Document:

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                                                                 Exhibit 10.27.1

FORM
                             EMPLOYMENT AGREEMENT
                            (_____________________)
                                 Exhibit 6.1.1

     This EMPLOYMENT AGREEMENT is made as of October 30, 1999 by and between
Intek Information, Inc., a Delaware corporation (the "Company" or "Intek"),
Acorn Information Services, Inc., a Delaware corporation ("Acorn"), and
_________________, an individual residing in __________, _________ Connecticut
("Employee").

     WHEREAS, concurrently herewith, the Company is purchasing all of the
capital stock of Acorn pursuant to that certain Share Purchase Agreement among
the Company, Acorn, the Employee and others of even date herewith (the "Share
Purchase Agreement"); and

     WHEREAS, the Company desires to employ the Employee as an employee of the
Company and as ________________ of Acorn, and Employee desires to serve as an
employee of the Company and as ________________ of Acorn upon the following
terms and conditions and effective as of October 1, 1999 (the "Effective Date").

                                   AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants herein, the
parties agree as follows:

1.   Employment. Upon the terms and subject to the conditions of this Agreement,
     ----------
     the Company hereby employs and Acorn employs, and the Employee hereby
     agrees to serve, as an employee of the Company and as ________________ of
     Acorn.

2.   Term.  Subject to Section 5 hereof, the term of Employee's employment under
     ----
     this Agreement shall be for a period of three (3) years commencing on the
     Effective Date and terminating on the third anniversary thereof. This
     Agreement shall automatically extend for successive one-month periods after
     the initial three (3) year term unless terminated as provided herein. The
     initial three (3) year period and any extensions are collectively referred
     to herein as the "Term".

3.   Compensation.
     ------------

     A.   Base Salary.  The Company shall, commencing on the Effective Date and
          -----------
          during the Term, pay to the Employee, and the Employee agrees to
          accept, a base salary of $________ per year, less applicable
          withholding taxes, payable in accordance with the customary practices
          of the Company, but not less than monthly, plus such salary increases
          as approved by the Board of Directors of the Company. The annual base
          salary, excluding all bonus payments, as in effect from time to time,
          is referred to herein as the "Base Salary".
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     B.   Signing Bonus.  On the date hereof, the Company shall pay Employee a
          -------------
          signing bonus (which shall be subject to withholding and other similar
          taxes) of $________as described in Exhibit A.

     C.   Spider Stock.  On the date hereof, the Company shall deliver to
          ------------
          Employee three hundred eighty-eight thousand one hundred fifty-five
          (388,155) shares of common stock of Spider Technologies, Inc., a
          Delaware corporation ("Spider Stock"), which shall be subject to the
          Stock Restriction Agreement attached hereto as Exhibit B. Employee
          agrees to make a timely Section 83(b) election with the Internal
          Revenue Service with respect to the Spider Stock, and a failure to do
          so constitutes a material breach of this Agreement permitting the
          Company to terminate this Agreement for "Cause".

     D.   Consideration.  Employee agrees to accept the above amounts and the
          -------------
          benefits described in this Agreement in full payment for the services
          to be rendered by him hereunder; provided, however, that the Company's
          Board of Directors or its Compensation Committee and Employee will
          meet no later than six (6) months after the Effective Date and again
          on each anniversary of the Effective Date to discuss an increase in
          Base Salary. There is no assurance any increase in Base Salary will
          occur. In no event shall Base Salary decrease.

4.   Duties.
     ------

     A.   Employee has been retained to occupy a position that constitutes part
          of the professional, management and executive staff of the Company and
          Acorn, whose duties will include the formulation and execution of
          management policy.

     B.   The Employee shall during the Term:

          (i)  devote his full normal working time, energies and attention to
               the duties of his employment as they may be established from time
               to time by the Board of Directors of the Company and/or Acorn
               consistent with the position and office occupied by Employee,
               except that Employee may spend time managing Employee's personal,
               financial and legal affairs and, upon the prior written consent
               of the ________________ of the Company (which consent shall not
               be unreasonably withheld), serving on corporate, civic or
               charitable boards and committees, provided that such approval
               shall be deemed to have been given if the ________________ of the
               Company does not notify Employee that Employee may not so serve
               within fifteen (15) business days of receipt of Employee's notice
               of Employee's intent to serve on such boards or committees, and
               further provided that in any event such time does not
               unreasonably interfere with Employee's performance of his duties
               hereunder;

          (ii) comply with all reasonable rules, regulations and administrative
               directions now or hereafter established by the Company;

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          (iii) not engage in any activity or employment which materially
                conflicts with or has a material adverse affect on, the present
                or prospective business of the Company (including its
                subsidiaries) and Employee's performance of his duties for the
                Company or Acorn; and

          (iv)  notwithstanding the foregoing, if reasonably requested by the
                Company, perform services for and/or be an officer of one or
                more Intek subsidiaries, to the extent such duties are
                consistent with Employee's executive position.

     C.   It is expressly understood and agreed that the Employee's continuing
          with the same level of involvement to serve on any boards and
          committees (i) on which he is serving or with which he is otherwise
          associated on the Effective Date, and/or (ii) his service on any other
          boards and committees of which he notifies the ________________ of the
          Company and the Company gives prior written approval (which approval
          will not be unreasonably withheld and shall be deemed to have been
          given if the ________________ of the Company does not notify Employee
          that Employee may not so serve within fifteen (15) business days of
          receipt of Employee's notice), shall not be deemed to interfere with
          the performance of the Employee's services to the Company.

     D.   Unless Employee consents otherwise in writing, which consent will not
          be unreasonably withheld, the principal location for the performance
          of his duties hereunder shall be at Acorn's offices in Shelton,
          Connecticut.

5.   Termination.
     -----------

     A.   Mutual Agreement. Notwithstanding the provisions of Sections 1 and 2
          ----------------
          hereof, this Agreement may be terminated at any time by the mutual
          written agreement of the Company and Employee.

     B.   Termination of Employment Other Than by Employee.  Notwithstanding the
          ------------------------------------------------
          provisions of Sections 1 and 2 hereof, this Agreement may be
          terminated prior to the expiration of the Term by the Company only
          upon the occurrence of any of the following events:

          (i)   Death.  Upon the death of the Employee.
                -----

          (ii)  Disability. The inability of the Employee to perform his duties
                ----------
                in any material respects on account of injury, illness or other
                incapacity for the longest of (i) ninety (90) consecutive days,
                or (ii) ninety (90) days in a three hundred sixty-five (365) day
                period, or (iii) any longer period prescribed by any applicable
                law, and the Board of Directors of the Company reasonably
                determines that Employee has been unable to perform his duties
                for such period as a result of injury, illness or other
                incapacity ("Disability").

          (iii) Cause.  For "Cause", which shall be limited to:
                -----

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         (1)   the Employee is convicted or indicted of a felony, or of a
               criminal offense involving any act or acts of moral turpitude or
               any crime other than a vehicle offense that materially impairs
               the Company's business, goodwill or reputation;

         (2)   the Employee has committed any material act of dishonesty with
               respect to the Company, or any of the Company's subsidiaries or
               affiliates, that materially impairs the Company's business,
               goodwill or reputation and that is not the result of an
               inadvertent or innocent mistake;

         (3)   willful malfeasance or nonfeasance of duty by the Employee
               hereunder that materially injures the reputation, business or
               business relationships of the Company or any of its subsidiaries
               or any of their respective officers, directors or employees;

         (4)   the Employee materially breaches any term of this Agreement and
               such action or failure to act is not remedied or cured, or
               reasonable steps to fully effect such remedy or cure are not
               commenced, within twenty (20) days of Employee's receipt of
               written notice from the Company of such material breach;

         (5)   willful or prolonged absence from work by the Employee (other
               than by reason of Disability) or material failure, neglect or
               refusal by the Employee to perform his duties and
               responsibilities without the same being remedied or corrected
               upon twenty (20) days prior written notice; or

         (6)   a failure to properly and timely make the Section 83(b) election
               provided for above regarding the Spider Stock.

 C.  Without Cause. Notwithstanding the provisions of Sections 1 and 2 hereof,
     -------------
     the Company may terminate this Agreement at any time without Cause upon
     thirty (30) days prior written notice to the Employee, in which case the
     Company shall pay the Employee the amounts set forth in Section 5G(iv)
     below.

 D.  Termination of Employment by Employee. Notwithstanding the provisions of
     -------------------------------------
     Sections 1 and 2 hereof, this Agreement may be terminated prior to the
     expiration of the Term by the Employee as follows:

     (i)  General.  The Employee may terminate his employment at any time on
          -------
          ninety (90) days written notice, provided, however, that the Company
                                           --------  -------
          may, in its sole discretion, elect to accelerate Employee's
          termination under this Subsection by giving the Employee written
          notice of its desire for the Employee to terminate his employment at
          any time after thirty (30) days after receipt of Employee's notice of
          termination hereunder.

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     (ii)  Hardship.  The Employee may terminate his employment immediately and
           --------
           without prior notice due to a significant and long term family
           medical emergency or similar hardship ("Hardship").

     (iii) Good Reason.  The Employee may terminate his employment at any time
           -----------
           for Good Reason by giving Notice of Termination pursuant to Section
           5.D. within sixty (60) days after the Employee has actual notice of
           the occurrence of any of the following events (each or collectively,
           "Good Reason") (provided the Company and Acorn do not cure such
           event, or commence reasonable steps to fully effect such a remedy or
           cure, on a retroactive basis to the extent possible within twenty
           (20) days following its receipt of the Employee's Notice of
           Termination):

           (1) The Employee's Base Salary, bonuses and/or other compensation are
               reduced or not paid for any reason other than in connection with
               the termination of his employment.

           (2) The Company otherwise materially breaches, or is unable to
               perform its obligations under this Agreement and such breach is
               not remedied or cured, or reasonable steps to fully effect a
               remedy or cure have not commenced, within twenty (20) days of the
               Company's receipt of written notice from Employee of such
               material breach.

           (3) For any reason, other than in connection with the termination of
               Employee's employment for Cause, the Company materially reduces
               any benefit provided to the Employee below the level of such
               benefit provided generally to other actively employed executives
               of the Company of similar compensation and responsibility levels,
               unless the Company agrees to fully compensate the Employee for
               any such material reduction.

E.   Notice of Termination.  Any termination of the Employee's employment by the
     ---------------------
     Company hereunder, or by the Employee other than termination upon the
     Employee's death, shall be communicated by written Notice of Termination to
     the other party. For purposes of this Agreement, a "Notice of Termination"
     means a notice that shall indicate the specific termination provision
     relied upon in this Agreement, and shall set forth in reasonable detail the
     facts and circumstances claimed to provide a basis for termination of the
     Employee's employment under the specified provision or provisions.

F.   Date of Termination.  "Date of Termination" means:
     -------------------

     (i)  If the Employee's employment is terminated by his death, the date of
          his death.

     (ii) If the Employee's employment is terminated by the Company as a result
          of Disability pursuant to Section 5.B.(ii), the date that is thirty
          (30) days after Notice of Termination is given.

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     (iii) If the Employee terminates his employment for Good Reason pursuant to
           Section 5.D(iii) the date that is twenty (20) days after Notice of
           Termination is given (provided that the Company does not cure such
           event during the twenty (20) day period).

     (iv)  If the parties terminate Employee's employment pursuant to Section
           5(A) or if the Company terminates Employee's employment pursuant to
           Section 5(C) or if Employee terminates his employment for Hardship
           pursuant to Section 5(D)(ii), the date of Employee's last day of
           work.

     (v)   If the Employee terminates his employment pursuant to Section
           5(D)(i), the date that is ninety (90) days after Notice of
           Termination is given, or such last day of employment as may be
           specified by the Company in its notice to the Employee under Section
           5(D)(i).

     (vi)  If the Employee's employment is terminated by the Company either for
           Cause pursuant to Section 5(B)(iii), the date on which the Notice of
           Termination is given.

G.   Amounts Payable Upon Termination of Employment or During Disability.
     -------------------------------------------------------------------

     (i)   Death. If the Employee's employment is terminated by his death, the
           -----
           Employee's beneficiary, as designated by the Employee in writing with
           the Company prior to his death, shall be entitled to the following
           payments and benefits (collectively, "Termination Payments"): (i) any
           Base Salary that is accrued but unpaid, any bonus that is earned but
           unpaid pursuant to the applicable terms and provisions of such bonus
           plan, any vacation that is accrued but unused, and any business
           expenses that are unreimbursed -- all, as of the Date of Termination;
           and (ii) any benefit following the Date of Termination which may be
           provided under the benefit plans, policies and programs described in
           Section 7 in the amounts and for the time periods set forth in the
           applicable terms and provisions of such plans. In the absence of a
           beneficiary designation by the Employee, or, if the Employee's
           designated beneficiary does not survive the Employee, or if required
           by law, the Termination Payments shall be paid to the Employee's
           estate.

     (ii)  Disability.
           ----------

           During any period that the Employee fails to perform his duties
           hereunder as a result of a Disability ("Disability Period"), the
           Employee shall continue to receive his Base Salary at the rate then
           in effect for such period until his employment is terminated pursuant
           to Section 5(B)(ii) less any payments received pursuant to disability
           policies or benefits (whether of the Company, Acorn or governmental);
           and

           Upon his termination of employment because of Disability, the
           Employee shall be entitled to the Termination Payments as if the
           Employee has died on his Date of

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           Termination. In the event of the Employee's death prior to the time
           that all Termination Payments have been paid, such payments and
           benefits shall be paid to the Employee's beneficiary as designated
           pursuant to Section 5(G)(i), or, in the absence of a beneficiary
           designation or the designated beneficiary does not survive the
           Employee, to the Employee's estate.

     (iii) Hardship or Mutual Agreement.  In the event the parties mutually
           ----------------------------
           agree to terminate this Agreement or Employee terminates his
           employment due to Hardship before the expiration of the Term,
           including any extension thereof, the Employee shall be entitled to
           the Termination Payments as if the Employee had died on his Date of
           Termination.

     (iv)  Termination by Company Without Cause or Termination by Employee for
           -------------------------------------------------------------------
           Good Reason.  In the event the Company terminates the Employee's
           -----------
           employment without Cause pursuant to Section 5(c) or the Employee
           terminates his employment for Good Reason before the expiration of
           the Term, including any extension thereof, the Employee shall be
           entitled to the following payments and benefits:

           (1) The Termination Payments as if the Employee had died on his Date
               of Termination;

           (2) Employee's Base Salary then in effect from and after the Date of
               Termination through the earlier of (i) the expiration of the Term
                                       -------
               and (ii) the date twelve (12) months after the Date of
               Termination (the "Initial Severance Period"), less all applicable
               payroll deductions, including deductions for federal, state,
               local and Social Security taxes (the "Initial Severance
               Payments"). The Initial Severance Payments shall be paid in
               accordance with the provisions of Section 3; and

           (3) In Intek's sole discretion (based on factors such as, without
               limitation, Employee diligently searching for future employment,
               his reasonable cooperation with Intek during the Initial
               Severance Period relating to activities Employee was actively
               engaged in prior to the Date of Termination and Employee
               refraining from any act or failure to act intended to materially
               injure the reputation, business relationships or operations of
               the Company), Employee's Base Salary then in effect from and
               after the expiration of the Initial Severance Period through the
               earlier of (i) the expiration of the Term, (ii) the date twelve
               (12) months after the expiration of the Initial Severance Period,
               and (iii) the date Employee commences other employment that, in
               Employee's sole discretion, is suitable and comparable to his
               employment with the Company (the "Extended Severance Period"),
               less all applicable payroll deductions, including deductions for
               federal, state, local and Social Security taxes (the "Extended
               Severance Payments"). The Severance Payments shall be paid in
               accordance with the provisions of Section 3.

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               During the Initial Severance Period, payment of any life
               insurance or other benefit of employment which may be provided
               under the benefit plans, policies and programs described in
               Section 7 will terminate on the Date of Termination (other than
               COBRA at the Employee's expense).

               During the Initial Severance Period and the Extended Severance
               Period, the Company shall provide the Employee at the Company's
               expense customary full executive level outplacement services with
               a mutually acceptable outplacement firm for a period of up to
               twelve (12) months after the Date of Termination to assist
               Employee with his post-termination search for employment,
               provided that in no event shall the Company be required to pay an
               amount greater than fifteen percent (15%) of Employee's then
               current Base Salary. In lieu of such outplacement services,
               Employee may request equitable payment in cash or request that
               the Company provide at its own expense for a period of up to
               twelve (12) months (and in an amount that does not exceed the
               amount that would have been payable by the Company under the
               immediately preceding sentence) a mutually acceptable office,
               together with secretarial assistance and customary office
               facilities and services, for the purpose of facilitating
               Employee's search for new employment. Employee acknowledges and
               agrees that he will be responsible for the payment of all taxes
               that are applicable in connection with the payments made by the
               Company under this section.

          In order to obtain payments pursuant to Subsections G(iv)(2) and
          G(iv)(3) above, Employee shall submit a request for Severance Payments
          identical to Exhibit C hereof following the last day of his
          employment.  The Company shall have no obligation to pay any such
          payments unless and until the Employee shall have submitted such
          request.  The payments made hereunder, if any, shall be made on a
          monthly basis at the time of the Company's regular payroll and shall
          not be reduced by compensation the Employee may receive from other
          sources.

