Document:

Exhibit 10(p)

                                                                 [LOGO]Potlatch

Intra Company Memo                                      Potlatch Corporation

Date:        March 9, 2002

To:          Phil Baker                                            CONFIDENTIAL

From:        Penn Siegel

Subject:     Special Severance Arrangement - Sale of the Minnesota Pulp and
Paper Division

Solely in connection with the sale of the Minnesota Pulp and Paper Division,
the severance benefit specified below will be delivered to you should your
employment terminate under the circumstances and within the time frame
described below. This information is confidential.
SEVERANCE BENEFITS
If your employment terminates under the conditions described below you are
entitled to the following benefits in lieu of any benefits provided under any
other severance program administered by Potlatch Corporation to which you may
have been entitled.

     (a)     A lump sum equal to your base salary plus your standard bonus
             under the Management Performance Award Plan in effect at the time
             of your termination from Potlatch multiplied by a factor of 2.5.
     (b)     Standard medical and dental coverage at the level in effect at
             Potlatch at the time you elect coverage under this arrangement.
             The premium will be paid by Potlatch.
     (c)     Basic term life insurance benefits. This benefit will be in the
             amount you had in effect on the day preceding your termination of
             employment with Potlatch. The premium will be paid by Potlatch.

Your rights to benefits under all other Potlatch benefit plans will be in
accordance with the terms of such plans, consistent with your termination date
from Potlatch Corporation.

The severance benefit described in (a) above will be offset by any severance
benefit paid to you by the purchaser of the Minnesota Pulp and Paper Division.
Benefits under (b) and (c) above will be effective following the conclusion of
any applicable benefit extension period provided to you by the purchaser of the
Minnesota Pulp and Paper Division and remain in effect for the number of years
equal to the factor referred to in (a) above (commencing on your termination
date from the purchaser) or your eligibility for coverage by another employer's
                         --
group health and life plan if earlier.

Potlatch will require acceptable evidence of your termination and the benefits
available to you from the purchaser of the Minnesota Pulp and Paper Division,
attested to by an authorized representative of the purchaser.

<PAGE>

If your employment with Potlatch Corporation or the purchaser of the Minnesota
Pulp and Paper Division terminates for any reason other than as specifically
described below, you will not be eligible for the benefits described above.

CONDITIONS FOR PAYMENT OF SEVERANCE BENEFITS
     (a)     Within 36 months of the date of the sale, your employment is
             terminated by the purchaser of the Minnesota Pulp and Paper
             Division for reasons other than misconduct/1/, or by you at the
             purchaser's request, for reasons other than misconduct;
     (b)     Within 36 months of the date of the sale, the purchaser requires
             you to relocate to a work location at least 50 miles or more
             further from your primary residence than was the former work
             location and you resign rather than relocate;
             You are entitled to the benefits under (a) and (b) above only if
             you give written notice within one month of your termination date
                                            ---------
             to Potlatch Corporation/2/.
     (c)     Within 36 months of the date of the sale, there is a material
             change in your compensation, benefits, assigned duties, and
             responsibilities resulting in a significant diminution of your
             assigned job as reflected in the official position description or
             in your compensation, benefits, assigned duties and
             responsibilities and you resign your position within 24 months of
             this material change.
             You are entitled to benefits under (c) above only if you give
             written notice to Potlatch Corporation within one month after a
                                                           ---------
             change has occurred stating that you believe the change falls
             under this provision. In addition, effective with your
             resignation, you are entitled to the benefits only if you give
             written notice within one month of your termination date to
                                   ---------
             Potlatch Corporation.

FORM OF BENEFIT
The severance benefit will be paid as a lump sum as soon as administratively
practicable after you have met the requirements for eligibility and have
submitted all required documentation requested by Potlatch Corporation.

You have the right to designate a beneficiary or beneficiaries to receive this
benefit in the event of your death after you have satisfied the eligibility
requirements for the benefit, but before it has been paid to you. If you do not
designate any beneficiary, the beneficiary will be deemed to be your estate.

-------------------------
/1/ Misconduct means that you have engaged in unfair competition, induced any
customer to breach any contract, made any unauthorized disclosure of any of the
secrets or confidential information of Potlatch Corporation, Potlatch
Corporation's successor, or the purchaser of the Minnesota Pulp and Paper
Division, committed acts of embezzlement, fraud or theft with respect to the
property of Potlatch Corporation or the purchaser of the Minnesota Pulp and
Paper Division, or you engaged in conduct which is not in good faith and which
directly results in material loss, damage or injury to the business, reputation
or employees of Potlatch Corporation, or the purchaser of the Minnesota Pulp
and Paper Division.

