation all payments  under  insurance or
                           any  indemnity or warranty  payable in respect of any
                           of the foregoing;

         2.       It  shall  be an event of  default  under  the Loan  Documents
                  between  Borrower and Bank if there is a breach of any term of
                  this Negative Pledge Agreement.

         3. Capitalized  terms used but not otherwise  defined herein shall have
the same meaning as in the Loan Documents.

BORROWER:

Optika Imaging Systems, Inc.


By:
Name:
Title:


BANK:

SILICON VALLEY BANK


By:
Name:
Title:



<PAGE>


                         CORPORATE BORROWING RESOLUTION

Borrower: Optika Imaging Systems, Inc.    Bank: Silicon Valley Bank
          7450 Campus Drive, 2nd Floor          4430 Arapahoe Ave., Ste. 225
          Colorado Springs, CO 80920            Boulder, CO 80303

I, the undersigned  Secretary or Assistant  Secretary of Optika Imaging Systems,
Inc. ("Borrower"),  HEREBY CERTIFY that Borrower is a corporation duly organized
and existing under and by virtue of the laws of the State of Delaware.

I FURTHER  CERTIFY  that at a meeting of the  Directors of Borrower (or by other
duly authorized corporate action in lieu of a meeting), duly called and held, at
which a quorum was present and voting, the following resolutions were adopted.

     BE IT  RESOLVED,  that  any  one  (1)  of  the  following  named  officers,
employees, or agents of Borrower, whose actual signatures are shown below


      NAMES                   POSITIONS                ACTUAL SIGNATURES

--------------------  ------------------------- ------------------------------
--------------------  ------------------------- ------------------------------
--------------------  ------------------------- ------------------------------
--------------------  ------------------------- ------------------------------



     acting for and on behalf of  Borrower  and as its act and deed be, and they
hereby are, authorized and empowered:

         Borrow  Money.  To borrow  from time to time from  Silicon  Valley Bank
         ("Bank"),  on such terms as may be agreed upon  between the officers of
         Borrower  and  Bank,  such sum or sums of  money  as in their  judgment
         should be borrowed.

         Execute  Loan  Documents.  To  execute  and  deliver  to Bank  the loan
         documents of Borrower,  on Bank's forms,  at such rates of interest and
         on such terms as may be agreed  upon,  evidencing  the sums of money so
         borrowed or any  indebtedness  of Borrower to Bank, and also to execute
         and deliver to Bank one or more  renewals,  extensions,  modifications,
         refinancings,  consolidations,  or substitutions for one or more of the
         loan documents, or any portion of the loan documents.

         Grant  Security.  To  grant  a  security  interest  to  Bank in any of
         Borrower's  assets,  which  security  interest  shall  secure  all  of
         Borrower's obligations to Bank

         Negotiate Items. To draw,  endorse,  and discount with Bank all drafts,
         trade acceptances, promissory notes, or other evidences of indebtedness
         payable to or  belonging  to Borrower or in which  Borrower may have an
         interest,  and  either to  receive  cash for the same or to cause  such
         proceeds to be credited  to the  account of Borrower  with Bank,  or to
         cause such other  disposition of the proceeds derived therefrom as they
         may deem advisable.

         Letters of Credit.  To execute letter of credit  applications and other
         related documents pertaining to Bank's issuance of letters of credit.

         Further Acts. In the case of lines of credit,  to designate  additional
         or  alternate  individuals  as being  authorized  to  request  advances
         thereunder,  and in all cases,  to do and  perform  such other acts and
         things,  to pay any and all fees and costs,  and to execute and deliver
         such other documents and agreements,  including  agreements waiving the
         right  to a  trial  by  jury,  as they  may in  their  discretion  deem
         reasonably  necessary  or  proper  in order to carry  into  effect  the
         provisions of these Resolutions.

BE IT  FURTHER  RESOLVED,  that any and all acts  authorized  pursuant  to these
Resolutions and performed  prior to the passage of these  resolutions are hereby
ratified and  approved,  that these  Resolutions  shall remain in full force and
effect  and Bank may rely on these  Resolutions  until  written  notice of their
revocation  shall have been  delivered to and received by Bank.  Any such notice
shall not affect any of Borrower's  agreements or  commitments  in effect at the
time notice is given.

I FURTHER  CERTIFY that the persons  named above are  principal  officers of the
Borrower and occupy the positions set opposite their respective  names; that the
foregoing Resolutions now stand of record on the books of the Borrower; and that
they are in full force and effect and have not been  modified  or revoked in any
manner whatsoever.

IN WITNESS  WHEREOF,  I have  hereunto  set my hand on October 15, 1998 and
attest that the signatures set opposite the names listed above are their genuine
signatures.

CERTIFIED TO AND ATTESTED BY:

X ______________________________________________
   *Secretary or Assistant Secretary

X ______________________________________________



*NOTE:  In case the Secretary or other  certifying  officer is designated by the
foregoing  resolutions as one of the signing  officers,  this resolution  should
also be signed by a second Officer or Director of Borrower.