     (v)  Termination by Employee Other Than for Good Reason, Hardship, Mutual
          --------------------------------------------------------------------
          Agreement or Termination by Company for Cause.  In the event that the
          ---------------------------------------------
          Employee voluntarily terminates his employment (other than for Good
          Reason, Hardship or Mutual Agreement) or the Company terminates his
          employment for Cause, the Employee shall not be entitled to any
          compensation except as set forth below:

          (1)  Any Base Salary that is accrued but unpaid, any vacation that is
               accrued but unused, any bonuses that are earned but unpaid
               pursuant to the terms and provisions of such bonus plans, and any
               business expenses that are unreimbursed -- all, as of the Date of
               Termination; and

          (2)  Any other rights and benefits (if any) provided under plans and
               programs of the Company (excluding any bonus program), determined
               in accordance with the applicable terms and provisions of such
               plans and programs.

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6.   Expenses.  The Company shall reimburse the Employee in accordance with the
     --------
     Company's regular procedures in effect from time to time (but at least
     monthly) for all reasonable and necessary business expenses incurred by him
     in the performance of his duties hereunder, provided that Employee shall
     render to the Company such accounts and vouchers covering expenditures as
     the Company reasonably requires or as are necessary for tax purposes, and
     shall follow normal Company policy on expenses.

7.   Vacation; Benefits.  During the Term:
     ------------------

     A.   Employee shall be eligible to participate in the benefit plans made
          generally available to employees of the Company having similar
          responsibility and compensation levels as Employee to the extent not
          duplicative of compensation or benefits provided expressly herein.
          Employee expressly acknowledges that the Company may alter, modify,
          suspend or terminate any such benefit plans at any time and for any
          reason, or no reason.

     B.   Employee shall be entitled to four (4) weeks vacation time annually
          with pay, the time of which shall be determined in Employee's
          discretion and shall not unreasonably interfere with Employee's
          performance of his duties hereunder; and

     C.   Employee will receive an automobile allowance of $________ per month
          and automobile insurance so long as premium levels are in accordance
          with standard rates for safe drivers.

8.   Non-Competition.
     ---------------

     A.   The Company, Acorn and the Employee recognize that the Employee has
          been retained to occupy a position that constitutes part of the
          professional, management, and executive staff of the Company and
          Acorn, whose duties will include the formulation and execution of
          management policy. The Employee, for and in consideration of the
          payments, rights and benefits provided herein, agrees that during the
          Non-Compete Period (defined below), the Employee shall not compete
          directly or materially with a Subject Company in the business of (i)
          inbound or outbound telemarketing or teleservicing; (ii) outsourced
          teleservicing; (iii) customer direct e-servicing business, which
          includes, without limitation, the design, development, marketing and
          sale of business tools (including business rules and processes) and
          computer software that assists businesses and other organizations in
          selling products directly to consumers on the Internet, or (iv) "data
          mining" by which demographic data is either gathered or analyzed in
          order to direct or improve marketing or customer service activities
          (collectively the "Business"), during the Non-Compete Period. For
          purposes of this Section, the "Non-Compete Period" shall begin on the
          Closing Date (as defined in the Purchase Agreement) and end either:
          (i) if the Date of Termination is before the EBITDA Threshold (as
          defined in the Purchase Agreement) is achieved, the longer of one (1)
          year after the Date of Termination or three (3) years after the
          Closing Date; or (ii) if the Date of Termination is after the EBITDA
          Threshold is achieved, one (1) year after the Date of Termination. The
          parties agree that they shall not during such period make public
          statements in derogation of each other,

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          except as may be required by law. For the purposes of this Section,
          the term "Subject Company" shall mean Intek and any direct or indirect
          subsidiaries, parents and affiliates of Intek including Acorn.
          Competing directly or materially with the Subject Company shall mean
          (a) either (i) engaging or (ii) having a material interest (any
          ownership or profit interest over 5% always being material), directly
          or indirectly, as owner, employee, officer, director, partner,
          venturer, shareholder, capital investor, consultant, agent, principal,
          advisor or otherwise, either alone or in association with others, in
          the operation of any individual or entity engaged in (b) the Business
          within Canada or the continental United States, including the
          California counties which would appear here if each county in
          California was listed here. Competing directly or materially with the
          Subject Company, as used in this Agreement, shall be deemed not to
          include an ownership interest as an inactive investor, which for
          purposes of this Section shall mean the beneficial ownership of less
          than five percent (5%) of the outstanding shares of any series or
          class of securities of any competitor of the Subject Company, which
          shares are publicly traded in the securities markets. The Key
          Shareholders agree that the Business is inherently nationwide in
          scope.

     B.   Notwithstanding the foregoing, Employee shall have no obligation under
          this Section 8 after termination if (i) both (1) (A) the Employee has
          terminated this Agreement for Good Reason or the Company has
          terminated this Agreement without Cause, and (B) the Company has
          obligations to make post-termination continued Base Salary payments
          under this Agreement, and (2) after twenty (20) days notice by the
          Employee to the Company that the Company has failed to make such post-
          termination payments, the Company has not cured such failure to make
          payments; or (ii) if the Intek ________________ consents, which
          consent shall not be unreasonably withheld, to Employee's employment
          or performance of services for a business that does not directly
          compete with Intek.

     C.   Upon the termination of the Employee's employment with the Company,
          and for one year thereafter, upon written request of the Company, the
          Employee shall promptly provide the Company a Certificate of
          Compliance with this Section 8, which Certificate shall include
          information regarding Employee's employment or agency relationships
          with third parties engaged in a business which is directly or
          materially in competition with the Business to the extent not
          prohibited by confidentiality agreements with third parties. The
          Company agrees to keep confidential and not to use or disclose any
          information that Employee provides regarding Employee's employment or
          agency relationships with third parties.

     D.   The Employee agrees that the restrictions contained in this Section 8
          are reasonable as to time and geographic scope because of the nature
          of the Business and the Employee agrees, in particular, that the
          geographic scope of this restriction is reasonable because companies
          engaged in the Business compete on a nationwide basis. The Employee
          acknowledges that the Company is in direct competition with all other
          companies engaged in the Business throughout the continental United
          States, Canada, and other markets in which the Company may be
          conducting business at the time the Employee's

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          employment with the Company is terminated, and because of the nature
          of the Business, the Employee agrees that the covenants contained in
          this Section 8 cannot reasonably be limited to any smaller geographic
          area.

     E.   The provisions of this Section 8 shall survive termination of this
          Agreement for any reason.

9.   Non-Raid.
     --------

     A.   The Employee acknowledges that the Company has invested substantial
          time and effort in assembling its present staff of personnel.
          Accordingly, Employee covenants and agrees that during the term of the
          Non-Compete Period, he will not (i) solicit or hire any of the
          employees of a Subject Company who were employed by a Subject Company
          at or within one month before or during the Employee's employment by a
          Subject Company, (ii) interfere with the relationship of the Subject
          Company with any such employees, or (iii) personally target or
          solicit, or assist another to target or solicit, customers of the
          Subject Company for activities related to the Business or influence,
          or attempt to influence any of the customers of the Subject Company
          not to do business with the Company.

     B.   Notwithstanding the foregoing, Employee shall have no obligation under
          this Section 9 after termination if both (i) (A) the Employee has
          terminated this Agreement for Good Reason or the Company has
          terminated this Agreement without Cause, and (B) the Company has
          obligations to make post-termination continued Base Salary payments
          under this Agreement, and (ii) after twenty (20) days notice by the
          Employee to the Company that the Company has failed to make such post-
          termination payments, the Company has not cured such failure to make
          payments.

     C.   The Employee agrees that the restrictions contained in this Section 9
          are reasonable as to time and geographic scope because of the nature
          of the Business and the Employee agrees, in particular, that the
          geographic scope of this restriction is reasonable because companies
          engaged in the Business compete on a nationwide basis. The Employee
          acknowledges that the Company is in direct competition with all other
          companies engaged in the Business throughout the continental United
          States, Canada, and other markets in which the Company may be
          conducting business at the time the Employee's employment with the
          Company is terminated, and because of the nature of the Business, the
          Employee agrees that the covenants contained in this Section 9 cannot
          reasonably be limited to any smaller geographic area.

10.  Blue Pencil Provision.  Employee acknowledges that the scope, periods and
     ---------------------
     geographic area of restriction imposed by Section 8 and Section 9 are fair
     and reasonable and are reasonably required for the protection of the
     Company. If any part or parts of Section 8 or Section 9 shall be held to be
     unenforceable or invalid, the remaining parts thereof shall nevertheless
     continue to be valid and enforceable as though the invalid portion or
     portions were not a part hereof. If any of the provisions of Section 8 and
     Section 9 relating to the scope, periods or

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     geographic area of restriction shall be deemed to exceed the maximum scope,
     periods of time or area which a court of competent jurisdiction would deem
     enforceable, the scope, times and area shall, for the purposes of Section 8
     and Section 9, be deemed to be the maximum scope, time periods and area
     which a court of competent jurisdiction would deem valid and enforceable in
     any state in which such court of competent jurisdiction shall be convened.
     The invalidity or unenforceability of any provision hereof in one
     jurisdiction shall not affect its validity or enforceability in another
     jurisdiction.

11.  Confidentiality.  Employee acknowledges that Employee may have access to
     ---------------
     certain information related to the business, operations, future plans and
     customers of the Company, the disclosure or use of which could cause the
     Company substantial losses and damages. Accordingly, Employee covenants
     that during the term of Employee's employment with the Company and
     thereafter Employee will keep confidential all such information and
     documents furnished to Employee by or on behalf of the Company and not use
     the same to Employee's advantage, except to the extent such information or
     documents are lawfully obtained from other sources on a non-confidential
     (as to the Company) basis or are in the public domain through no fault on
     Employee's part or is consented to in writing by the Company or are
     disclosed to the extent required by a court, administrative agency,
     government body, or applicable law, rule or regulation. Upon termination of
     Employee's employment, Employee shall return to the Company all records,
     lists, files, disks, documents, media and other Company property which are
     in Employee's possession and which relate to the Company or its business.

12.  Right to Injunctive Relief.  Employee agrees and acknowledges that a
     --------------------------
     violation of the covenants contained in Sections 8, 9, or 11 of this
     Agreement will cause irreparable damage to the Company, and that it may be
     impossible to estimate or determine the damage that will be suffered by the
     Company in the event of a breach by Employee of any such covenant.
     Therefore, Employee further agrees that in the event of any violation or
     immediately threatened violation of such covenants, the Company shall be
     entitled as a matter of course to seek an injunction from any court of
     competent jurisdiction restraining such violation or threatened violation
     by Employee, such right to an injunction to be cumulative and in addition
     to whatever other remedies the Company may have.

13.  Indemnification; Insurance.  The Company shall provide for the coverage of
     ---------------------------
     Employee under the Company's standard directors' and officers' insurance
     policy to protect Employee against any expense, liability or loss by reason
     of the fact that Employee is or was a director or officer of the Company,
     to the fullest extent permitted by applicable law and the terms and
     conditions of such policy.

14.  Integration; Forum.  This Agreement together with the Stock Restriction
     ------------------
     Agreement and the Share Purchase Agreement shall constitute the entire
     agreement between the parties. This Agreement shall be governed by the laws
     of Colorado, excluding laws on choice of law. This Agreement specifically
     supersedes any employment arrangements, or other compensation arrangement
     (including bonus, option, appreciation, benefit or commission arrangements)
     with Acorn. Any litigation regarding this Agreement shall only be brought
     and heard in the

                                       12
<PAGE>

     federal or state courts located in Chicago, Illinois, which courts shall
     apply the laws of the State of Colorado, excluding laws on choice of law,
     and no transfer of venue outside such area shall be permitted. If the
     Company is enforcing any provision hereof which is similar to a provision
     in the Share Purchase Agreement (including, but not limited to, non-
     compete, confidentiality and no-hire provisions) and Employee was a party
     to such Share Purchase Agreement, the Company may require the resolution of
     such issues to be decided in the arbitration or litigation conducted under
     such Share Purchase Agreement. Termination of this Agreement or any
     provision hereof, including Sections 8, 9, or 11, shall not affect any
     similar provision in the Share Purchase Agreement, including any non-
     compete covenant; provided, however, that the provisions of Sections 8 and
                       --------  -------
     9 hereof relating to the time periods for the effectiveness of the
     agreements addressed in such sections, shall control over a longer time
     period in the corresponding provision of the Share Purchase Agreement. In
     all other respects the agreements in the Share Purchase Agreement
     (including, but not limited to, non-compete, confidentiality and no-hire
     provisions) are separate and independent of this Agreement.

15.  Unenforceability. If any paragraph or subparagraph of this Agreement or any
     ----------------
     part thereof shall be unenforceable under any applicable laws,
     notwithstanding such unenforceability the remainder of this Agreement shall
     remain in full force and effect.

16.  Attorneys' Fees; Costs.  In the event of any legal or arbitration action or
     ----------------------
     proceeding to enforce or interpret the provisions hereof, the prevailing
     party shall be entitled to reasonable attorneys' fees and costs, and other
     costs and expenses incurred in the action or proceeding, whether or not the
     proceeding results in a final judgment. All costs and expenses, including
     without limitation attorneys' fees and costs, incurred in connection with
     the negotiation, preparation, execution, delivery and enforcement of this
     Agreement and consummation of the transactions contemplated hereby shall be
     paid by the party incurring such costs and expenses.

17.  Survival.  Terms which by their terms or sense are to survive termination
     --------
     hereof (including Sections 5, 8, 9, 11 and 12) shall so survive.

18.  Notice. Any notice, direction or instruction required or permitted to be
     ------
     given hereunder shall be given in writing and may be given by facsimile
     transmission or similar method if confirmed by mail as herein provided; by
     mail if sent postage prepaid by registered mail, return receipt requested;
     or by hand delivery to any party at the address of the party set forth
     below. If notice, direction or instruction is given by facsimile
     transmission or similar method or by hand delivery, it shall be deemed to
     have been given or made on the day on which it was given, and if mailed,
     shall be deemed to have been given or made on the third business day
     following the day after which it was mailed. Any party may, from time to
     time, by like notice give notice of any change of address and in such
     event, the address of such party shall be deemed to be changed accordingly.

          If to the Company:       Intek Information Inc.
                                   5619 DTC Parkway, 12/th/ Floor

                                       13
<PAGE>

                                   Englewood, CO 80111
                                   Attn: Timothy C. O'Crowley
                                   Telephone: (303) 357-3000
                                   Facsimile: (303) 323-4213

          Copy to:                 Chrisman, Bynum & Johnson, P.C.
                                   1900 15th Street
                                   Boulder, CO 80302
                                   Attn: G. James Williams, Jr.
                                   Telephone: (303) 546-1300
                                   Facsimile: (303) 449-5426

          If to the Employee:      _____________________________
                                   PERSONAL AND CONFIDENTIAL
                                   c/o Acorn Information Services, Inc.
                                   4 Corporate Drive
                                   Shelton, CT 06484
                                   Telephone: (800) 279-3889
                                   Facsimile: (203) 225-7610

          Copy to:                 Wiggin & Dana
                                   Three Stamford Plaza
                                   301 Tresser Blvd.
                                   Attn: William A. Perrone
                                   Telephone: (203) 363-7604
                                   Facsimile: (203) 363-7676

19.  Inventions.  Employee hereby agrees to assigns, and hereby assigns, to the
     ----------
     Company all of Employee's interest (including copyrights and patent rights)
     in any ideas, concepts, know-how, inventions, discoveries, works of
     authorship, and the like ("Inventions"), which are conceived or made by
     Employee during the term of Employee's employment with the Company or his
     previous employment by Acorn, and which are or were developed on Company
     time or with Company facilities, whether or not related to the Business.
     Further, even if not developed on Company time or with Company facilities,
     any Invention (conceived by or made by Employee during the term of
     employment with the Company) is hereby assigned if it relates to or is
     suggested by the Business. Employee also agrees that, independent of any
     assignment, Employee's work is a work for hire and the Company owns all
     right, title and interest in all Inventions, and all copyrights, patent
     rights, and the like, concerning the Inventions. Employee will, from time
     to time, execute such confidentiality and invention assignment agreements
     as are generally signed by similarly situated Company employees.

20.  Amendments; Waivers. This Agreement cannot be changed, modified or amended,
     -------------------
     and no provision or requirement hereof may be waived, without consent in
     writing of the parties hereto.

                                       14
<PAGE>

21.  Counterparts.  This Agreement may be executed in two or more counterparts,
     ------------
     each of which shall be deemed to be an original. It shall not be necessary
     when making proof of this Agreement to account for more than one
     counterpart.

22.  Acorn as Substitute for Intek; Joint and Several Liability.  Acorn and
     ----------------------------------------------------------
     Intek acknowledge and agree that they are jointly and severally liable for
     their duties under this Agreement. Throughout this Agreement references are
     made to the Company performing certain acts. The Company may cause Acorn to
     perform (in whole or in part) any act to be performed by the Company
     hereunder; provided, however, that no such assignment or delegation of
     duties shall relieve Acorn or Intek of their joint and several liability
     hereunder.

                           [Signature page follows.]

                                       15
<PAGE>

IN WITNESS WHEREOF, the parties have executed this EMPLOYMENT AGREEMENT as of
the date first above written.

INTEK INFORMATION, INC.                 ACORN INFORMATION SERVICES, INC.