/2/ Communication regarding your benefits under this arrangement should be
directed to Potlatch Corporation, Vice President Human Resources, Potlatch
Corporation, Suite 1100, 601 West Riverside Avenue, Spokane, Washington 99201.

<PAGE>

TAXES
The severance benefit will be subject to taxation at the time it is paid.  The
lump sum payment will be subject to all applicable withholding and employment
taxes. Potlatch Corporation has the right to subtract and withhold these
amounts from your payment. If the severance payment becomes subject to the
additional Internal Revenue Code Section 4999 excise tax, Potlatch shall pay
you an additional grossed-up amount to cover the payment excise tax.

CLAIMS AND APPEALS PROCEDURE
If a claim for benefits is denied or a dispute arises under this arrangement,
you may appeal to Potlatch Corporation's internal review panel. In case of a
dispute over conditions for payment of severance benefits, you may appeal the
review panel's decision to an arbitrator. The arbitrator is selected by mutual
agreement or, of the parties cannot agree on such selection, by the American
Arbitration Association. Costs of the arbitrator are paid by Potlatch
Corporation unless the arbitrator allocates costs to you based on a finding
that your appeal was willful and malicious.

This benefit may be amended, terminated or suspended at any time with the
written consent of both parties. This arrangement will be binding on any
successors in interest to Potlatch Corporation. This arrangement has no effect
upon the terms or conditions of your employment. No provision in this
arrangement shall be construed as having created a contract of employment
between you and Potlatch Corporation or the purchaser of the Minnesota Pulp and
Paper Division. The benefits under this arrangement shall not be subject to
sale, transfer, assignment, pledge or encumbrance by you or your beneficiary
and any attempt to do so shall be null and void. These benefits shall not be
subject to or liable for the debts, contracts, liabilities, or torts of you or
your beneficiary, nor may the benefits be subject to attachment, garnishment,
or seizure by any creditor of you or your beneficiary under any circumstances.
The benefits payable under this agreement shall be paid solely from the general
assets of Potlatch Corporation. This agreement does not create a trust. Your
(or your beneficiary's) right to receive benefits under this agreement are
those of an unsecured claim against the general assets of Potlatch Corporation.

This agreement constitutes the entire agreement between you and Potlatch
Corporation regarding this deferred compensation arrangement, and all previous
agreements, either oral or written, are superseded by this agreement. This
agreement shall be governed by the laws of the state of Minnesota. The parties
agree to the terms and conditions set forth above.

POTLATCH CORPORATION                                      EMPLOYEE NAME

___________________                                       ____________________
Penn Siegel                                               Phillip M. Baker
Chairman and Chief Executive Officer

___________________                                       ____________________
Print Name                                                Print Name

___________________                                       ____________________
Date                                                      Date<PAGE>

                                                                   Exhibit 10.13

   07-30-2001                        PROMISSORY NOTE                      Page 2
   Loan No 733/18-                     (Continued)

================================================================================

   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 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,
   accomodation maker or endorsor, 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:

   CAPTARIS, INC.

   By: [SIGNATURE ILLEGIBLE]
      -----------------------------------
      AUTHORIZED OFFICER, TITLE C.F.O.

   LENDER:

   U.S. Bank National Association

   By: /s/ Christine M. Bomgardner, V.P.
      -----------------------------------
      Authorized Officer

================================================================================

<PAGE>

07-30-2001                   BUSINESS LOAN AGREEMENT                      Page 4
Loan No 733/18-                   (Continued)

================================================================================

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; (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

DISCLOSURE. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.

ACCESS LAWS. Without limiting the generality of any provision of this agreement
requiring Borrower to comply with applicable laws, rules and regulations,
Borrower agrees that it will at all times comply with applicable laws relating
to disabled access including, but not limited to, all applicable titles of the
Americans with Disabilities Act of 1990.

REPORTING REQUIREMENTS - INTERIM FINANCIAL STATEMENTS. Borrower covenants and
agrees with Lender that, while this Agreement is in effect, Borrower will
furnish to Lender the following:

As soon as available, but in no event later than ninety (90) days after the end
of each quarter, Form 10Q for such quarterly period.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's account with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the indebtedness against any and all such accounts.