By: __________________________          By:__________________________________
     Timothy O'Crowley                  Title: ______________________________

     ___________________

EMPLOYEE

__________________________________

                                   EXHIBIT A
                                   ---------

In the event Acorn achieves Sustained Profitability by August 31, 1999, the
Company will pay Employee $________, less applicable taxes and withholding.  The
bonus will be paid within thirty (30) days of Closing.  "Sustained
Profitability" has the meaning set forth in the Share Purchase Agreement.

The Company's obligation to pay such signing bonus shall immediately expire in
the event Employee's employment is terminated for any reason set forth in the
attached Employment Agreement prior to the date such bonus is payable by
Company.

                                       16
<PAGE>

                                   EXHIBIT B
                                   ---------

                          Stock Restriction Agreement

                                       17
<PAGE>

                                   EXHIBIT C
                                   ---------

                     Request for Post-Employment Allowance

This request for severance allowance is made by _________________ (hereinafter
"the Employee") pursuant to the provisions of the Employment Agreement (the
"Agreement") between the Employee on the one hand, and Intek Information, Inc.
and Acorn Information Services, Inc. on the other (hereinafter collectively "the
Company").

1. In consideration of the execution of this request for post-employment
allowance, the Company agrees to pay me the amounts and provide me with the
benefits as set forth in Subsections G(iv)(2) and (3) of the Agreement.

2. In return for these payments and benefits, I fully and finally release, waive
and discharge all charges, claims and causes of action of any sort known to me
that I may have against any person (including the Company, its directors,
officers, employees, agents and owners), including but not limited to, claims
arising from or related to my employment or termination of my employment, any
age, race, any unlawful employment practices of any kind, or otherwise, whether
such claims arise under federal, state, local, common, contract (including, but
not limited to, the Agreement), tort or other laws or regulations, specifically
including Title VII of the Civil Rights Act of 1964 as amended by the Equal
Employment Opportunity Act of 1972 and the Age Discrimination in Employment Act,
42 U.S.C. Section 1981.

3. I represent and warrant that I have returned all property of the Company in
my possession, including but not limited to, documents, manuals, pertinent
business contacts (names and addresses), shareholder lists, software, computers
and computer disks, notes, keys, cellular phone, and other articles or equipment
I used in the course of my employment that were provided to me by the Company.

4. It is understood that the Company does not admit the existence or validity of
any such claims or any liability of any sort nor has the Company made any
agreement or promise to do or omit to do any act or thing not herein set forth.

5. I agree that I will not disclose this document or its terms or provisions
without first obtaining the written consent of the Company except to the extent
such information is lawfully obtained from other sources on a non-confidential
(as to the Company) basis or are in the public domain through no fault on
Employee's part, and except to my accountants, attorneys and immediate family
members.

6. I understand that this Request shall be governed by Colorado law.

7. I have read and completely understand this request and recognize that it
constitutes a general release and waiver of all claims, and I agree that this is
an acceptable compromise of any such

                                       18
<PAGE>

claims described in this request and knowingly and voluntarily intend to be
bound by these provisions without any further promises or consideration by the
Company.

____________________________________    Date __________________

                                       19
<PAGE>

                    EXHIBIT TO FORM OF EMPLOYMENT AGREEMENT
                     EMPLOYEE STOCK RESTRICTION AGREEMENT

     This EMPLOYEE STOCK RESTRICTION AGREEMENT (the "Agreement") is made as of
the 4th day of November, 1999, by and between INTEK INFORMATION, INC., a
Delaware corporation (the "Company"), and ________________________ ("Employee").

                                   RECITALS
                                   --------

     WHEREAS, the Company, Acorn Information Services, Inc., a Delaware
corporation ("Acorn"), Employee, a former shareholder and an employee of Acorn,
and certain other shareholders of Acorn (the "Acorn Shareholders") have entered
into a Share Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") for the purchase by the Company of all of the outstanding capital
stock of Acorn from the Acorn Shareholders.  All capitalized terms used, but not
otherwise defined, herein shall have the meaning ascribed to them in the
Purchase Agreement.

     WHEREAS, Employee and the Company have entered into an Employment Agreement
of even date herewith (the "Employment Agreement") pursuant to which Employee is
entitled to receive [________________] shares of common stock of Spider
Technologies, Inc., a Delaware corporation and previously wholly owned
subsidiary of the Company ("Spider"), subject to the terms and conditions of
this Agreement.

     WHEREAS, the [________________]  shares of common stock of Spider, par
value $0.0001 per share, Employee is entitled to receive under the Employment
Agreement (the "Employee Shares") are subject to the restrictions contained in
this Agreement.

     WHEREAS, in consideration of the Employment Agreement and the execution by
certain other employees of the Company and Acorn of similar agreements pursuant
to the Purchase Agreement, Employee desires to participate in the stock
restriction plan which this Agreement embodies.

     NOW, THEREFORE, the parties agree as follows:

     1.   Delivery of Spider Common Stock.  Employee and the Company agree that
          -------------------------------
in consideration for services rendered and to be rendered by Employee to Acorn,
the Company has delivered to Employee [________________]  shares of Spider
common stock subject to the terms and conditions of this Agreement.  If the spin
off transaction between Intek and Spider (the "Spider Spin Off") closes on or
before the Closing Date (as defined in the Purchase Agreement) or at the
Company's election even if the Spider Spin Off has not occurred, the Company
shall exercise its warrant to purchase shares of Spider common stock and, upon
receipt of certificates evidencing such shares, shall deliver a

                                       1
<PAGE>

duly endorsed certificate to Employee representing [___________] shares of
Spider common stock free and clear of any liens, charges, claims or encumbrances
of any kind (other than this Agreement, the Spider Shareholders Agreement and
the Purchase Agreement) as compensation for certain services rendered and to be
rendered by Employee to Acorn. If the Spider Spin Off does not close on or
before the Closing Date, and the Company does not elect to deliver the Spider
common stock, the Company shall deliver to Employee a warrant entitling Employee
to receive [___________] shares of Spider common stock (subject to the same risk
of forfeiture as the Employee Shares as provided below) upon the closing of the
Spider Spin Off or 25 days after the date hereof, whichever is earlier;
provided, however, that in the event the Spider Spin Off is terminated prior to
--------  -------
such 25-day period, such warrant shall terminate automatically upon such
termination of the Spider Spin Off and Employee shall not be entitled to receive
any shares of Spider common stock.

          2.   Escrow of Employee Shares.  Employee shall deposit the
               -------------------------
certificate representing the Employee Shares (or the warrant as the case may be)
with Wiggin & Dana (the "Escrow Agent") to be held in escrow (the "Escrow") in
accordance with the terms of this Agreement and a mutually acceptable escrow
agreement entered into with the Escrow Agent.  The certificate will be held in
Escrow until the expiration of the risk of forfeiture to which the Employee
Shares are subject as provided below, which in any event shall be no later than
30 days after the end of the close of the books of account of the Company for
the period ending on the third anniversary of the date of this Agreement (or
upon earlier expiration of the risk of forfeiture with respect to the Employee
Shares upon an acceleration event as described in Section 5.16 of the Purchase
Agreement) (the "Disbursement Date").  If all or any portion of the Employee
Shares is forfeited (as provided below), the Company will issue on or prior to
the Disbursement Date a new certificate in the name of Employee to the escrow
agent representing the number of Vested Employee Shares (defined below) for
disbursement to employee out of Escrow at the Disbursement Date.  Subject to
Section 4, the Escrow Agent shall deliver to Employee the certificate
representing the Vested Employee Shares on the Disbursement Date.

          As used herein, "Vested Employee Shares" means a number of shares of
Spider common stock equal to the number of shares of Intek common stock Employee
is entitled to receive under Section 2.2 of the Purchase Agreement in Year 1 (as
defined in the Purchase Agreement), subject to Sections 2.4 and 5.16 of the
Purchase Agreement, and adjusted for all stock splits, stock dividends, stock
combinations and recapitalizations of Spider common stock and Intek common
stock, respectively (and any securities issued in respect thereof) (an
"Adjusting Event").  "Unvested Employee Shares" means the Employee Shares that
are not Vested Employee Shares.

          As used in this Agreement, the Employee Shares includes any and all
proceeds and products of the Employee Shares whether by dividend, distribution,
as consideration for a merger, or otherwise.  In the event such proceeds or
products includes cash, any cash shall be placed in a mutually acceptable escrow
account with a financial

                                       2
<PAGE>

institution or similar party pursuant to an escrow agreement containing
substantially the terms as the Escrow Agreement entered into by the Company and
the Acorn Shareholders under the Purchase Agreement (provided that such escrow
shall not be created for indemnification claim purposes). Employee shall be
entitled to receive on the Disbursement Date the amount of such products or
proceeds in proportion to the number of Vested Employee Shares Employee is
entitled to receive on such date.

          As a condition to receipt of the Employee Shares hereunder, Employee
agrees to execute and deliver to Spider a copy of any shareholders agreement
that is executed by the holders of seventy percent (70%) or more of the
outstanding common stock of Spider (the "Shareholders Agreement").

          3.   Section 83(b) Election.  The Employee Shares received by Employee
               ----------------------
hereunder are subject to a risk of forfeiture as defined in Section 83(b) of the
Internal Revenue Code of 1986, as amended.  Such risk of forfeiture shall
terminate at the same time and in the same manner as the shares of Intek common
stock payable pursuant to Section 2.2 (Contingent Earn-Out Consideration) and
Section 2.4 (Effect of Employee Departures and Minimum EBITDA Threshold) of the
Purchase Agreement.  Employee agrees to promptly and timely file with the
                     ----------------------------------------------------
Internal Revenue Service and the Company a Section 83(b) election with respect
------------------------------------------------------------------------------
to the Spider shares received by him hereunder and Employee acknowledges that he
--------------------------------------------------------------------------------
understands the consequences of such filing.  Employee agrees that he is solely
-------------------------------------------
responsible for making such election and that he shall have no recourse against
the Company or its advisors with respect to such election.

          4.   Employee Shares Upon Termination of Employment.  In the event
               ----------------------------------------------
that Employee shall cease to be an employee of Acorn at any time prior to three
(3) years from the date hereof, Employee shall be entitled to receive the Vested
Employee Shares on the Disbursement Date, except that a number of Employee
Shares shall be placed in the Earn-Out Pool (as defined in the Purchase
Agreement) equal to the shares of Intek common stock placed in the Earn-Out Pool
for Year 1 as Earn-Out Consideration pursuant to Section 2.4 of the Purchase
Agreement and shall be issued in the same manner as the Intek shares.  Any
Employee Shares that are not placed in the Earn-Out Pool pursuant to this
Section 4, and that are not Vested Employee Shares, shall be deemed Unvested
Employee Shares and subject to the rights of the Company under Section 5 herein.

          5.   Unvested Employee Shares.  Upon the earlier of the Disbursement
               ------------------------
Date or the Date of Termination, Employee shall automatically sell and transfer
to the Company at a price of $0.013 per share, as adjusted for any Adjusting
Events (the "Purchase Price"), all of the Unvested Shares as of the Disbursement
Date or the Date of Termination (as applicable) that are not placed in the Earn-
Out Pool as provided in Section 4 herein, without further consideration and
without written notice to such effect.

          Unless the Company affirmatively elects not to purchase the Unvested
Shares within sixty (60) days following the Disbursement Date (or the Date of

                                       3
<PAGE>

Termination if earlier), or if the number of Unvested Employee Shares shall not
have been determined as of such time, then within thirty (30) days of the date
on which the Company makes such determination, the Unvested Employee Shares
shall be deemed to have been purchased by the Company.  The Company shall pay
the Purchase Price at the closing of such sale, which closing shall occur within
the sixty (60) day period (or thirty day extended period, as applicable)
referenced in the preceding sentence.  A failure of the Company to make any
payment under this Section 5 shall not void the transfer of the Spider common
stock to the Company, but will only result in a monetary claim by Employee
against the Company for the amount of such payment. References to Employee
herein shall be deemed to include Employee's legal representative, estate or
beneficiary in the case of Employee's death or Disability (as defined in the
Employment Agreement).  If the Company affirmatively elects not to purchase the
Unvested Shares, such Unvested Shares shall be deemed Vested Shares and Employee
shall be entitled to receive such shares on the later of the Disbursement Date
or upon notice from the Company of its election not to purchase the Unvested
Shares.

          Upon payment of the Purchase Price (in cash) in accordance with this
Agreement, Employee and the Company shall notify the Escrow Agent of such
payment and Escrow Agent shall deliver the certificate representing the Unvested
Employee Shares to the Company.  The escrow agreement with the Escrow Agent
shall terminate as of the Disbursement Date.  All transfer taxes and expenses
shall be paid by Employee.

                                       4
<PAGE>

          6.   Transfer by Employee.   Employee may not sell, transfer, gift,
               --------------------
assign, pledge, encumber or otherwise dispose ("Transfer") of any of his
Employee Shares during his lifetime until such shares are Vested Employee
Shares, unless to another Acorn Shareholder, to an immediate family member or
other trust or entity formed for estate planning purposes, or pursuant to
Section 5 or with the prior written consent of the Company, which consent may be
withheld for any reason or for no reason.  Any Transfer of Employee Shares until
such shares are Vested Shares, whether voluntary or involuntary or by operation
of law, which is made in violation of this Section 6 (other than a Transfer
resulting from a merger or similar event required by applicable law to be
approved by a vote of the shareholders of Spider) shall be null and void and
have no effect, and the Company shall not recognize any such Transfer or
recognize the transferee as the holder of such Employee Shares for any purpose.
If Employee Transfers his Employee Shares in accordance with this Section 6,
then such Transfer may be consummated subject to the restrictions in the
Shareholders Agreement; provided, however, that any transferee thereof shall
                        --------  -------
become a party to this Agreement, shall execute and deliver a counterpart of
this Agreement and shall agree to be subject to the restrictions and obligations
hereunder.  Employee agrees and acknowledges that any Transfer of his Vested
Employee Shares shall be subject to and made in accordance with the terms of the
Shareholders Agreement.

          7.   No Other Liability. No party hereto shall have by reason hereof
               ------------------
any liability to the other on account of a termination of Employee's employment
with the Company for any reason, except for any liability which may (or may not)
be established by a separate written mutual agreement signed by the parties,
including, but not limited to, the Employment Agreement or the Purchase
Agreement.

          8.   Restrictive Legend.   Employee consents to the placement of an
               ------------------
appropriate restrictive legend on the certificate evidencing the Employee Shares
and any certificates issued in replacement or exchange therefor.  In addition to
any restrictive legend required under the Spider Shareholders Agreement,
Employee understands that the restrictive legend shall be substantially in the
following form:

               THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
               INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
               OF 1933. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
               ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
               ACT. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
               TRANSFERRED EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS CONTAINED
               IN AN EMPLOYEE STOCK RESTRICTION AGREEMENT DATED
               __________________, 1999, A COPY OF WHICH OBTAINED AT NO COST BY
               WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION AT ITS
               CORPORATE HEADQUARTERS.

                                       5
<PAGE>

     The Company agrees to remove such restrictive legend upon the issuance of
Vested Shares to Employee on the Disbursement Date.

     9.   Other.  The terms of this Agreement shall apply to any additional
          -----
shares of Spider common stock issued to or received by Employee in connection
with a stock dividend, stock split, or other distribution of Spider stock.  All
certificates representing shares hereinafter issued Employee shall bear the
legend provided in Section 8.  If there shall be any change in the capital stock
of Spider through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, or other change in the corporate structure of
Spider, the restrictions contained in this Agreement shall apply with equal
force to the new or additional securities, or both, if any are received by
Employee in exchange for, or by virtue of his ownership of, the Employee Shares.
An appropriate adjustment shall also be made to the Purchase Price set forth in
Section 4 upon the occurrence of any such events.

     10.  Rights as Shareholder.   Subject to the provisions of this Agreement,
          ---------------------
Employee shall, during the term of this Agreement, be entitled to all rights and
privileges of a shareholder of Spider with respect to the Employee Shares.

     11.  Notice.  Any notice required or permitted under this Agreement shall
          ------
be given in writing and shall be deemed effectively given upon personal delivery
or three (3) business days after deposit in the United States Post Office, by
registered or certified mail, with postage and fees prepaid, addressed to the
Company at its principal office and to Employee at his address as carried on the
Company's records, or at such other address as such party may designate by ten
(10) days' advance written notice to the other party hereto.

     12.  Assignment.  This Agreement shall inure to the benefit of the
          ----------
successors and assigns of the Company and, subject to the restrictions on
transfer set forth in this Agreement, be binding upon Employee, his heirs,
administrators, successors and assigns.

     13.  Survival.  The rights and obligations of the Company and of Employee
          --------
under this Agreement shall survive any merger or sale of all or substantially
all of the capital stock or assets of Spider, or a public offering of Spider
capital stock.

     14.  Governing Law.  This Agreement shall be governed by and construed
          -------------
under the internal laws of the State of Colorado, without regard to the choice
of law rules therein.

                                       6
<PAGE>

     15.  Arbitration.  Except as provided below in this paragraph, any and all
          -----------
disputes arising under or related to this Agreement shall be submitted  to
binding arbitration before the American Arbitration Association ("AAA") in
accordance with its rules of Commercial Arbitration.  The decision of the
arbiter shall be final and binding upon the parties, and it may be entered in
any court of competent jurisdiction.  The arbitration shall take place in
Chicago, Illinois.  The arbiter shall be bound by the laws of the State of
Colorado applicable to all relevant privileges and the attorney work product
doctrine.  The arbiter shall have the power to grant equitable relief where
applicable under Colorado law and shall not be entitled to make an award of
punitive damages.  The arbiter shall issue a written opinion setting forth its
decision and the reasons therefor within thirty (30) days after the arbitration
proceeding is concluded.  The obligation of the parties to submit any dispute
arising under or related to this Agreement to arbitration as provided in this
Section shall survive the expiration or earlier termination of this Agreement.
Notwithstanding the foregoing, any party may seek an injunction or other
appropriate relief from a court of competent jurisdiction to preserve or protect
the status quo with respect to any matter pending conclusion of the arbitration
proceeding, but no such application to a court shall in any way be permitted to
stay or otherwise impede the progress of the arbitration proceeding.

          The Company and Employee hereby consent to the jurisdiction of the AAA
and the courts of the State of Illinois and the United States District Courts
for the Northern District of Illinois, as well as to the jurisdiction of all
courts from which an appeal may be taken from such courts, for the purpose of
any arbitration, suit, action or other proceeding arising out of any of their
obligations arising hereunder or with respect to the transactions contemplated
hereby and expressly waive any and all objections they may have as to venue in
any of such courts.

     16.  Section Titles.  Section titles are for descriptive purposes only and
          --------------
shall not control or alter the meaning of this Agreement as set forth in the
text.

     17.  Further Assurances.  The parties shall execute and deliver such
          ------------------
further instruments and do such further acts and things as may be required to
carry out the intent and purposes of this Agreement.

     18.  Directly or Indirectly.  Where any provision in this Agreement refers
          ----------------------
to action to be taken by any person, or which such person is prohibited from
taking, such provision shall be applicable whether the action in question is
taken directly or indirectly by such person.

     19.  Counterparts.  This Agreement may be executed in any number of
          ------------
counterparts, each of which shall be deemed an original of this Agreement.

     20.  Entire Agreement.  This Agreement together with the other agreements
          ----------------
and instruments entered into in connection herewith constitutes the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, and

                                       7
<PAGE>

supersedes all other prior understandings or agreements between
Employee and the Company with respect to such transactions.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       8
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Restricted Stock
Agreement as the date first written above.

COMPANY:                            INTEK INFORMATION, INC.
                                    A Delaware corporation

                                    By: _______________________
                                    Title: ____________________

EMPLOYEE:                           ____________________________
                                    Print Name: ________________

                                       9
<PAGE>

                                 EXHIBIT 8.8.3

                               ESCROW AGREEMENT
                               ----------------

     THIS AGREEMENT is made as of the 30th day of October, 1999 by and among
Venkat Sharma, Shoba Murali, Raja Ramnarayan, Sunil Gupta, Richard Wayne, the
Sharma Family LLC, the Murali Family LLC and the Ramnarayan Family LLC
(collectively, the "Shareholders"), Intek Information, Inc., a Delaware
corporation ("Buyer"); and Colorado State Bank and Trust ("Escrow Agent"), a
Colorado Corporation. All capitalized terms used, but not otherwise defined
herein shall have the meanings ascribed to them in the Purchase Agreement.

     WHEREAS, contemporaneously with the execution hereof, the Shareholders and
Buyer will enter into that certain Share Purchase Agreement whereby Buyer will
purchase all of the issued and outstanding capital stock of Acorn ("Purchase
Agreement"); and

     WHEREAS, pursuant to the Purchase Agreement, the parties have agreed to
place a portion of the purchase price in escrow upon the terms and conditions
herein.

     In consideration of the mutual covenants and agreements contained in this
Agreement, the parties hereto agree as follows:

     1.   Receipt of Escrow Fund for Purchase Price.  Upon the payment by
          -----------------------------------------
Buyer to the Shareholders of the Sustained Profitability Consideration and the
cash portion of the Contingent Earn-Out Consideration in the amounts and at the
times set forth in the Purchase Agreement, Buyer shall deliver on the date of
such payments for a period expiring fifteen (15) months after the Closing Date a
bank cashier's check, certified check, wire transfer or other immediately
available funds in an amount which shall equal ten percent (10%) of such amounts
paid to the Shareholders on each such date, payable to the order of Escrow Agent
(the "Fund").  The Base Consideration and the stock portion of the Contingent
Earn-Out Consideration payable under the Purchase Agreement shall not be subject
to this Agreement and shall not be delivered to Escrow Agent as part of the
Fund.   Escrow Agent agrees to hold the Fund pursuant to the terms and
conditions of this Agreement.  Escrow Agent shall invest the Fund in an
interest-bearing account.  Interest earned on the Fund shall be paid to, and
reported as interest by, the recipient of the Fund.

     2.   Release of Escrow for Purchase Price. Escrow Agent shall release
          ------------------------------------
and deliver the Fund together with accrued interest, to the Shareholders on
October 30, 2001, being the date that is eighteen (18) months after the Closing
Date ("Claim Expiration Date"), unless on or prior to the Claim Expiration Date,
Escrow Agent shall have received a Claim Notice (as defined in and in accordance
with Section 3 below) from Buyer, in which case disbursement will be as provided
herein.  Upon release by Escrow Agent of the Fund, as provided for herein, this
Agreement shall terminate and Escrow Agent shall be discharged of any further
duties hereunder.

     3.   Claim Notice. If Buyer has a Claim for Damages for which Buyer
          ------------
believes it is entitled to indemnification under Article 8 of the Purchase
Agreement and which Buyer believes should be paid out of the Fund, prior to the
Claim Expiration Date Buyer shall deliver to each of
<PAGE>

the Shareholders and on the Escrow Agent a written request ("Claim Notice")
setting forth the amount of indemnity claimed ("Claim Amount") and in reasonable
detail the basis therefor. If a Claim Notice is timely made, Escrow Agent shall
promptly furnish each of the Shareholders with a copy of such Claim Notice in
accordance with the notice provisions hereof and shall proceed in the following
manner:

               (a)            If within thirty (30) days of Escrow Agent's
                              receipt of the Claim Notice, the Buyer shall
                              deliver to the Escrow Agent joint written
                              instructions duly executed by Shareholders and
                              Buyer, the Escrow Agent shall release and deliver
                              the Funds in accordance with such written notice.
                              Escrow Agent shall have no obligation to verify
                              the accuracy or validity of the signatures on such
                              written instructions.

               (b)            If within thirty (30) days of Escrow Agent's
                              receipt of the Claim Notice, the Buyer or any
                              Shareholder shall deliver to the Escrow Agent and
                              on each of the Shareholders or Buyer (as
                              applicable) a written demand for arbitration in
                              accordance with Section 9 below, the Escrow Agent
                              shall withhold the Claim Amount until such
                              arbitration shall have been concluded. Upon
                              conclusion of such arbitration, Escrow Agent shall
                              make distribution of the amount awarded to Buyer
                              in such arbitration, if any, and release and
                              deliver the balance of the Claim Amount to the
                              Shareholders if the Claim Expiration Date has
                              passed (unless the Fund is the subject of another
                              Claim Notice) or return the balance to the Fund if
                              the Claim Expiration Date has not passed.

               (c)            If on the thirtieth (30/th/) day following Escrow
                              Agent's receipt of the Claim Notice, Escrow Agent
                              has received neither written instructions nor
                              demand for arbitration in accordance with Sections
                              3(a) or 3(b) above, the Escrow Agent shall release
                              and deliver the amount claimed in the Claim Notice
                              of the Fund together with accrued interest thereon
                              to the Buyer and shall continue to hold the
                              balance of the Fund pursuant to the terms of this
                              Agreement unless and until Escrow Agent receives
                              another Claim Notice hereunder, or this Agreement
                              expires or is terminated by written consent of the
                              parties hereto.

                                       2
<PAGE>

               If Escrow Agent should at any time be confronted with
               inconsistent claims or demands by the parties hereto, Escrow
               Agent shall have the right to initiate arbitration proceedings
               pursuant to Section 9 hereunder.

     4.   Disbursement at Claim Expiration Date. As to any amount for which a
          -------------------------------------
Claim Notice has not been made before the Claim Expiration Date, the Escrow
Agent shall immediately release and deliver the balance of the Fund plus accrued
interest thereon to the Shareholders in accordance with Section 5 herein.

     5.   Sellers' Disbursements and Action. Escrow Agent shall make
          ---------------------------------
distributions of the Sustained Profitability Consideration and the cash portion
of the Contingent Earn-Out Consideration to each Shareholder in the percentages
set forth in the attached Exhibits B, which Exhibit shall be amended by the
Shareholders promptly upon any change to such percentages.  Any action of the
Shareholders hereunder requires only the approval or consent of persons
representing 80% in interest of the percentages listed in Exhibit B (as the same
may be amended) and the Shareholders' payment and indemnification obligations
(if several and not joint) shall be in the same proportion as such percentages.

     6.   Notices.  All notices and other communications required or permitted
          -------
under this Agreement shall be deemed to have been duly given and made if in
writing and if served either by personal delivery to the party for whom intended
or by deposit with Federal Express or other overnight delivery service which
guarantees next day delivery, signature required, bearing the address shown in
this Agreement for, or such other address as may be designated in writing
hereafter by, such party:

If to any Shareholder:   the address set forth on Exhibit A hereto

        with a copy to   Wiggin & Dana
                         Three Stamford Plaza
                         Stamford, CT 06901
                         Attn: William A. Perrone
                         Telephone: (203) 363-7604
                         Facsimile: (203) 363-7676

If to Buyer:             Intek Information Inc.
                         5619 DTC Parkway, 12th Floor
                         Englewood, CO 80111-3017
                         Attention: Timothy C. O'Crowley
                         Telephone: (303) 357-3000
                         Facsimile: (303) 323-4213

                                       3
<PAGE>

with a copy to:          Chrisman, Bynum & Johnson
                         1900 Fifteenth Street
                         Boulder, CO 80302
                         Attention: G. James Williams
                         Telephone: (303) 546-1300
                         Facsimile: (305) 449-5426

If to Escrow Agent:      Colorado State Bank & Trust
                         1600 Broadway
                         Denver, CO  80202
                         Attention: Sara Swain
                         Telephone: 303-864-7222
                         Facsimile: 303-864-7300

A notice given in accordance with this Section 6 shall be deemed effective on
the same business day if delivered personally or on the following business day
if sent by Federal Express or other overnight delivery service in accordance
with this Section 6.

     7.   Performance of Escrow Agent's Duties.  Escrow Agent undertakes to
          ------------------------------------
perform only such duties as are expressly set forth herein (or required by
applicable law), and no additional duties or obligations shall be implied
hereunder.  In performing its duties under this Agreement, or upon the claimed
failure to perform any of its duties hereunder, Escrow Agent shall not be liable
to anyone for any damages, losses or expenses which may be incurred as a result
of Escrow Agent so acting or failing to so act; provided, however, that Escrow
                                                --------  -------
Agent shall not be relieved from liability for damages to the extent a court of
competent jurisdiction or arbitrator pursuant to Section 9 herein determines by
final order that such damages arose out of the gross negligence, bad faith or
willful misconduct of Escrow Agent under this Agreement.  Escrow Agent shall in
no event incur any liability with respect to (a) any action taken or omitted to
be taken in good faith upon advice of legal counsel, which may be counsel to any
party hereto, given with respect to any question relating to the duties and
responsibilities of Escrow Agent hereunder or (b) any action taken or omitted to
be taken in reliance upon any instrument delivered to Escrow Agent and believed
by it to be genuine and to have been signed or presented by the proper party or
parties.  Except as set forth in Section 3(a) above, Escrow Agent shall not be
bound in any way by any agreement or contract between the Shareholders and
Buyer, whether or not Escrow Agent has knowledge of any such agreement or
contract, including, but not limited to the Purchase Agreement.

                                       4
<PAGE>

     Escrow Agent may execute any of its powers or responsibilities hereunder
and exercise any rights hereunder either directly or by or through its agents or
attorneys.  Escrow Agent shall not be responsible for and shall not be under a
duty to examine or pass upon the validity, binding effect, execution or
sufficiency of this Agreement or of any agreement amending or supplementing this
Agreement.

     8.   No Security Interests.  The Shareholders and Buyer each warrant to and
          ---------------------
agree with Escrow Agent that, unless otherwise expressly set forth in this
Agreement, there is no security interest in the Fund or any part of the Fund; no
financing statement under the Uniform Commercial Code of any jurisdiction is on
file in any jurisdiction claiming a security interest in or describing, whether
specifically or generally, the Fund or any part of the Fund; and Escrow Agent
shall have no responsibility at any time to ascertain whether or not any
security interest exists in the Fund or any part of the Fund or to file any
financing statement under the Uniform Commercial Code of any jurisdiction with
respect to the Fund or any part thereof.

     9.   Dispute Resolution.  Except as provided below in this paragraph, any
          ------------------
and all disputes arising under or related to this Agreement shall be submitted
to binding arbitration before the American Arbitration Association ("AAA") in
accordance with its rules of Commercial Arbitration.  The decision of the
arbiter shall be final and binding upon the parties, and it may be entered in
any court of competent jurisdiction.  If the Escrow Agent is a party to the
arbitration, the arbitration shall take place in Denver, Colorado, the arbiter
shall be bound by the laws of the State of Denver, Colorado applicable to all
relevant privileges and the attorney work product doctrine, and the arbiter
shall have the power to grant equitable relief where applicable under Colorado
law and shall not be entitled to make an award of punitive damages.  The arbiter
shall issue a written opinion setting forth its decision and the reasons
therefor within thirty (30) days after the arbitration proceeding is concluded.
The obligation of the parties to submit any dispute arising under or related to
this Agreement to arbitration as provided in this Section shall survive the
expiration or earlier termination of this Agreement.  Notwithstanding the
foregoing, any party may seek an injunction or other appropriate relief from a
court of competent jurisdiction to preserve or protect the status quo with
respect to any matter pending conclusion of the arbitration proceeding, but no
such application to a court shall in any way be permitted to stay or otherwise
impede the progress of the arbitration proceeding.

          In the event of any arbitration being filed or instituted between the
parties concerning this Agreement, the prevailing party will be entitled to
receive from the other party or parties its attorneys' fees, experts' fees,
witness fees, costs and expenses, court costs and other reasonable expenses,
whether or not such controversy, claim or action is prosecuted to judgment or
other form of relief.

          Buyer and the Shareholders specifically agree that arbitration shall
be invoked under this Agreement only if Escrow Agent is a necessary party and
that if the matter to be

                                       5
<PAGE>

decided is the validity of a claim under Article 8 of the Purchase Agreement
that the arbitration provisions of the Purchase Agreement will control and
govern the dispute.

          As an additional consideration for and as an inducement for Escrow
Agent to act hereunder, it is understood and agreed that, in the event of any
disagreement between the parties to this Agreement or among them or any other
person(s) resulting in adverse claims and demands being made in connection with
or for any money or other property or rights involved in or affected by this
Agreement, Escrow Agent shall be entitled, at the option of Escrow Agent, to
refuse to comply with the demands of such parties, or any of such parties, so
long as such disagreement shall continue.  In such event, Escrow Agent shall
make no delivery or other disposition of the Fund or any parts of such Fund.
Anything herein to the contrary notwithstanding, Escrow Agent shall not be or
become liable to such parties or any of them for the failure of Escrow Agent to
comply with the conflicting or adverse demands of such parties or any of such
parties.

          Escrow Agent shall be entitled to continue to refrain and refuse to
deliver or otherwise dispose of the Fund or any part therefore or to otherwise
act hereunder, as stated above, unless and until:

          (i)    the rights of such parties have been finally settled by binding
     arbitration or duly adjudicated in a court having jurisdiction of the
     parties and the Fund; or

          (ii)   the parties have reached an agreement resolving their
     differences and have notified Escrow Agent in writing of such agreement and
     have provided Escrow Agent with indemnity satisfactory to Escrow Agent
     against any liability, claims or damages resulting from compliance by
     Escrow Agent with such agreement.

In the event of a disagreement between such parties as described above, Escrow
Agent shall have the right, in addition to the rights described above and at the
option of Escrow Agent, to tender into the registry or custody of any court of
competent jurisdiction, all money and other property or rights comprising the
Fund and may take such other legal action as may be appropriate or necessary, in
the opinion of Escrow Agent. Upon such tender, the parties hereto agree that
Escrow Agent shall be discharged from all further duties under this Agreement;
provided, however, that the filing of any such legal proceedings shall not
deprive Escrow Agent of its compensation earned hereunder prior to such filing
and discharge of Escrow Agent of its duties hereunder.

                                       6
<PAGE>

     10.  Escrow Agent's Fees.
          -------------------

          The Shareholders and Buyer shall share equally the fees, costs and
expenses (including reasonable attorneys' fees) of Escrow Agent incurred in
connection with this Agreement.  In the event Escrow Agent is required to
perform extraordinary services in connection with the arbitration of any dispute
as set forth in Section 9 above, the non-prevailing party shall pay the
reasonable compensation for Escrow Agent's extraordinary services and reimburse
Escrow Agent for all costs and expenses reasonably incurred in connection with
such arbitration.

     11.  Resignation of Escrow Agent.
          ---------------------------

          Escrow Agent may resign at any time from its obligations under this
Agreement by providing written notice to the parties hereto.  Such resignation
shall be effective on the date set forth in such written notice which shall be
no earlier than thirty (30) days after such written notice has been given.  In
the event no successor escrow agent has been appointed on or prior to the date
of such resignation is to become effective, Escrow Agent shall be entitled to
tender into the custody of a court of competent jurisdiction all assets then
held by it hereunder and shall thereupon be relieved of all further duties and
obligations under this Agreement.  Escrow Agent shall have no responsibility for
the appointment of a successor escrow agent hereunder.  Such resignation shall
not deprive Escrow Agent of its compensation earned prior thereto.