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

     Default on Indebtedness. Failure of Borrower to make any payment when due
     on the Loans.

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

     Default in Favor of Third Parties. Should Borrower or any Grantor default
     under any loan, extension of credit, security agreement, purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect any of Borrower's property or Borrower's or any
     Grantor's ability to repay the Loans or perform their respective
     obligations under this Agreement or any of the Related Documents.

     False Statements. Any warranty, representation or statement made or
     furnished to Lender by or on behalf of Borrower or any Grantor under this
     Agreement or the Related Documents is false or misleading in any material
     respect at the time made or furnished, or becomes false or misleading at
     any time thereafter.

     Defective Collateralization. This Agreement or any of the Related Documents
     ceases to be in full force and effect (including failure of any Security
     Agreement to create a valid and perfected Security Interest) at any time
     and for any reason.

     Insolvency. This dissolution or termination of Borrower's existence as a
     going business, the insolvency of Borrower, the appointment of a receiver
     for any part of Borrower's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against Borrower.

     Creditor or Forfeiture Proceedings. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower, any creditor
     of any Grantor against any collateral securing the Indebtedness, or by any
     governmental agency. This includes a garnishment, attachment, or levy on or
     of any of Borrower's deposit accounts with Lender.

     Events Affecting Guarantor. Any of the preceding events occurs with respect
     to any Guarantor of any of the Indebtedness 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 percent (25%)
     or more of the common stock of Borrower.

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

     Insecurity. Lender, in good faith, deems itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
Loan Advances or disbursements), and, at Lender's option, all indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Lender's right to
declare a default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     Amendments. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to be charged or bound by the alteration or
     amendment.

     Applicable Law. This Agreement has been delivered to Lender and accepted by
     Lender in the State of Washington. If there is a lawsuit, Borrower agrees
     upon Lender's request to submit to the jurisdiction of the courts of King
     County, the State of Washington. 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. This Agreement shall be
     governed by and construed in accordance with the laws of the State of
     Washington.

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

     Multiple Parties; Corporate Authority. All obligations of Borrower under
     this Agreement shall be joint and several, and all references to Borrower
     shall mean each and every Borrower. This means that each of the persons
     signing below is responsible for all obligations in this Agreement.

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

     Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
     expenses, including without limitation attorney's 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 (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 (unless otherwise required
     by law), 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).

<PAGE>

07-30-2001                  BUSINESS LOAN AGREEMENT                      Page 2
Loan No 733/18-                   (Continued)

================================================================================

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

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

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

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

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

     Litigation and Claims. No litigation, claim, investigation, administrative
     proceeding or similar action (including those for unpaid taxes) against
     Borrower is pending or threatened, and no other event has occurred which
     may materially adversely affect Borrower's financial condition or
     properties, other than litigation, claims, or other events, if any, that
     have been disclosed to and acknowledged by Lender in writing.

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

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

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

     Commercial Purposes. Borrower intends to use the Loan proceeds solely for
     business or commercial related purposes.

     Employee Benefit Plans. Each employee benefit plan as to which Borrower may
     have any liability complies in all material respects with all applicable
     requirements of law and regulations, and (i) no Reportable Event nor
     Prohibited Transaction (as defined in ERISA) has occurred with respect to
     any such plan, (ii) Borrower has not withdrawn from any such plan or
     initiated steps to do so, (iii) no steps have been taken to terminate any
     such plan, and (iv) there are no unfunded liabilities other than those
     previously disclosed to Lender in writing.

     Location of Borrower's Offices and Records. Borrower's place of business,
     or Borrower's Chief executive office, if Borrower has more than one place
     of business, is located at 11410 NORTHEAST 122ND WAY, KIRKLAND, WA 98083.
     Unless Borrower has designated otherwise in writing this location is also
     the office or offices where Borrower keeps its records concerning the
     Collateral.

     Information. All information heretofore or contemporaneously herewith
     furnished by Borrower to Lender for the purposes of or in connection with
     this Agreement or any transaction contemplated hereby is, and all
     information hereafter furnished by or on behalf of Borrower to Lender will
     be, true and accurate in every material respect on the date as of which
     such information is dated or certified; and none of such information is or
     will be incomplete by omitting to state any material fact necessary to make
     such information not misleading.

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

AFFIRMATIVE COVENANTS. 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.