     12.  Indemnification.
          ---------------

          Escrow Agent shall have no obligation to take any legal action in
connection with this Agreement or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding which would or might involve
it in any cost, expense, loss or liability unless security and indemnity, as
provided in this paragraph, shall be furnished.

          The Shareholders (as to one half) and Buyer (as to one half) severally
(not jointly) agree to indemnify Escrow Agent and its officers, directors,
employees and agents and save Escrow Agent and its officers, directors employees
and agents harmless from and against any and all Claims (as hereinafter defined)
and Losses (as hereinafter defined) which may be incurred by Escrow Agent  or
any of such officers, directors, employees or agents as a result of Claims
asserted against Escrow Agent or any of Escrow Agent's officers, directors,
employees or agents as a result of or in connection with Escrow Agent's capacity
as such under this Agreement by any person or entity.  For the purposes hereof,
the term "Claims" shall mean all claims, lawsuits, causes of action or other
legal actions and proceedings of whatever nature brought against (whether by way
of direct action, counterclaim, cross action or impleader) Escrow Agent or any
of Escrow Agent's officers, directors, employees or agents, even if groundless,
false or fraudulent, so long as the claim, lawsuit, cause of action or other
legal action or proceeding is alleged or determined, directly or indirectly, to
arise out of, result from, relate to or be based

                                       7
<PAGE>

upon, in whole or in part: (a) the acts or omissions of the Shareholders or
Buyer, (b) the appointment of Escrow Agent as escrow agent under this Agreement,
or (c) the performance by Escrow Agent of its powers and duties in accordance
with this Agreement; and the term "Losses" shall mean losses, costs, damages,
expenses, judgments and liabilities of whatever nature (including but not
limited to attorneys', accountants' and other professionals' fees, litigation
and court costs and expenses and amounts paid in settlement), directly or
indirectly resulting from, arising out of or relating to one or more Claims.
Upon the written request of Escrow Agent or any such officer, director, employee
or agent (each referred to hereinafter as an "Indemnified Party"). The
Shareholders (as to one-half) and Buyer (as to one-half) severally (not jointly)
agree to assume the investigation and defense of any Claim, including the
employment of counsel acceptable to the applicable Indemnified Party and the
payment of all expenses related thereto. The Shareholders and Buyer hereby agree
that the indemnifications and protections afforded Escrow Agent in this section
shall survive the termination of the Agreement. The Shareholders and Buyer have
no indemnification obligation in respect of Escrow Agent's action, or failure to
take action, in bad faith.

     13.  Governing Law.  This Agreement shall be governed by and construed in
          -------------
accordance with the laws of the State of Colorado, without regard to the choice
of law rules therein.

     14.  Miscellaneous.  The headings herein are for convenience only and shall
          -------------
not be of substantive effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective legal
representatives, heirs, successors and assignees.  This Agreement together with
the Purchase Agreement constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior negotiations,
understandings and writings (or any part thereof) whether oral or written
between any of the parties relating to the subject matter of this Agreement.
This Agreement may be executed in one ore more counterparts, each of which shall
be deemed an original, and all of which taken together shall constitute one and
the same instrument.

                            [signature page follows]

                                       8
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have signed this Escrow Agreement as
of the date first above written.

SHAREHOLDERS:             /s/ Venkat Sharma
                          ----------------------------------
                          Venkat Sharma
                          ----------------------------------

                          /s/ Shoba Murali
                          ----------------------------------
                          Shoba Murali

                          /s/ Raja Ramnarayan
                          ---------------------------------
                          Raja Ramnarayan

                          /s/ Sunil Gupta
                          ----------------------------------
                          Sunil Gupta

                          /s/ Richard Wayne
                          ---------------------------------
                          Richard Wayne

                         THE SHARMA FAMILY LLC

                         /s/ Venkat Sharma
                         ----------------------------------
                         Venkat Sharma, Manager

                         THE MURALI FAMILY LLC

                         /s/ Shoba Murali
                         ----------------------------------
                         Shoba Murali, Manager

                         THE RAMNARAYAN FAMILY LLC

                         /s/ Ramnarayan
                         -----------------------------------
                         Raja Ramnarayan, Manager

                                       9
<PAGE>

BUYER:                   INTEK INFORMATION, INC.

                         By:   /s/ Timothy O'Crowley
                             -------------------------------

                         Its:       Chief Executive Officer
                             -------------------------------

ESCROW AGENT:                   /s/
                         ---------------------------------------
                         By: ___________________________________
                         Its: __________________________________

                                      10
<PAGE>

                                   EXHIBIT A
                                   ---------

                                 SHAREHOLDERS

Venkat Sharma
25 Wimbleton Lane
Easton, CT
Ph:  (203) 225-7600 (office)
Fax: (203) 459-2896 (home)
SSN: ###-##-####

Shoba Murali
12 River Knoll Road
Westport, CT
SSN: ###-##-####

Raja Ramnarayan
25 Highland Road
Westport, CT 06880
SSN: ###-##-####

Sunil Gupta
305 Judd Road
Easton, CT 06612
SSN: ###-##-####

Richard Wayne
55 Valley Road
Easton, CT 06612
SSN: ###-##-####

The Sharma Family LLC
25 Wimbleton Lane
Easton, CT
EIN#: 06-1552928

The Murali Family LLC
12 River Knoll Road
Westport, CT
EIN#: 06-1552802

                                      11
<PAGE>

The Ramnarayan Family LLC
25 Highland Road
Westport, CT 06880
EIN#: 06-1551577

                                      12
<PAGE>

                                   EXHIBIT B
                                   ---------

                         SHAREHOLDERS' PERCENTAGES FOR
                     SUSTAINED PROFITABILITY CONSIDERATION

<TABLE>
                     <S>                             <C>
                     Venkat Sharma                   31.7935%

                     Sharma Family LLC               10.5978%

                     Shoba Murali                    20.3261%

                     Murali Family LLC               13.5870%

                     Raja Ramnarayan                 12.7174%

                     Ramnarayan Family LLC            6.3587%

                     Sunil Gupta                      2.1739%

                     Richard Wayne                    2.4456%

                           SHAREHOLDERS' PERCENTAGES
                     FOR CONTINGENT EARN-OUT CONSIDERATION

                     <S>                             <C>
                     Venkat Sharma                   29.1116%

                     Shoba Murali                    18.2262%

                     Raja Ramnarayan                 12.3500%

                     Sunil Gupta                     10.0000%

                     Richard Wayne                    2.2500%

                     The Sharma Family LLC            9.7039%

                     The Murali Family LLC           12.1833%

                     The Ramnarayan Family LLC        6.1750%
</TABLE>
                                      13
<PAGE>

                                  EXHIBIT 2.7
                   TRANSACTION ADVISOR FEE PAYMENT AGREEMENT

     This TRANSACTION ADVISOR FEE PAYMENT AGREEMENT (the "Agreement") effective
October 1, 1999 is made by and among INTEK INFORMATION, INC., a Delaware
corporation (the "Company"), PROSPERO LLC., a Connecticut limited liability
company ("Prospero"), PROSPERO HOLDINGS LLC, a Connecticut limited liability
company ("Prospero Holdings"), Acorn Information Services, Inc. a Delaware
corporation ("Acorn") and certain shareholders of Acorn who are signatories to
this Agreement (collectively the "Acorn Shareholders") in connection with a
Share Purchase Agreement by and among the Company, Acorn and the Acorn
Shareholders of even date herewith (the "Purchase Agreement").

                              W I T N E S S E T H
                              -------------------

     A.   Prospero and Acorn are parties to that certain letter agreement dated
August 3, 1998 as amended December 2, 1998 (together, the "Engagement Letter").

     B.   Prospero has provided Acorn with certain investment banking services
in connection with the Engagement Letter (the "Prospero Services"), including
without limitation advice regarding the sale of all of the outstanding capital
stock of Acorn to the Company under the terms and conditions of the Purchase
Agreement.

     C.   Concurrently herewith, Acorn and Prospero are entering into a letter
agreement regarding fee payment (the "Fee Payment Letter Agreement").

     D.   In connection with the Purchase Agreement and the Fee Payment Letter
Agreement and on the terms and conditions set forth in this Agreement, the
Company and the Acorn Shareholders have each agreed to pay a portion of the
amount payable by Acorn to Prospero in consideration for the Prospero Services.

     E.   Prospero desires to assign its right to payment for the Prospero
Services to Prospero Holdings.

     NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein, and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties agree as follows:

     1. Transaction Advisor Fees.  In consideration for the Prospero Services,
        ------------------------
Intek will at the closing of the next round of private financing by the Company
(the "Financing"), issue to Prospero Holdings on behalf of Acorn such number of
shares of Intek common stock equal to the quotient obtained by dividing $100,000
by the price per share of Series F Preferred Stock of Intek at the time of the
closing of such Financing  ("Transaction Advisor Shares").  If the Financing
does not close by December 31,
<PAGE>

1999, the Company shall issue to Prospero Holdings such number of shares of
Intek common stock equal to $100,000 divided by the per share price of $1.61, as
may be adjusted for any stock splits, stock dividends, stock combinations or
recapitalizations, other than the spin off by the Company of Spider
Technologies, Inc. common stock (the "Spider Shares"). Prospero (including
Prospero Holdings) shall not be entitled to receive any Spider Shares as part of
or upon issuance of the Transaction Advisor Shares hereunder. The Company shall
have no obligation to register the Transaction Advisor Shares except piggyback
registration rights as set forth in the Form of Registration Rights Agreement
attached hereto as Exhibit A (the "Registration Rights Agreement"), and shall
have no obligation to register the Transaction Advisor Shares in violation of
any applicable law or regulation.

  Notwithstanding the foregoing, upon the occurrence of a Change in Control (as
defined in the Purchase Agreement) prior to the earlier of the close of the
Financing or December 31, 1999, the Company shall issue to Prospero Holdings
such number of Transaction Advisor Shares obtained by dividing $100,000 by the
per share price of $1.61.  The Company shall issue such shares immediately prior
to the closing of a transaction that results in a Change in Control.

  Upon issuance of the Transaction Advisor Shares to Prospero Holdings, the
Company and Prospero Holdings shall enter into the Registration Rights
Agreement.

  2. No Further Liability.  Except for the fees for the Prospero Services,
     --------------------
neither Acorn nor the Acorn Shareholders are indebted to Prospero or Prospero
Holdings for any amount. Upon (i) execution of this Agreement and (ii) receipt
of the Fee Balance (as defined in the Fee Payment Letter Agreement), Acorn and
the Acorn Shareholders shall have no further liability to Prospero or Prospero
Holdings.  Upon (i) execution of this Agreement and (ii) receipt by Prospero
Holdings of the Transaction Advisor Shares, the Company shall have no further
liability to Prospero or Prospero Holdings.  The Company shall assume no
liability for any taxes or other payments of Prospero or Prospero Holdings,
Acorn or the Acorn Shareholders in connection with services rendered by
Prospero.  Prospero acknowledges that payment of the Transaction Advisor Shares
is being made on behalf of Acorn (and not on behalf of the Company), which is
Prospero's sole client with respect to the transactions contemplated by the
Purchase Agreement.

  3. Shareholders Agreement.  As a condition to receipt of the Transaction
     ----------------------
Advisor Shares, Prospero (and Prospero Holdings as applicable) shall execute and
deliver to the Company, and agree to be bound by the terms and conditions of,
the Shareholders Agreement of the Company then in effect and shall execute and
deliver such Shareholders Agreement and a subscription agreement to the Company
prior to the delivery of Transaction Advisor Shares hereunder. Prospero and
Prospero Holdings each acknowledges that the Shareholders Agreement may be
amended from time to time or may be terminated, whether before or after the time
Transaction Advisor Shares are issued, in accordance with the terms of the
Shareholders Agreement.

                                       2
<PAGE>

  4. Investor Representations.  Prospero and Prospero Holdings each represents
     ------------------------
it is currently an "accredited investor" as defined in Regulation D promulgated
by the Securities and Exchange Commission and shall so represent at the time of
receipt of any Transaction Advisor Shares. Prospero and Prospero Holdings each
further represents that it has had an opportunity to ask questions of and
receive answers from representatives of the Company with respect to the
acquisition of the Transaction Advisor Shares and that the Company has made
available to Prospero and Prospero Holdings all documents requested and has
provided answers to all such questions relating to receipt of the Transaction
Advisor Shares. Prospero and Prospero Holdings each acknowledges that, because
the Transaction Advisor Shares will not have been registered under the
Securities Act of 1933, as amended (the "Act"), or applicable state securities
laws, any resale inconsistent with the Act may create liability on its part
and/or the part of Intek, and agrees not to assign, sell, pledge, transfer or
otherwise dispose of or transfer any of the Intek Shares unless registered under
the Securities Act and applicable state securities laws or he has delivered an
opinion of counsel satisfactory to Intek that such registration is not required.

  Neither Prospero nor Prospero Holdings nor any "associate" of Prospero or
Prospero Holdings as such term is defined in Rule 12b-2 of the Securities
Exchange Act of 1934, as amended, or has a relationship with, a member of the
National Association of Securities Dealers, Inc. ("NASD"), or is an officer,
director, registered representative, lender, employee or beneficial owner of 10%
or more of a NASD member or any corporation or entity which owns a 10% or
greater ownership interest in an NASD member.

  5. Restrictive Legend. Prospero and Prospero Holdings each acknowledges that
     ------------------
the certificate representing the Transaction Advisor Shares shall bear
substantially the following restrictive legend:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").  THEY
     MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE
     UNLESS (I) A REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
     ACT IS IN EFFECT OR (II) THE CORPORATION HAS RECEIVED AN OPINION OF
     COUNSEL, WHICH OPINION IS SATISFACTORY TO THE CORPORATION, TO THE EFFECT
     THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT."

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT
     TO, AND ARE SUBJECT TO A CERTAIN SHAREHOLDERS AGREEMENT AMONG INTEK
     INFORMATION, INC. AND CERTAIN SHAREHOLDERS NAMED THEREIN, DATED  OCTOBER 1,
     1999 AS AMENDED FROM TIME TO TIME.  A COPY OF SUCH

                                       3
<PAGE>

  AGREEMENT IS AVAILABLE AT THE OFFICES OF THE CORPORATION."

  6.  Notice. Any notice required or permitted hereunder shall be in writing and
      ------
shall be sufficiently given if (i) personally delivered, (ii) mailed by
certified or registered United States mail, return receipt requested, or (iii)
sent by recognized air express courier for next business day delivery, addressed
to the parties at the addresses set forth on the signature page hereof and shall
be deemed to have been delivered as of the date so personally delivered, three
business days after so mailed, or one business day after the date delivered to
the air express courier.

  7.  Governing Law.  This Agreement shall be governed by and construed in
      -------------
accordance with the laws of the State of Colorado exclusive of the conflict of
law provisions thereof.

  8.  Arbitration; Attorneys' Fees.Arbitration; Consent to Jurisdiction. Any and
      ---------------------------- ------------------------------------
all disputes arising under or related to this Agreement shall be submitted  to
binding arbitration in accordance with the Arbitration provision contained in
the Purchase Agreement.  In the event of any arbitration or litigation being
filed or instituted between two or more of the parties concerning this
Agreement, the Prevailing Party will be entitled to receive from the other party
or parties its attorneys' fees, experts' fees, costs and expenses, whether or
not such controversy, claim or action is prosecuted to judgment or other form of
relief.  The "Prevailing Party" is that party which is awarded judgment or other
legal or equitable relief as a result of trial or arbitration, or who receives
or is entitled to receive a payment of money from the other party in settlement
of claims asserted by such party.  If both parties receive a judgment or other
award of relief, the court or the arbiter shall determine which party is the
Prevailing Party, taking into consideration the merits of the claims asserted by
each party, the relative values of the judgments or other forms of relief
received by each party, and the relative equities between the parties.

  9.  Counterparts.  This Agreement may be executed in any number of
      ------------
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.

  10. Entire Agreement.  This Agreement and the documents referenced herein
      ----------------
constitute the entire agreement between the parties regarding the matters
herein.

  11. Unenforceability. If any paragraph or subparagraph of this Agreement
      ----------------
or any part thereof shall be unenforceable under any applicable laws,
notwithstanding such unenforceability the remainder of this Agreement shall
remain in full force and effect.

  12. Amendments; Waivers. This Agreement cannot be changed, modified or
      -------------------
amended, and no provision or requirement hereof may be waived, without consent
in writing of the parties hereto.

                                       4
<PAGE>

                            [Signature Page Follows]

                                       5
<PAGE>

IN WITNESS WHEREOF, the parties hereby execute this TRANSACTION ADVISOR FEE
PAYMENT AGREEMENT as of the date first written above.

PROSPERO LLC.                          INTEK INFORMATION, INC.