<PAGE>

                         CORPORATE RESOLUTION TO BORROW

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
   Principal      Loan Date       Maturity       Loan No         Call       Collateral         Account        Officer      Initials
 $4,000,000.00   07-30-2001      08-15-2004      733/18-                       010           0340178007        CMB66
<S>              <C>             <C>             <C>             <C>        <C>    <C>       <C>              <C>          <C>
------------------------------------------------------------------------------------------------------------------------------------
      References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular
      loan or item.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Borrower: CAPTARIS, INC.               LENDER: U.S. Bank National Association
          11410 NORTHEAST 122ND WAY            South Seattle Corporate Banking
          KIRKLAND, WA 98083                   1420 Fifth Avenue
                                               Seattle, WA 96101

================================================================================

I, the undersigned Secretary or Assistant Secretary of CAPTARIS, INC. (the
"Corporation"), HEREBY CERTIFY that the Corporation is organized and existing
under and by virtue of the laws of the State of Washington as a corporation for
profit, with its principal office at 11410 NORTHEAST 122ND WAY, KIRKLAND, WA
98083, and is duly authorized to transact business in the State of Washington.

I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held on July 30, 2001, at which a quorum was present and voting, or
by other duly authorized corporate action in lieu of a meeting, the following
resolutions were adopted:

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

        NAMES                    POSITIONS                ACTUAL SIGNATURES
        -----                    ---------                -----------------

        DAVID P. ANASTASI        PRESIDENT/CHIEF          /s/ David P. Anastasi
                                 EXECUTIVE OFFICER        ---------------------

        JEFF B. deCILLIA         CHIEF FINANCIAL OFFICER  /s/ Jeff B. deCillia
                                                          --------------------

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

     Borrow Money. To borrow from time to time from U.S. Bank National
     Association ("Lender"), on such terms as may be agreed upon between the
     Corporation and Lender, such sum or sums of money as in their judgment
     should be borrowed, without limitation.

     Execute Notes. To execute and deliver to Lender the promissory note or
     notes, or other evidence of credit accomodations of the Corporation, on
     Lender'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 the Corporation to Lender, and also to execute and deliver to Lender one
     or more renewals, extensions, modifications, refinancings, consolidations,
     or substitutions for one or more of the notes, any portion of the notes, or
     any other evidence of credit accomodations.

     Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
     otherwise encumber and deliver to Lender, as security for the payment of
     any loans or credit accomodations so obtained, any promissory notes so
     executed (including any amendments to or modifications, renewals, and
     extensions of such promissory notes), or any other or further indebtedness
     of the Corporation to Lender at any time owing, however the same may be
     evidenced, any property now or hereafter belonging to the Corporation or in
     which the Corporation now or hereafter may have an interest, including
     without limitation all real property and all personal property (tangible or
     intangible) of the Corporation. Such property may be mortgaged, pledged,
     transferred, endorsed, hypothecated, or encumbered at the time such loans
     are obtained or such indebtedness is incurred, or at any other time or
     times, and may be either in addition to or in lieu of any property
     theretofore mortgaged, pledged, transferred, endorsed, hypothecated, or
     encumbered.

     Execute Security Documents. To execute and deliver to Lender the forms of
     mortgage, deed of trust, pledge agreement, hypothecation agreement, and
     other security agreements and financing statements which may be submitted
     by Lender, and which shall evidence the terms and conditions under and
     pursuant to which such liens and encumbrances, or any of them, are given;
     and also to execute and deliver to Lender any other written instruments,
     any chattel paper, or any other collateral, of any kind or nature, which
     they may in their discretion deem reasonably necessary or proper in
     connection with or pertaining to the giving of the liens and encumbrances.

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

     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 Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation, (d) change in the authorized signer(s), (e)
conversion of the Corporation to a new or different type of business entity, or
(f) change in any other aspect of the Corporation that directly or indirectly
relates to any agreements between the Corporation and Lender. No change in the
name of the Corporation will take effect until after Lender has been notified.

I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set opposite their respective names; that the foregoing
Resolutions now stand of record on the books of the Corporation; and that the
Resolutions are in full force and effect and have not been modified or revoked
in any manner whatsoever. The Corporation has no corporate seal, and therefore,
no seal is affixed to this certificate.

IN TESTIMONY WHEREOF, I have hereunto set my hand on July 30, 2001 and attest
that the signatures set opposite the names listed above are their genuine
signatures.

                                        CERTIFIED TO AND ATTESTED BY:

                                        X /s/ [ILLEGIBLE]
                                         ---------------------------------

                                        X /s/ Lisa M. Dickson
                                         ---------------------------------

NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, it is advisable to have
this certificate signed by a second Officer or Director of the Corporation.

================================================================================

<PAGE>

[LOGO] US Bank

                            BUSINESS LOAN AGREEMENT

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
     Principal     Loan Date     Maturity      Loan No     Call     Collateral     Account     Officer     Initials
  $4,000,000.00    07-30-2001   08-15-2004     733/18-                 010       0340178007     CMB66
--------------------------------------------------------------------------------------------------------------------
<S>                <C>          <C>            <C>         <C>       <C>         <C>           <C>         <C>

        References in the shaded area are for Lender's use only and do not limit the applicability of this document
                        to any particular loan or item.
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Borrower: CAPTARIS, INC.                Lender: U.S. Bank National Association
          11410 NORTHEAST 122ND WAY             South Seattle Corporate Banking
          KIRKLAND, WA 98083                    1420 Fifth Avenue
                                                Seattle, WA 98101

================================================================================

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

TERM. This Agreement shall be effective as of July 30, 2001, 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 CAPTARIS, INC.. 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 without limitation
     all Loans, together with all other obligations, debts and liabilities of
     Borrower to Lender, or any one or more of them, as well as all claims by
     Lender against Borrower, or any one or more of them; whether now or
     hereafter existing, voluntary or involuntary, due or not due, absolute or
     contingent, liquidated or unliquidated; whether Borrower may be liable
     individually or jointly with others; whether Borrower may be obligated as a
     guarantor, surety, or otherwise; whether recovery upon such Indebtedness
     may be or hereafter may become barred by any statute of limitations; and
     whether such Indebtedness may be or hereafter may become otherwise
     unenforceable.

     Lender. The word "Lender" means U.S. Bank National Association, its
     successors and assigns.

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

     Loan. The word "Loan" or "Loans" means and includes without limitation any
     and all commercial loans and financial accommodations from Lender to
     Borrower, whether now or hereafter existing, and however evidenced,
     including without limitation those loans and financial accommodations
     described herein or described on any exhibit or schedule attached to this
     Agreement from time to time.

     Note. The word "Note" means and includes without limitation Borrower's
     promissory note or notes, if any, evidencing Borrower's Loan obligations in
     favor of Lender, as well as any substitute, replacement or refinancing note
     or notes therefor.

     Permitted Liens. The words "Permitted Liens" mean: (a) liens and security
     interests securing Indebtedness owed by Borrower to Lender; (b) liens for
     taxes, assessments, or similar charges either not yet due or being
     contested in good faith; (c) liens of materialmen, mechanics, warehousemen,
     or carriers, or other like liens arising in the ordinary course of business
     and securing obligations which are not yet delinquent; (d) purchase money
     liens or purchase money security interests upon or in any property acquired
     or held by Borrower in the ordinary course of business to secure
     indebtedness outstanding on the date of this Agreement or permitted to be
     incurred under the paragraph of this Agreement titled "Indebtedness and
     Liens"; (e) liens and security interests which, as of the date of this
     Agreement, have been disclosed to and approved by the Lender in writing;
     and (f) those liens and security interests which in the aggregate
     constitute an immaterial and insignificant monetary amount with respect to
     the net value of Borrower's assets.

     Related Documents. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the indebtedness.

     Security Agreement. The words "Security Agreement" mean and include
     without limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract, or
     otherwise, evidencing, governing, representing, or creating a Security
     Interest.

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

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

     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.

<PAGE>

07-30-2001                  BUSINESS LOAN AGREEMENT                       Page 3
Loan No 733/18-                   (Continued)

================================================================================

     Financial Statements. Furnish Lender with, as soon as available, but in no
     event later than one hundred twenty (120) days after the end of each fiscal
     year, Borrower's balance sheet and income statement for the year ended,
     audited by a certified public accountant satisfactory to Lender, and, as
     soon as available, but in no event later than ninety (90) days after the
     end of each fiscal quarter, Borrower's balance sheet and profit and loss
     statement for the period ended, prepared and certified as correct to the
     best knowledge and belief by Borrower's chief financial officer or other
     officer or person acceptable to Lender. All financial reports required to
     be provided under this Agreement shall be prepared in accordance with
     generally accepted accounting principles, applied on a consistent basis,
     and certified by Borrower as being true and correct.

     Additional Information. Furnish such additional information and statements,
     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:

          Tangible Net worth. Maintain a minimum Tangible Net Worth of not less
          than $50,000,000.00.