By: /s/ Daniel J. Donovan              By: /s/ Timothy C. O'Crowley
   -------------------------------        ----------------------------------
Daniel J. Donovan, Managing Member     Timothy C. O'Crowley, President
    265 Post Road West                   5619 DTC Parkway, 12/th/ Floor
    Westport, CT 06880                   Englewood, CO 80111
    Attn:  Daniel J. Donovan             Attn:  Timothy C. O'Crowley
    Telephone: (203) 454-5616            Telephone: (303) 357-3000
    Facsimile: (203) 459-8157            Facsimile: (303) 323-4213

PROSPERO HOLDINGS LLC

By: /s/
   ---------------------------
Its: _________________________
      265 Post Road West, Westport, CT 06880
      Attn:  Daniel J. Donovan
      Telephone: (203) 454-5616
      Facsimile: (203) 459-8157

AGREED AND ACKNOWLEDGED:

ACORN INFORMATION SERVICES, INC.

   /s/ Venkat Sharma
------------------------------
Venkat Sharma, Chief Executive Officer
4 Corporate Drive, Shelton, CT  06484

ACORN SHAREHOLDERS:

   /s/ Venkat Sharma                           THE SHARMA FAMILY LLC
------------------------------
Venkat Sharma

   /s/ Shoba Murali                              /s/ Venkat Sharma
-------------------------------                --------------------------------
Shoba Murali                                   Venkat Sharma, Manager

   /s/ Raja Ramnarayan                         THE MURALI FAMILY LLC
-------------------------------                --------------------------------
Raja Ramnarayan

                                                 /s/ Shoba Murali
   /s/ Sunil Gupta                             --------------------------------
--------------------------------               Shoba Murali, Manager
Sunil Gupta

   /s/ Richard Wayne                           THE RAMNARAYAN FAMILY LLC
--------------------------------
Richard Wayne
                                                 /s/ Raja Ramnarayan
                                               --------------------------------
                                               Raja Ramnarayan, Manager

                                       6
<PAGE>

                                   EXHIBIT A

                     Form of Registration Rights Agreement

                                       7<PAGE>

                                                                    EXHIBIT 10.4

                          LOAN AND SECURITY AGREEMENT

                            $750,000 EQUIPMENT LINE
                                  PROVIDED BY
                              SILICON VALLEY BANK
                                      TO
                                ORAPHARMA, INC.

                               OCTOBER 10, 1997
<PAGE>

     This LOAN AND SECURITY AGREEMENT is entered into as of OCTOBER 10, 1997, by
and between SILICON VALLEY BANK, a California-chartered bank with its principal
place of business at 3003 Tasman Drive, Santa Clara, CA 95054 and with a loan
production office located at Wellesley Office Park, 40 William Street, Suite
350, Wellesley, MA 02181, doing business under the name Silicon Valley East
("Bank"), and ORAPHARMA, INC., a Delaware corporation with its principal place
of business at 1200 Route 22 East, Suite 2000, Bridgewater, New Jersey 08807
("Borrower").

                                   RECITALS
                                   --------

     Borrower wishes to obtain credit from time to time from Bank, and Bank
desires to extend credit to Borrower. This Agreement sets forth the terms on
which Bank will advance credit to Borrower, and Borrower will repay the amounts
owing to Bank.

                                   AGREEMENT
                                   ---------

     The parties agree as follows:

     1.   DEFINITIONS AND CONSTRUCTION
          ----------------------------

          1.1  Definitions. As used in this Agreement, the following terms shall
               -----------
have the following definitions:

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

               "Bank Expenses" means all reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents;
and Bank's reasonable attorneys' fees and expenses incurred in amending,
enforcing or defending the Loan Documents, (including fees and expenses of
appeal or review, or those incurred in any Insolvency Proceeding) whether or not
suit is brought.

               "Borrower's Books" means all of Borrower's books and records
including, without limitation: ledgers; records concerning Borrower's assets or
liabilities, the Collateral, business operations or financial condition; and all
computer programs, or tape files, and the equipment, containing such
information.

               "Business Day" means any day that is not a Saturday, Sunday, or
other day on which banks in the State of California are authorized or required
to close.

               "Closing Date" means the date of this Agreement.

               "Code" means the Massachusetts Uniform Commercial Code.

               "Collateral" means the property described on Exhibit A attached
                                                            ---------
hereto.

               "Committed Equipment Line" means a credit extension of up to
SEVEN HUNDRED FIFTY AND NO/100THS Dollars ($750,000).

               "Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to (i) any indebtedness, lease, dividend, letter of credit or other
obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable; (ii) any obligations with respect to undrawn
letters of credit issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement

<PAGE>

designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term "Contingent
Obligation" shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determined amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith; provided, however, that such
amount shall not in any event exceed the maximum amount of the obligations under
the guarantee or other support arrangement.

               "Credit Extension" means each Equipment Advance or any other
extension of credit by Bank for the benefit of Borrower hereunder.

               "Current Assets" means, as of any applicable date, all amounts
that should, in accordance with GAAP, be included as current assets on the
consolidated balance sheet of Borrower and its Subsidiaries as at such date.

               "Current Liabilities" means, as of any applicable date, all
amounts that should, in accordance with GAAP, be included as current liabilities
on the consolidated balance sheet of Borrower and its Subsidiaries, as at such
date, plus, to the extent not already included therein, all outstanding Credit
Extensions made under this Agreement, including all indebtedness that is payable
upon demand or within one year from the date of determination thereof unless
such indebtedness is renewable or extendable at the option of Borrower (or any
Subsidiary, if any) to a date more than one year from the date of determination,
but excluding Subordinated Debt.

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

               "Equipment Advance" has the meaning set forth in Section 2.1.1.

               "Equipment Availability End Date" has the meaning set forth in
Section 2.1.1.

               "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.

               "GAAP" means generally accepted accounting principles as in
effect in the United States from time to time.

               "Indebtedness" means (a) all indebtedness for borrowed money or
the deferred purchase price of property or services, including without
limitation reimbursement and other obligations with respect to surety bonds and
letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.

               "Insolvency Proceeding" means any proceeding commenced by or
against any person or entity under any provision of the United States Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

               "Inventory" means all 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 at any time hereafter owned by or in the
custody or possession, actual or constructive, of Borrower, including such
inventory as is temporarily out of its 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.

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

                                       2
<PAGE>

               "IRC" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.

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

               "Loan Documents" means, collectively, this Agreement, any note or
notes executed by Borrower, and any other present or future agreement entered
into between Borrower and/or for the benefit of Bank in connection with this
Agreement, all as amended, extended or restated from time to time.

               "Material Adverse Effect" means a material adverse effect on (i)
the business operations or condition (financial or otherwise) of Borrower and
its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents.

               "Maturity Date" means October 9, 2002.

               "Obligations" means all debt, principal, interest, Bank Expenses
and other amounts owed to Bank by Borrower pursuant to this Agreement or any
other agreement, whether absolute or contingent, due or to become due, now
existing or hereafter arising, including any interest that accrues after the
commencement of an Insolvency Proceeding and including any debt, liability, or
obligation owing from Borrower to others that Bank may have obtained by
assignment or otherwise.

               "Payment Date" means the NINTH (9th) calendar day of each month
commencing on the first such date after the Closing Date and ending on the
Maturity Date.

               "Permitted Indebtedness" means:

               (a) Indebtedness of Borrower in favor of Bank arising under this
Agreement or any other Loan Document;

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

               (c) Subordinated Debt;

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

               (e) Indebtedness secured by Permitted Liens; provided, however,
                                                            -----------------
that indebtedness arising pursuant to liens described in paragraphs (c) and (d)
of the definition of Permitted Liens shall not exceed SEVENTY FIVE THOUSAND AND
NO/100THS Dollars ($75,000) at any time.

               "Permitted Investment" means:

               (a) Investments existing on the Closing Date disclosed in the
Schedule; and

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

               "Permitted Liens" means the following:

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

                                       3
<PAGE>

          (b)  Liens for taxes, fees, assessments or other governmental charges
or levies, provided, either (i) the same have no priority over any of Bank's
security interests, (ii) are not delinquent or (iii) are being contested in good
faith by appropriate proceedings and as to which adequate reserves are
maintained on Borrower's Books in accordance with GAAP;

          (c)  Liens (i) upon or in any Equipment acquired or held by Borrower
or any of its Subsidiaries to secure the purchase price of such Equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such Equipment, or (ii) existing on such equipment at the time of its
acquisition, provided that the Lien is confined solely to the property so
             --------
acquired and improvements thereon, and the proceeds of such equipment;

          (d)  Liens on Equipment leased by Borrower (or any Subsidiary, if any)
pursuant to an operating lease in the ordinary course of business (including
proceeds thereof and accessions thereto) incurred solely for the purpose of
financing the lease of such Equipment (including Liens pursuant to leases
permitted pursuant to Section 7.1 and Liens arising from UCC financing
statements regarding leases permitted by this Agreement).

          (e)  Liens for mechanics, workmen, materialmen, laborers or other
similar liens arising in the ordinary course of business with respect to
obligations that are not yet due and as to which adequate reserves are
maintained on Borrower's Books in accordance with GAAP.

          (f)  Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in
clauses (a) through (c) above, provided that any extension, renewal or
                               --------
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the indebtedness being extended, renewed or
refinanced does not increase.

          (f)  Statutory inchoate liens in connection with workmen's
compensation, unemployment insurance or other social security obligations;

          (g)  Liens arising from judgments in circumstances not constituting an
event of default under Section 8.8.

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

          "Prime Rate" means the variable rate of interest, per annum, most
recently announced by Bank, as its "prime rate," whether or not such announced
rate is the lowest rate available from Bank.

          "Quick Assets" means, as of any applicable date, the consolidated
cash, cash equivalents, accounts receivable and investments with maturities of
fewer than 90 days of Borrower determined in accordance with GAAP.

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

          "Schedule" means the schedule of exceptions attached hereto, if any.

          "Subordinated Debt" means any debt incurred by Borrower that is
subordinated to the debt owing by Borrower to Bank on terms acceptable to Bank
(and identified as being such by Borrower and Bank).

          "Subsidiary" means with respect to any Person, corporation,
partnership, company association, joint venture, or any other business entity of
which more than fifty percent (50%) of the voting stock or other equity
interests is owned or controlled, directly or indirectly, by such Person or one
or more Affiliates of such Person.

                                       4
<PAGE>

               "Tangible Net Worth" means as of any applicable date, the
consolidated total assets of Borrower and its Subsidiaries minus, without
                                                           -----
duplication, (i) the sum of 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) all reserves not already deducted from assets,
and (ii) Total Liabilities.
---
               "Total Liabilities" means as of any applicable date, any date as
of which the amount thereof shall be determined, all obligations that should, in
accordance with GAAP be classified as liabilities on the consolidated balance
sheet of Borrower, including in any event all Indebtedness, but specifically
excluding Subordinated Debt.

          1.2  Accounting and Other Terms. All accounting terms not specifically
               --------------------------
defined herein shall be construed in accordance with GAAP and all calculations
and determinations made hereunder shall be made in accordance with GAAP. When
used herein, the term "financial statements" shall include the notes and
schedules thereto. The terms "including"/"includes" shall always be read as
meaning "including (or includes) without limitation", when used herein or in any
other Loan Document.

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

          2.1  Credit Extensions. Borrower promises to pay to the order of Bank,
               -----------------
in lawful money of the United States of America, the aggregate unpaid principal
amount of all Credit Extensions made by Bank to Borrower hereunder. Borrower
shall also pay interest on the unpaid principal amount of such Credit Extensions
at rates in accordance with the terms hereof.

               2.1.1     Equipment Advances.
                         ------------------

                         (a) Subject to and upon the terms and conditions of
this Agreement, at any time from the date hereof through OCTOBER 9, 1998 (the
"Equipment Availability End Date"), Bank agrees to make advances (each an
"Equipment Advance" and collectively, the "Equipment Advances") to Borrower in
an aggregate outstanding amount not to exceed the Committed Equipment Line. To
evidence the Equipment Advance or Equipment Advances, Borrower shall deliver to
Bank, at the time of each Equipment Advance request, an invoice for the
equipment to be purchased or financed. The Equipment Advances shall be used only
to purchase or finance Equipment purchased after June 30, 1997 and shall not
exceed ONE HUNDRED Percent (100%) of the invoice amount of such equipment
approved from time to time by Bank, excluding taxes, shipping, warranty charges,
freight discounts and installation expense. Software may, however, constitute up
to FIFTEEN percent (15%) of aggregate Equipment Advances. Tenant improvements
may constitute no more than THIRTY FIVE percent (35%) of aggregate Equipment
Advances.

                         (b) Interest shall accrue from the date of each
Equipment Advance at the rate specified in Section 2.2(a), and shall be payable
monthly for each month through the month in which the Equipment Availability End
Date falls. Any Equipment Advances that are outstanding on December 31, 1997
will be payable in FORTY EIGHT (48) equal monthly installments of principal,
plus all accrued interest, beginning on January 9, 1998 and ending on December
9, 2001. Any Equipment Advances made after December 31, 1997 that are
outstanding on March 31, 1998 will be payable in FORTY EIGHT (48) equal monthly
installments of principal, plus all accrued interest, beginning on April 9, 1998
and ending on March 9, 2002. Any Equipment Advances made after March 31, 1998
that are outstanding on June 30, 1998 will be payable in FORTY EIGHT (48) equal
monthly installments of principal, plus all accrued interest, beginning on July
9, 1998 and ending on June 9, 2002. Any Equipment Advances made after June 30,
1998 that are outstanding on October 9, 1998 will be payable in FORTY EIGHT (48)
equal monthly installments of principal, plus all accrued interest, beginning on
November 9, 1998 and ending on October 9, 2002. Equipment Advances, once repaid,
may not be reborrowed.

                         (c) When Borrower desires to obtain an Equipment
Advance, Borrower shall notify Bank (which notice shall be irrevocable) by
facsimile transmission to be received no later than 3:00 p.m. Pacific time one
(1) Business Day before the day on which the Equipment Advance is to be made.
Such

                                       5

<PAGE>

notice shall be substantially in the form of Exhibit B. The notice shall be
signed by a Responsible Officer or its designee and include a copy of the
invoice(s) for the Equipment to be financed.

          2.2  Interest Rates, Payments, and Calculations.
               ------------------------------------------

               (a)  Interest Rate. Except as set forth in Section 2.2(b), any
                    -------------
Equipment Advances shall bear interest, on the average daily balance thereof, at
a per annum rate equal to ONE (1.0) percentage point above the Prime Rate.

               (b)  Default Rate. All Obligations shall bear interest, from and
                    ------------
after the occurrence of an Event of Default, at a rate equal to five (5)
percentage points above the interest rate applicable immediately prior to the
occurrence of the Event of Default.

               (c)  Payments. Interest hereunder shall be due and payable on
                    --------
each Payment Date. Borrower hereby authorizes Bank to debit any accounts with
Bank, including, without limitation, Account Number ______________ for payments
of principal and interest due on the Obligations and any other amounts owing by
Borrower to Bank. Bank will notify Borrower of all debits which Bank has made
against Borrower's accounts. Any such debits against Borrower's accounts in no
way shall be deemed a set-off. Any interest not paid when due shall be
compounded by becoming a part of the Obligations, and such interest shall
thereafter accrue interest at the rate then applicable hereunder.

               (d)  Computation. In the event the Prime Rate is changed from
                    -----------
time to time hereafter, the applicable rate of interest hereunder shall be
increased or decreased effective as of 12:01 a.m. on the day the Prime Rate is
changed, by an amount equal to such change in the Prime Rate. All interest
chargeable under the Loan Documents shall be computed on the basis of a three
hundred sixty (360) day year for the actual number of days elapsed.

          2.3  Crediting Payments. Prior to the occurrence of an Event of
               ------------------
Default, Bank shall credit a wire transfer of funds, check or other item of
payment to such deposit account or Obligation as Borrower specifies. After the
occurrence of an Event of Default, the receipt by Bank of any wire transfer of
funds, check, or other item of payment, whether directed to Borrower's deposit
account with Bank or to the Obligations or otherwise, shall be immediately
applied to conditionally reduce Obligations, but shall not be considered a
payment in respect of the Obligations unless such payment is of immediately
available federal funds or unless and until such check or other item of payment
is honored when presented for payment. Notwithstanding anything to the contrary
contained herein, any wire transfer or payment received by Bank after 12.00 noon
Pacific time shall be deemed to have been received by Bank as of the opening of
business on the immediately following Business Day. Whenever any payment to Bank
under the Loan Documents would otherwise be due (except by reason of
acceleration) on a date that is not a Business Day, such payment shall instead
be due on the next Business Day, and additional fees or interest, as the case
may be, shall accrue and be payable for the period of such extension.

          2.4  Fees. Borrower shall pay to Bank the following:
               ----

               (a)  Facility Fee. A Facility Fee equal to THREE THOUSAND TWO
                    ------------
HUNDRED FIFTY Dollars ($3,250), which fee shall be due on the Closing Date and
shall be fully earned and nonrefundable;

               (b)  Financial Examination and Appraisal Fees. Bank's customary
                    ----------------------------------------
fees and out-of-pocket expenses for Bank's audits of Borrower's Accounts, and
for each appraisal of Collateral and financial analysis and examination of
Borrower performed from time to time, but no more than two (2) times each
calendar year unless an Event of Default has occurred and is continuing, by Bank
or its agents;

               (c)  Bank Expenses. Upon demand from Bank, including, without
                    -------------
limitation, upon the date hereof, all Bank Expenses incurred through the date
hereof, including reasonable attorneys' fees and expenses, and, after the date
hereof, all Bank Expenses, including reasonable attorneys' fees and expenses, as
and when they become due.