          Net Worth Ratio. Maintain a ratio of Total Liabilities to Tangible Net
          Worth of less than 0.50. to 1.00.

          Working Capital. Maintain Working Capital in excess of $10,000,000.00.

     The following provisions shall apply for purposes of determining compliance
     with the foregoing financial covenants and ratios:

     Compliance with all covenants and ratios shall be determined by calculating
     the ratios/amounts as of the end of each fiscal quarter. 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.

     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.

     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
     not required and at the time of each disbursement of Loan proceeds with a
     certificate executed by Borrower's chief financial officer, or other
     officer or person acceptable to Lender, certifying that the representations
     and warranties set forth in this Agreement are true and correct as of the
     date of the certificate and further certifying that, as of the date of the
     certificate, no Event of Default exists under this Agreement.

     Environmental Compliance and Reports. Borrower shall comply in all respects
     with all environmental protection federal, state and local laws, statutes,
     regulations and ordinances; not cause or permit to exist, as a result of an
     intentional or unintentional action or omission on its part or on the part
     of any third party, on property owned and/or occupied by Borrower, any
     environmental activity where damage may result to the environment, unless
     such environmental activity is pursuant to and in compliance with the
     conditions of a permit issued by the appropriate federal state or local
     governmental authorities; shall furnish to Lender promptly and in any event
     within thirty (30) days after receipt thereof a copy of any notice,
     summons, lien, 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.

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,
     including capital leases, (b) except as allowed as a Permitted Lien, sell,
     transfer, mortgage, assign, pledge, lease, grant a security interest in, or
     encumber any of Borrower's assets, or (c) sell with recourse any of
     Borrower's accounts, except to Lender.

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

     Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money or
     assets, (b) purchase, create or acquire any interest in any other
     enterprise or entity, or (c) incur any obligation as 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

<PAGE>

07-30-2001                  BUSINESS LOAN AGREEMENT                       Page 5
Loan No 733/18-                   (Continued)

================================================================================

     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.

     Waiver. Lender shall not be deemed to have waived any rights under this
     Agreement unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender of
     a provision of this Agreement shall not prejudice or constitute a waiver of
     Lender's right otherwise to demand strict compliance with that provision or
     any other provision of this Agreement. No prior waiver by Lender, nor any
     course of dealing between Lender and Borrower, or between Lender and any
     Grantor, shall constitute a waiver of any of Lender's rights or of any
     obligations of Borrower or of any Grantor as to any future transactions.
     Whenever the consent of Lender is required under this Agreement, the
     granting of such consent by Lender in any instance shall not constitute
     continuing 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 THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF JULY
30, 2001.

BORROWER:

CAPTARIS, INC.

By: /s/ [ILLEGIBLE]
   -------------------------------
   AUTHORIZED OFFICER, TITLE C.F.O.
                            --------

LENDER:

U.S. Bank National Association

By: /s/ Christine M. Bomgardner, V.P.
   ----------------------------------
   Authorized Officer

================================================================================

<PAGE>

[LOGO] US bank

                                PROMISSORY NOTE

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
   Principal      Loan Date       Maturity       Loan No         Call       Collateral         Account        Officer      Initials
 $4,000,000.00   07-30-2001      08-15-2004      733/18-                       010           0340178007        CMB66
<S>             <C>             <C>             <C>             <C>        <C>              <C>              <C>          <C>
------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan
or item.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Borrower: CAPTARIS, INC.               Lender: U.S. Bank National Association
          11410 NORTHEAST 122ND WAY            South Seattle Corporation Banking
          KIRKLAND, WA 98083                   1420 Fifth Avenue
                                               Seattle, WA 98101

================================================================================

   Principal Amount: $4,000,000.00                   Date of Note: July 30, 2001

   PROMISE TO PAY. CAPTARIS, INC. ("Borrower") promises to pay to U.S. Bank
   National Association ("Lender"), or order, in lawful money of the United
   States of America, the principal amount of Four Million & 00/100 Dollars
   ($4,000,000.00) 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 August 15, 2004. In addition,
   Borrower will pay regular monthly payments of accrued unpaid interest
   beginning August 15, 2001, and all subsequent interest payments are due on
   the same day of each month after that. The annual interest rate for this Note
   is computed on a 365/360 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.

   VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
   from time to time based on changes in an independent index which is the index
   or indices selected by the Borrower from time to time, pursuant to and as
   described in, the paragraph in this Note titled "INTEREST RATE OPTIONS" (the
   "Available Rates"), one of which Available Rates is referred to therein as
   the "prime rate" (the "Index"). The index is not necessarily the lowest rate
   charged by Lender on its loans. If the Index becomes unavailable during the
   term of this loan, Lender may designate a substitute index after notice to
   Borrower. Lender will tell Borrower the current index rate upon Borrower's
   request. Borrower understands that Lender may make loans based on other rates
   as well. The interest rate change will not occur more often than each day on
   which the index and/or other(s) of the Available Rates then applicable to
   amounts outstanding under this Note, pursuant to the "INTEREST RATE OPTIONS"
   paragraph below, changes. Lender will also tell Borrower the current rate as
   to any other(s) of the Available Rates then applicable. Borrower understands
   that the information set out in the following sentence is applicable only to
   the extent that the "prime rate" is the applicable rate, and that the
   interest rate(s) to be applied to the unpaid principal balance of this Note
   may be at a rate(s) of different percentage points over the Applicable Rate
   then applicable. The interest rate to be applied to the unpaid principal
   balance of this Note will be at a rate equal to the index. NOTICE: Under no
   circumstances will the interest rate on this Note be more than the maximum
   rate allowed by applicable law.

   PREPAYMENT PENALTY. 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.

   Upon prepayment of this Note, Lender is entitled to the following prepayment
   penalty: PLEASE SEE THE DEFINITION OF "INTEREST DIFFERENTIAL" IN THE INTEREST
   RATE OPTIONS PARAGRAPH OF THE INTEREST RATE RIDER ATTACHED HERETO AND
   INCORPORATED HEREIN BY REFERENCE. Except for the foregoing, Borrower may pay
   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) Borrower is in default under any other note, security
   agreement, lease agreement or lease schedule, loan agreement or other
   agreement, whether now existing or hereafter made, between Borrower and U.S.
   Bancorp or any direct or indirect subsidiary of U.S. Bancorp. (g) 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. (h) Any guarantor dies or any of the other events
   described in this default section occurs with respect to any guarantor of
   this Note. (i) A material adverse change occurs in Borrower's financial
   condition, or Lender believes the prospect of payment or performance of the
   indebtedness is impaired. (j) Lender in good faith deems itself insecure.

   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 default, including
   failure to pay upon final maturity, Lender, at its option, may also, if
   permitted under applicable law, increase the variable interest rate on this
   Note to 5.000 percentage points over the index. The interest rate will not
   exceed the maximum rate permitted  by applicable law. 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. If not prohibited by applicable law, 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 Washington.
   If 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. If not prohibited by applicable law, 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 Washington.
   If there is a lawsuit, Borrower agrees upon Lender's request to submit to the
   jurisdiction of the courts of King County, the State of Washington. Lender
   and Borrower hereby waive the right to any jury trial in any action,
   proceeding, or counterclaim brought by either Lender of Borrower against the
   other. This Note shall be governed by and construed in accordance with the
   laws of the State of Washington.

   RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest
   in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender
   all Borrower's right, title and interest in and to, Borrower's accounts with
   Lender (whether checking, savings, or some other account), including without
   limitation all accounts held jointly with someone else and all accounts
   Borrower may open in the future, excluding however all IRA and Keogh
   accounts, and all trust accounts for which the grant of a security interest
   would be prohibited by law. Borrower authorizes Lender, to the extent
   permitted by applicable law, to charge or setoff all sums owing on this Note
   against any and all such accounts.

   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; (d) Borrower has applied funds
   provided pursuant to this Note for purposes other than those authorized by
   Lender; or (e) Lender in good faith deems itself insecure under this Note or
   any other agreement between Lender and Borrower.

   LATE CHARGE. If a payment is 15 days or more past due, Borrower will be
   charged a late charge of 5% of the delinquent payment.

   DISCLOSURE. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
   FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
   WASHINGTON LAW.

   RENEWAL AND EXTENSION. This Note is given in renewal and extension and not in
   novation of the following described indebtedness. That certain Promissory
   Note dated August 15, 1999, in the amount of $4,000,000.00 executed by
   Borrower payable to Lender.

   INTEREST RATE RIDER. An exhibit, titled "INTEREST RATE RIDER," is attached to
   this Note and by this reference is made a part of this Note just as if all
   the provisions, terms and conditions of the Exhibit had been fully set forth
   in this Note.