                                       6
<PAGE>

          2.5  Additional Costs. In case any law, regulation, treaty or official
               ----------------
directive or the interpretation or application thereof by any court or any
governmental authority charged with the administration thereof or the compliance
with any guideline or request of any central bank or other governmental
authority (whether or not having the force of law):

               (a)  subjects Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by Borrower or
otherwise with respect to the transactions contemplated hereby (except for taxes
on the overall net income of Bank imposed by the United States of America or any
political subdivision thereof);

               (b)  imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by, or
deposits in or for the account of, or loans by, Bank; or

               (c)  imposes upon Bank any other condition with respect to its
performance under this Agreement,

and the result of any of the foregoing is to increase the cost to Bank, reduce
the income receivable by Bank or impose any expense upon Bank with respect to
any loans, Bank shall notify Borrower thereof. Borrower agrees to pay to Bank
the amount of such increase in cost, reduction in income or additional expense
as and when such cost, reduction or expense is incurred or determined, upon
presentation by Bank of a statement of the amount and setting forth Bank's
calculation thereof, all in reasonable detail, which statement shall be deemed
true and correct absent manifest error.

          2.6  Term. Except as otherwise set forth herein, this Agreement shall
               ----
become effective on the Closing Date and, subject to Section 12.7, shall
continue in full force and effect for a term ending on October 9, 2002.
Notwithstanding the foregoing, Bank shall have the right to terminate its
obligation to make Credit Extensions under this Agreement immediately and
without notice upon the occurrence and during the continuance of an Event of
Default. Notwithstanding termination of this Agreement, Bank's lien on the
Collateral shall remain in effect for so long as any Obligations are
outstanding.

     3.   CONDITIONS OF LOANS
          -------------------

          3.1  Conditions Precedent to Initial Credit Extension. The obligation
               ------------------------------------------------
of Bank to make the initial Credit Extension is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:

               (a)  this Agreement and the Equipment Line Promissory Note each
duly executed by Borrower;

               (b)  a certificate of the Secretary of Borrower with respect to
charter, bylaws, incumbency and resolutions authorizing the execution and
delivery of this Agreement;

               (c)  financing statements (Forms UCC-1);

               (d)  insurance certificate;

               (e)  payment of the fees and Bank Expenses then due specified in
Section 2.4 hereof;

               (f)  Certificate of Foreign Qualification (if applicable);

               (g)  Quarterly P&L and Cash Flow forecasts for the two fiscal
years following the Closing Date;

                                       7
<PAGE>

               (h)  a Borrower prepared consolidated balance sheet and income
statement covering Borrower's consolidated operations during the month
immediately prior to such initial Credit Extension, in a form and certified by
an officer of Borrower reasonably acceptable to Bank; and

               (i)  such other documents, and completion of such other matters,
as Bank may reasonably deem necessary or appropriate.

          3.2  Conditions Precedent to all Credit Extensions. The obligation of
               ---------------------------------------------
Bank to make each Credit Extension, including the initial Credit Extension, is
further subject to the following conditions:

               (a)  timely receipt by Bank of the Payment/Advance Form as
provided in Section 2.1; and

               (b)  the representations and warranties contained in Section 5
shall be true and correct in all material respects on and as of the date of such
Payment/Advance Form and on the effective date of each Credit Extension as
though made at and as of each such date, and no Event of Default shall have
occurred and be continuing, or would result from such Credit Extension. The
making of each Credit Extension shall be deemed to be a representation and
warranty by Borrower on the date of such Credit Extension as to the accuracy of
the facts referred to in this Section 3.2(b).

     4.   CREATION OF SECURITY INTEREST
          -----------------------------

          4.1  Grant of Security Interest. Borrower grants and pledges to Bank
               --------------------------
a continuing security interest in all presently existing and hereafter acquired
or arising Collateral in order to secure prompt payment of any and all
Obligations and in order to secure prompt performance by Borrower of each
of its covenants and duties under the Loan Documents. Except as set forth in the
Schedule, such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a valid,
first priority security interest in Collateral acquired after the date hereof.
Notwithstanding termination of this Agreement, Bank's Lien on the Collateral
shall remain in effect for so long as any Obligations are outstanding.

          4.2  Delivery of Additional Documentation Required. Borrower shall
               ---------------------------------------------
from time to time execute and deliver to Bank, at the request of Bank, all
financing statements and other documents that Bank may reasonably request, in
form satisfactory to Bank, to perfect and continue perfected Bank's security
interests in the Collateral and in order to fully consummate all of the
transactions contemplated under the Loan Documents.

          4.3  Right to Inspect. Bank (through any of its officers, employees,
               ----------------
or agents) shall have the right, upon reasonable prior notice, from time to time
during Borrower's usual business hours, to inspect Borrower's Books and to make
copies thereof and to check, test, and appraise the Collateral in order to
verify Borrower's financial condition or the amount, condition of, or any other
matter relating to, the Collateral.

     5.   REPRESENTATIONS AND WARRANTIES
          ------------------------------

          Borrower represents and warrants as follows:

          5.1  Due Organization and Qualification. Borrower (and each
               ----------------------------------
Subsidiary, if any) is a corporation duly existing and in good standing under
the laws of its state of incorporation and qualified and licensed to do business
in, and is in good standing in, any state in which the conduct of its business
or its ownership of property requires that it be so qualified, except where the
failure to be so qualified would not have a Material Adverse Effect.

          5.2  Due Authorization; No Conflict. The execution, delivery, and
               ------------------------------
performance of the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Certificate of Incorporation or Bylaws, nor
will they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound.

                                       8
<PAGE>

Borrower is not in default under any agreement to which it is a party or by
which it is bound, which default could have a Material Adverse Effect.

          5.3  No Prior Encumbrances.  Borrower has good and indefeasible title
               ---------------------
to the Collateral, free and clear of Liens, except for Permitted Liens.

          5.4  Name; Location of Chief Executive Office.  Except as disclosed
               ----------------------------------------
in the Schedule, Borrower has not done business and will not without at least
thirty (30) days prior written notice to Bank do business under any name other
than that specified on the signature page hereof. The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.

          5.5  Litigation.  Except as set forth in the Schedule, there are no
               ----------
actions or proceedings pending, or, to Borrower's knowledge, threatened by or
against Borrower (or any Subsidiary, if any) before any court or administrative
agency in which an adverse decision could have a Material Adverse Effect or a
material adverse effect on Borrower's interest or Bank's security interest in
the Collateral.

          5.6  No Material Adverse Change in Financial Statements.  All
               --------------------------------------------------
consolidated financial statements related to Borrower (and any Subsidiary, if
any) that have been delivered by Borrower to Bank fairly present in all
material respects Borrower's consolidated financial condition as of the date
thereof and Borrower's consolidated results of operations for the period then
ended. There has not been a material adverse change in the consolidated
financial condition of Borrower since the date of the most recent of such
financial statements submitted to Bank on or about the Closing Date.

          5.7  Solvency.  The fair saleable value of Borrower's assets
               --------
(including goodwill minus disposition costs) exceeds the fair value of its
liabilities; and Borrower is able to pay its debts (including trade debts) as
they mature.

          5.8  Regulatory Compliance.  Borrower (and each Subsidiary, if any)
               ---------------------
has met the minimum funding requirements of ERISA with respect to any
employee benefit plans subject to ERISA. No event has occurred resulting from
Borrower's failure to comply with ERISA that is reasonably likely to result in
Borrower's incurring any liability that could have a Material Adverse Effect.
Borrower is not an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940.
Borrower is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations G, T and U of the Board of
Governors of the Federal Reserve System). Borrower has complied with all the
provisions of the Federal Fair Labor Standards Act, except to the extent a
failure to comply will not have a Material Adverse Effect. Borrower has not
violated any statutes, laws, ordinances or rules applicable to it, violation
of which could have a Material Adverse Effect.

          5.9  Environmental Condition. None of Borrower's (or any Subsidiary's,
               -----------------------
if any) properties or assets has ever been used by Borrower (or any Subsidiary,
if any) or, to the best of Borrower's knowledge, by previous owners or
operators, in the disposal of, or to produce, store, handle, treat, release, or
transport, any hazardous waste or hazardous substance other than in accordance
with applicable law; to the best of Borrower's knowledge, none of Borrower's
properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a hazardous waste or
hazardous substance disposal site, or a candidate for closure pursuant to any
environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and Borrower (and any Subsidiary,
if any) has not received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower (or any
Subsidiary, if any) resulting in the release, or other disposition of hazardous
waste or hazardous substances into the environment.

          5.10 Taxes.  Borrower (and each Subsidiary, if any) has filed or
               -----
caused to be filed all tax returns required to be filed on a timely basis,
subject to applicable extensions duly filed for, and has paid, or has made
adequate provision for the payment of, all taxes reflected therein.

                                       9

<PAGE>

          5.11 Subsidiaries. Borrower does not own any stock, partnership
               ------------
interest or other equity securities of any Person, except for Permitted
Investments.

          5.12 Government Consents. Borrower (and each Subsidiary, if any) has
               -------------------
obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all governmental authorities that are
necessary for the continued operation of Borrower's business as currently
conducted, except where the failure to do so would not have a Material Adverse
Effect.

          5.13 Full Disclosure. No representation, warranty or other statement
               ---------------
made by Borrower in any certificate or written statement furnished to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained in such certificates or
statements not misleading.

     6.   AFFIRMATIVE COVENANTS
          ---------------------

          Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as Bank may have any commitment to make
a Credit Extension hereunder, Borrower shall do all of the following:

          6.1  Good Standing. Borrower shall maintain its and each of its
               -------------
Subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, to the extent
consistent with prudent management of Borrower's business, in force all
licenses, approvals and agreements, the loss of which could have a Material
Adverse Effect.

          6.2  Government Compliance. Borrower shall meet, and shall cause
               ---------------------
each Subsidiary to meet, the minimum funding requirements of ERISA with respect
to any employee benefit plans subject to ERISA. Borrower shall comply, and shall
cause each Subsidiary to comply, with statutes, laws, ordinances and government
rules and regulations to which it is subject, noncompliance with which could
have a Material Adverse Effect or a material adverse effect on the Collateral or
the priority of Bank's Lien on the Collateral.

          6.3  Financial Statements, Reports, Certificates. Borrower shall
               -------------------------------------------
deliver to Bank:

               (a) as soon as available, but in any event within thirty (30)
days after the end of each month, a company prepared consolidated balance sheet
and income statement covering Borrower's consolidated operations during such
period, in a form and certified by an officer of Borrower reasonably acceptable
to Bank;

               (b) as soon as available, but in any event within ninety (90)
days after the end of Borrower's fiscal year, audited consolidated financial
statements of Borrower prepared in accordance with GAAP, consistently applied,
together with an unqualified opinion on such financial statements of an
independent certified public accounting firm reasonably acceptable to Bank;

               (c) within five (5) days of filing with any governmental
regulatory authority, copies of all statements, reports and notices filed with
any such authority and sent or made available generally by Borrower to its
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.

               (d) promptly upon receipt of notice thereof, a report of any
legal actions pending or threatened against Borrower (or any Subsidiary, if any)
that Borrower reasonably believes could result in damages or costs to Borrower
(or any Subsidiary, if any) of Seventy Five Thousand Dollars ($75,000) or more;

               (e) such budgets, sales projections, operating plans or other
financial information as Bank may reasonably request from time to time.

                                      10
<PAGE>

          (f)  within thirty (30) days after the last day of each month quarter,
with the monthly quarterly financial statements, a Compliance Certificate signed
by a Responsible Officer in substantially the form of Exhibit C hereto.
                                                      ---------

     6.4  Inventory; Returns. Borrower shall keep all inventory in good and
          ------------------
marketable condition, free from all material defects. Returns and allowances, if
any, as between Borrower and its account debtors shall be on the same basis and
in accordance with the usual customary practices of Borrower, as they exist from
time to time. Borrower shall promptly notify Bank of all returns and recoveries
and of all disputes and claims, where the return, recovery, dispute or claim
involves more than Fifty Thousand Dollars ($50,000).

     6.5  Taxes. Borrower shall make, and shall cause each Subsidiary to make,
          -----
due and timely payment or deposit of all material federal, state, and local
taxes, assessments, or contributions required of it by law, subject to
applicable extensions duly filed for, and will execute and deliver to Bank, on
demand, appropriate certificates attesting to the payment or deposit thereof,
and Borrower will make, and will cause each Subsidiary to make, timely payment
or deposit of all material tax payments and withholding taxes required of it by
applicable laws, including, but not limited to, those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal income taxes, and
will, upon request, furnish Bank with proof satisfactory to Bank indicating that
Borrower or a Subsidiary has made such payments or deposits; provided that
Borrower or a Subsidiary need not make any payment if the amount or validity of
such payment is (i) contested in good faith by appropriate proceedings, (ii) is
reserved against (to the extent required by GAAP) by Borrower and (iii) no lien
other than a Permitted Lien results.

     6.6  Insurance.
          ---------

          (a)  Borrower, at its expense, shall keep the Collateral insured
against loss or damage by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in such amounts, as ordinarily insured against by other
owners in similar businesses conducted in the locations where Borrower's
business is conducted on the date hereof. Borrower shall also maintain insurance
relating to Borrower's ownership and use of the Collateral in amounts and of a
type that are customary to businesses similar to Borrower's.

          (b)  All such policies of insurance shall be in such form, with such
companies, and in such amounts as are reasonably satisfactory to Bank. All such
policies of property insurance shall contain a lender's loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee thereof and all liability insurance policies shall show the Bank as an
additional insured, and shall specify that the insurer must give at least twenty
(20) days notice to Bank before canceling its policy for any reason. At Bank's
request, Borrower shall deliver to Bank certified copies of such policies of
insurance and evidence of the payments of all premiums therefor. All proceeds
payable under any such policy shall, at the option of Bank, be payable to Bank
to be applied on account of the Obligations.

     6.7  Principal Depository.  Borrower shall maintain its principal
          --------------------
depository and operating accounts with Bank.

     6.8  Tangible Net Worth. Borrower shall maintain, as of the last day of
          ------------------
each calendar month, a Tangible Net Worth Ratio of at least 2.0:1.0. Tangible
Net Worth Ratio is defined as the ratio of Tangible New Worth over the total
outstanding Equipment Advances pursuant to this Agreement.

     6.9  Liquidity.  Borrower shall maintain, as of the last calendar day of
          ---------
each month, a Liquidity Ratio of at least 2.0:1.0. Liquidity Ratio is defined as
the ratio of cash on hand (and cash equivalents) over the total outstanding
Equipment Advances pursuant to this Agreement.

     6.10 Further Assurances.  At any time and from time to time Borrower shall
          ------------------
execute and deliver such further instruments and take such further action as may
reasonably be requested by Bank to effect the purposes of this Agreement.

                                      11
<PAGE>

     7.   NEGATIVE COVENANTS
          ------------------

          Borrower covenants and agrees that, so long as any Credit Extension
hereunder shall be available and until payment in full of the outstanding
Obligations or for so long as Bank may have any commitment to make any Advances,
Borrower will not do any of the following:

          7.1  Dispositions. Convey, sell, lease, transfer or otherwise dispose
               ------------
of (collectively, a "Transfer"), (or permit any of its Subsidiaries, if any, 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 licenses and
similar arrangements for the use of the property of Borrower or its Subsidiaries
in the ordinary course of business, provided that within 30 days after the end
of each calendar quarter Borrower shall provide Bank with a report of exclusive
licenses granted during that calendar quarter just ended, (iii) that constitute
payment of normal and usual operating expenses in the ordinary course of
business, or (iv) of worn-out or obsolete Equipment.

          7.2  Changes in Business, Ownership, or Management, Business
               -------------------------------------------------------
Locations. Engage in any business, or permit any of its Subsidiaries to engage
---------
in any business, other than the businesses currently engaged in by Borrower and
any business substantially similar or related thereto (or incidental thereto),
or suffer a change in Borrower's ownership or management without the prior
written consent of Bank, which consent shall not be unreasonably withheld.
Borrower will not, without at least thirty (30) days prior written notification
to Bank, relocate its chief executive office or add any new offices or business
locations.

          7.3  Mergers or Acquisitions. Merge or consolidate, or permit any of
               -----------------------
its Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person.

          7.4  Indebtedness. Create, incur, assume or be or remain liable with
               ------------
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.

          7.5  Encumbrances. Create, incur, assume or suffer to exist any Lien
               ------------
with respect to any of the collateral, or assign or otherwise convey any right
to the Collateral (or permit any of its Subsidiaries, if any, so to do), except
for Permitted Liens.

          7.6  Distributions. Pay any dividends or make any other distribution
               -------------
or payment on account of or in redemption, retirement or purchase of any capital
stock.

          7.7  Investments. Directly or indirectly acquire or own, or make any
               -----------
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.

          7.8  Transactions with Affiliates. Directly or indirectly enter into
               ----------------------------
or permit to exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms that are no less favorable to Borrower than would
be obtained in an arm's length transaction with a non-affiliated Person.

          7.9  Subordinated Debt. Make any payment in respect of any
               -----------------
Subordinated Debt, or permit any of its Subsidiaries to make any such payment,
except in compliance with the terms of such Subordinated Debt, or amend any
provision contained in any documentation relating to the Subordinated Debt
without Bank's prior written consent.