<PAGE>

                               INTEREST RATE RIDER

   =========================================================================

Borrower: CAPTARIS, INC.                Lender: U.S. Bank National Association
          11410 NORTHEAST 122ND                 South Seattle Corporate Banking
          WAY                                   1420 Fifth Avenue
          KIRKLAND, WA 98083                    Seattle, WA 98101

   =========================================================================

This INTEREST RATE RIDER is attached to and by this reference is made a part of
each Promissory Note or Credit Agreement, dated July 30, 2001, and executed in
connection with a loan or other financial accommodations between U.S. Bank
National Association and CAPTARIS, INC..

INTEREST RATE OPTIONS. Interest on each advance hereunder shall accrue at one of
the following per annum rates selected by Borrower ("n/a" indicates rate option
is not available, but Prime Rate Loan option must always be selected) (i) upon
notice to the Lender, 0.000% plus the prime rate announced by the Lender from
time to time, as and when such rate changes (a "Prime Rate Loan"); (ii) upon a
minimum of two New York banking days prior notice, 1.500% plus the 1, 2, 3 or 6
month LIBOR rate quoted by the Lender from Telerate Page 3750 or any successor
thereto (which shall be the LIBOR rate in effect two New York banking days prior
to commencement of the LIBOR loan advance) (a "LIBOR Rate Loan"); or (iii) upon
notice to the Lender, N/A% plus the rate, determined solely by the Lender, at
which the Lender would be able to borrow funds of comparable amounts in the
Money Markets for a 1, 3, 6 or 12 month period, including FDIC Insurance,
reserve requirements and other explicit or implicit costs levied by any
regulatory agency (a "Money Market Rate Loan"). The term "Money Markets" refers
to one or more wholesale funding markets available to the Lender, including
negotiable certificates of deposit, commercial paper, eurodollar deposits, bank
notes, federal funds and others. If a LIBOR Rate Loan or Money Market Rate Loan
is prepaid, whether by the Borrower, as a result of acceleration upon default or
otherwise, the Borrower agrees to pay all of the Lender's costs, expenses and
Interest Differential (as determined by the Lender) incurred as a result of such
prepayment. The term "Interest Differential" shall mean that sum equal to the
greater of 0 or the financial loss incurred by the Lender resulting from
prepayment, calculated as the difference between the amount of interest the
Lender would have earned (from like investments in the Money Markets as of the
first day of the LIBOR or Money Market Rate Loan) had prepayment not occurred
and the interest the Lender will actually earn (from like investments in the
Money Markets as of the date of prepayment) as a result of the redeployment of
funds from the prepayment. Because of the short-term nature of this facility,
the Borrower agrees that the Interest Differential shall not be discounted to
its present value. Any prepayment of a LIBOR Rate Loan or Money Market Rate Loan
shall be in an amount equal to the remaining entire principal balance of such
loan. In the event the Borrower does not timely select another interest rate
option at least two banking days before a LIBOR Rate Loan or Money Market Rate
Loan expires, the Lender may at any time thereafter convert the LIBOR Rate Loan
or Money Market Rate Loan to a Prime Rate Loan, but until such conversion, the
funds advanced under the expired LIBOR Rate Loan or Money Market Rate Loan
shall continue to accrue interest at the same rate as the interest rate under
such expired LIBOR Rate Loan or Money Market Rate Loan, as applicable. The
Lender's internal records of applicable interest rates shall be determinative in
the absence of manifest error. Each LIBOR or Money Market rate option selected
shall apply to a minimum principal amount of $100,000. For determining payment
dates for LIBOR Rate Loans, the New York banking day shall be the standard
covention. In the event after the date of initial funding any governmental
authority subjects Lender to any new or additional charge, fee, withholding or
tax of any kind with respect to any loans hereunder or changes the method of
taxation of such loans or changes the reserve or deposit requirements applicable
to such loans, the Borrower shall pay to the Lender such additional amounts as
will compensate the Lender for such costs or lost income resulting therefrom as
reasonably determined by the Lender.

THIS INTEREST RATE RIDER IS EXECUTED ON JULY 30, 2001.

BORROWER:

CAPTARIS, INC.

By: /s/ [SIGNATURE ILLEGIBLE]
   ---------------------------------------
   AUTHORIZED OFFICER, TITLE C.F.O.

LENDER:

U.S. Bank National Association

By: /s/ Christine M. Bomgardner, V.P.
   ---------------------------------------
   Authorized Officer  V.P.

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