          7.10 Collateral. Store the Collateral with a bailee, warehouseman, or
               ----------
similar party unless Bank has received a pledge of any warehouse receipt
covering such Collateral. Except for Collateral sold in the ordinary course of
business and except for such other locations as Bank may approve in writing,
Borrower shall keep the Collateral only at the location set forth in Section 10
hereof and such other locations of which Borrower gives Bank prior written
notice and as to which Borrower signs and files a financing statement where
needed to perfect Bank's security interest.

                                      12
<PAGE>

               7.11 Compliance. Become an "investment company" or a company
                    ----------
controlled by an "investment company," within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Advance for such
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, which violation could have a Material Adverse Effect or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral; or permit any of its Subsidiaries to do any of the foregoing.

          8.   EVENTS OF DEFAULT
               -----------------

               Any one or more of the following events shall constitute an
Event of Default by Borrower under this Agreement:

               8.1  Payment Default. If Borrower fails to pay, when due, any of
                    ---------------
the Obligations.

               8.2  Covenant Default.
                    ----------------

                    (a)  If Borrower fails to perform any obligation under
Sections 6.3, 6.6, 6.7, 6.8 or 6.9 or violates any of the covenants contained in
Article 7 of this Agreement, or

                    (b)  If Borrower fails or neglects to perform, keep, or
observe any other material term, provision, condition, covenant, or agreement
contained in this Agreement, in any of the Loan Documents, or in any other
present or future agreement between Borrower and Bank and as to any default
under such other term, provision, condition, covenant or agreement that can be
cured, has failed to cure such default within ten (10) days after the occurrence
thereof, provided, however, that if the default cannot by its nature be cured
within the ten (10) day period or cannot after diligent attempts by Borrower be
cured within such ten (10) day period, and such default is likely to be cured
within a reasonable time, then Borrower shall have an additional reasonable
period (which shall not in any case exceed thirty (30) days) to attempt to cure
such default, and within such reasonable time period the failure to have cured
such default shall not be deemed an Event of Default (provided that no Advances
will be required to be made during such cure period);

               8.3  Material Adverse Change. If there (i) occurs a material
                    -----------------------
adverse change in the business, operations, or condition (financial or
otherwise) of the Borrower, or (ii) is a material impairment of the prospect of
repayment of any portion of the Obligations, or (iii) is a material impairment
of the value or priority of Bank's security interests in the Collateral;

               8.4  Attachment. If any material portion of Borrower's assets is
                    ----------
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment if filed or
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within thirty (30)
days after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period);

               8.5  Insolvency. If Borrower becomes insolvent, or if an
                    ----------
Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding
is commenced against Borrower and is not dismissed or stayed within 30 days
(provided that no Credit Extensions will be made prior to the dismissal of such
Insolvency Proceeding);

                                      13

<PAGE>

          8.6  Other Agreements. If there is a default in any agreement to which
               ----------------
Borrower is a party with a third party or parties resulting in a right by such
third party or parties, whether or not exercised, to accelerate the maturity of
any indebtedness in an amount in excess of One Hundred Thousand Dollars
($100,000) or that could have a Material Adverse Effect;

          8.7  Subordinated Debt. If Borrower makes any payment on account of
               -----------------
Subordinated Debt, except to the extent such payment is allowed under any
subordination agreement entered into with Bank;

          8.8  Judgments. If a judgment or judgments for the payment of money
               ---------
in an amount, individually or in the aggregate, of at least Fifty Thousand
Dollars ($50,000) shall be rendered against Borrower and shall remain
unsatisfied, unappealed or unstayed for a period of thirty (30) days (provided
that no Credit Extensions will be made prior to the satisfaction or stay of such
judgment); or

          8.9  Misrepresentations. If any material misrepresentation or material
               ------------------
misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate or writing delivered to Bank by Borrower or any
Person acting on Borrower's behalf pursuant to this Agreement or to induce Bank
to enter into this Agreement or any other Loan Document.

     9.   BANK'S RIGHTS AND REMEDIES
          --------------------------

          9.1  Rights and Remedies. Upon the occurrence and during the
               -------------------
continuance of an Event of Default, Bank may, at its election, without notice of
its election and without demand, do any one or more of the following, all of
which are authorized by Borrower;

               (a)  Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.5 all Obligations shall become immediately due and payable without any
action by Bank);

               (b)  Cease advancing money or extending credit to or for the
benefit of Borrower under this Agreement or under any other agreement between
Borrower and Bank;

               (c)  Without notice to or demand upon Borrower, make such
payments and do such acts as Bank considers necessary or reasonable to protect
its security interest in the Collateral. Borrower agrees to assemble the
Collateral if Bank so requires, and to make the Collateral available to Bank as
Bank may designate. Borrower authorizes Bank to enter the premises where the
Collateral is located, to take and maintain possession of the Collateral, or any
part of it, and to pay, purchase, contest or compromise any encumbrance, charge,
or lien which in Bank's determination appears to be prior or superior to its
security interest and to pay all expenses incurred in connection therewith. With
respect to any of Borrower's premises, Borrower hereby grants Bank a license to
enter such premises and to occupy the same, without charge in order to exercise
any of Bank's rights or remedies provided herein, at law, in equity, or
otherwise;

               (d)  Without notice to Borrower set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by Bank, or
(ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank;

               (e)  Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral. Bank is hereby granted a non-exclusive, royalty-free
license or other right, solely pursuant to the provisions of this Section 9.1,
to use, without charge, Borrower's labels, patents, copyrights, mask works,
rights of use of any name, trade secrets, trade names, trademarks, service
marks, and advertising matter, or any property of a similar nature, as it
pertains to the Collateral, in completing production of, advertising for sale,
and selling any Collateral and, in connection with Bank's exercise of its rights
under this Section 9.1, Borrower's rights under all licenses and all franchise
agreements shall inure to Bank's benefit;

                                      14
<PAGE>

               (f)  Sell the Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including Borrower's premises) as Bank
determines is commercially reasonable, and apply the proceeds thereof to the
Obligations in whatever manner or order it deems appropriate;

               (g)  Bank may credit bid and purchase at any public sale, or at
any private sale as permitted by law; and

               (h)  Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.

          9.2  Power of Attorney. Effective only upon the occurrence and during
               -----------------
the continuance of an Event of Default, Borrower hereby irrevocably appoints
Bank (and any of Bank's designated officers, or employees) as Borrower's true
and lawful attorney to: (a) make, settle, and adjust all claims under and
decisions with respect to Borrower's policies of insurance as they relate to the
Collateral; and (b) to file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of Borrower where permitted by law provided
Bank may exercise such power of attorney to sign the name of Borrower on any of
the documents described in Section 4.2 regardless of whether an Event of Default
has occurred. The appointment of Bank as Borrower's attorney in fact, and each
and every one of Bank's rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully repaid and performed
and Bank's obligation to provide advances hereunder is terminated.

          9.3  Bank Expenses. If Borrower fails to pay any amounts or furnish
               -------------
any required proof of payment due to third persons or entities, as required
under the terms of this Agreement, then Bank may do any or all of the
following: (a) make payment of the same or any part thereof; (b) set up such
reserves under the Committed Equipment Line as Bank deems necessary to protect
Bank from the exposure created by such failure; or (c) obtain and maintain
insurance policies of the type discussed in Section 6.6 of this Agreement, and
take any action with respect to such policies as Bank deems prudent. Any amounts
so paid or deposited by Bank shall constitute Bank Expenses, shall be
immediately due and payable, and shall bear interest at the then applicable rate
hereinabove provided, and shall be secured by the Collateral. Any payments made
by Bank shall not constitute an agreement by Bank to make similar payments in
the future or a waiver by Bank of any Event of Default under this Agreement.

          9.4  Bank's Liability for Collateral. So long as Bank complies with
               -------------------------------
reasonable banking practices, Bank shall not in any way or manner be liable or
responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower.

          9.5  Remedies Cumulative. Bank's rights and remedies under this
               -------------------
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not expressly set forth herein as
provided under the Code, by law, or in equity. No exercise by Bank of one right
or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank
shall constitute a waiver, election, or acquiescence by it. No waiver by Bank
shall be effective unless made in a written document signed on behalf of Bank
and then shall be effective only in the specific instance and for the specific
purpose for which it was given.

          9.6  Demand; Protest. Borrower waives demand, protest, notice of
               ---------------
protest, 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 at any time held by Bank on which Borrower may in any way be liable.

     10.  NOTICES
          -------

          Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for

                                      15
<PAGE>

financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by a
recognized overnight delivery service, by certified mail, postage prepaid,
return receipt requested, or by telefacsimile to Borrower or to Bank, as the
case may be, at its addresses set forth below, provided, however, that the
effectiveness of any of the provisions of this Agreement shall not require
notice to Borrower's legal counsel:

     If to Borrower      OraPharma, Inc.
                         1200 Route 22 East, Suite 2000
                         Bridgewater, New Jersey 08807
                         Attn: James A. Ratigan, VP, CFO
                         FAX: (908)253-9508

     With a copy to:     Sills Cummis Zuckerman, et al.
                         One Riverfront Plaza
                         Newark, NJ 07102
                         ATTN: Ira A. Rosenberg, Esq.
                         FAX: (973)643-6500

     If to Bank          Silicon Valley Bank
                         40 William Street
                         Wellesley, MA 02181
                         Attn: Joan Parsons
                         FAX: 617-431-9906

The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.

     11.  CHOICE OF LAW AND VENUE
          -----------------------

     The laws of the Commonwealth of Massachusetts shall apply to this
Agreement. BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT,
OR PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF OF
THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, BORROWER ACCEPTS JURISDICTION
OF THE COURTS AND VENUE IN SANTA CLARA COUNTY, CALIFORNIA. BORROWER AND BANK
EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY
RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.

     12.  GENERAL PROVISIONS
          ------------------

          12.1   Successors and Assigns. This Agreement shall bind and inure to
                 ----------------------
the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
         --------  -------
may be assigned by Borrower without Bank's prior written consent, which consent
may be granted or withheld in Bank's sole discretion. Bank shall have 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 hereunder.

                                      16
<PAGE>

          12.2   Indemnification. Borrower shall indemnify, defend; protect and
                 ---------------
hold harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with, resulting from or arising out of any action, inaction
or status of Borrower; and (b) all losses or Bank Expenses in any way suffered,
incurred, or paid by Bank as a result of or in any way arising out of,
following, or consequential to transactions between Bank and Borrower whether
under the Loan Documents, or otherwise (including without limitation reasonable
attorneys fees and expenses), except for losses or Bank Expenses 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 set forth in this Agreement.

          12.4   Severability of Provisions. Each provision of this Agreement
                 --------------------------
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.

          12.5   Amendments in Writing, Integration. This Agreement cannot be
                 ----------------------------------
amended or terminated except by a writing signed by Borrower and Bank. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement,
if any, are merged 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, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.

          12.7   Survival. All covenants, representations and warranties made in
                 --------
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run;
provided that so long as the Obligations have been satisfied, and Bank has no
commitment to make any Credit Extensions or to make any other loans to Borrower,
Bank shall release all security interests granted hereunder and redeliver all
Collateral held by it in accordance with applicable law.

          12.8   Effectiveness. This Agreement shall become effective only when
                 -------------
it shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date first set forth above.

"Borrower"                                   "Bank"

ORAPHARMA, INC.                              SILICON VALLEY BANK, doing business
                                             as SILICON VALLEY EAST

By: /s/ Michael D. Kishbauch                 By: /s/ Phillip S. Ernst
    -----------------------------------          ---------------------------
    Michael D. Kishbauch, President, CEO              Phillip S. Ernst, VP

By: /s/ James A. Ratigan                     SILICON VALLEY BANK
    -------------------------------------
   James A. Ratigan, VP & CFO
                                             By: /s/ [ILLEGIBLE]
                                                 ---------------------------

                                             Title: Documentation Officer
                                                    -------------------------
                                             (Signed in Santa Clara County,
                                              California)

                                      17

<PAGE>

                                   EXHIBIT A
                                   ---------

     The Collateral shall consist of all right, title and interest of Borrower
in and to the following:

     (a)  All goods and equipment now or hereafter financed by Bank, 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;

     (b)  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.

                                      18

<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)____________                                      TIME:_____________

FROM:___________________________________________________________________________
BORROWER'S NAME

FROM:___________________________________________________________________________
AUTHORIZED SIGNER'S NAME

________________________________________________________________________________
AUTHORIZED SIGNATURE

PHONE:__________________________________________________________________________

FROM ACCOUNT #_________________________ TO ACCOUNT #____________________________

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

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

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

All representations and warranties of Borrower stated in the Loan and Security
Agreement dated as of October 10, 1997 are true, correct and complete in all
material respects as of the date of the telephone request for and Advance
confirmed by this Advance Request, provided, however, that those representations
and warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such 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

                              ______________________________
                              Authorized Signature (Bank)
                              Phone #_______________________

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

                                      19
<PAGE>

                                   EXHIBIT C
                                   ---------
                          COMPLIANCE CERTIFICATE
                          ----------------------

Borrower:   OraPharma, Inc.                       Lender: Silicon Valley Bank
            1200 Route 22 East, Suite 2000                3003 Tasman Drive
            Bridgewater, New Jersey 08807                 Santa Clara, CA 95054

     The undersigned authorized officer of ORAPHARMA, INC. hereby certifies that
in accordance with the terms and conditions of the Loan and Security Agreement
dated as of October 10, 1997 between Borrower and Bank (the "Agreement"), (i)
Borrower is in complete compliance for the period ending ________________ of all
required conditions and terms set forth below except as noted below and (ii) all
representations and warranties of Borrower stated in the Agreement are true,
accurate and complete in all material respects as of the date hereof. Attached
herewith are the required documents supporting the above certification. The
Officer further certifies that these are prepared in accordance with Generally
Accepted Accounting Principals (GAAP) and are consistent from one period to the
next except as explained in an accompanying letter or footnotes. The Officer
further expressly acknowledges Borrower may not request any borrowings at any
time or date of determination that Borrower is not in compliance with any of the
terms of the Agreement, and that such compliance is determined not just at the
date this certificate is delivered.

 Please indicate compliance status by circling Yes/No under "Complies" column

     Reporting Covenant                      Required                 Complies
     ------------------                      --------                 --------

--------------------------------------------------------------------------------
Monthly financial statements            Monthly within 30 days        Yes    No
--------------------------------------------------------------------------------
Annual (CPA Audited) FYE 12/31/96       Prior to 9/30/97              Yes    No
--------------------------------------------------------------------------------
Annual (CPA Audited) FYE 12/31/97       FYE within 90 days            Yes    No
and thereafter
--------------------------------------------------------------------------------

     Financial Covenants           Required       Actual              Complies
     -------------------           --------       ------              --------

--------------------------------------------------------------------------------
Maintain on a Monthly Basis:
--------------------------------------------------------------------------------
  Minimum TNW Ratio                2.0:1.0           :1.0              Yes    No
--------------------------------------------------------------------------------
  Minimum Liquidity Ratio          2.0:1.0           :1.0              Yes    No
--------------------------------------------------------------------------------

Comments Regarding Exceptions:

Sincerely,

________________________                         _______________________________
Signature                                                    BANK USE ONLY
                                                 Received by:___________________
________________________                         Date:__________________________
TITLE                                            Received by:___________________
                                                 Compliance Status:    Yes   No
________________________                        ________________________________
DATE

                                      20

<PAGE>

                          LOAN MODIFICATION AGREEMENT

     This LOAN MODIFICATION AGREEMENT is entered into as of December 8, 1998, by
and between SILICON VALLEY BANK, a California-chartered bank with its principal
place of business at 3003 Tasman Drive, Santa Clara, CA 95054 and with a loan
production office located at Wellesley Office Park, 40 William Street, Suite
350, Wellesley, MA 02481, doing business under the name "Silicon Valley East
("Bank"), and ORAPHARMA, INC., a Delaware corporation with its principal place
of business at 732 Louis Drive, Warminster, PA 18974 ("Borrower").

                                   RECITALS

     Borrower has borrowed money from Bank pursuant to certain Existing Loan
Documents, as defined below. In consideration of certain financial
accommodations from Bank, and Borrower's continuing obligations under the
Existing Loan Documents, Borrower and Bank agree as follows:

                                   AGREEMENT

     1.   DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which
          ------------------------------------
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to,
among other documents, a Loan and Security Agreement dated as of October 10,
1997 between Borrower and Bank providing for an extension of credit up to a
maximum of SEVEN HUNDRED FIFTY THOUSAND AND NO/100THS DOLLARS ($750,000) (the
"Loan Agreement").

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

     2.   DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured
          -------------------------
pursuant to the Loan Agreement. Hereinafter, the Loan Agreement, together with
all other documents securing payment of the indebtedness, shall be referred to
as the "Existing Loan Documents."

     3.   DESCRIPTION OF CHANGES IN TERMS.
          -------------------------------

     3.1  Modifications to Definitions. Section 1.1 of the Loan Agreement is
          ----------------------------
hereby amended by substituting the following definitions for those set forth
therein for the same terms:

          "Maturity Date" means December 9, 2002.

     3.1  Modifications to Equipment Advance Provisions. Section 2.1.1 of the
          ---------------------------------------------
Loan Agreement is hereby replaced in its entirety with the following:

          2.1.1   Equipment Advances.
                  ------------------

          (a)     Subject to and upon the terms and conditions of this
          Agreement, at any time from the date hereof through DECEMBER
          31, 1998 (the "Equipment Availability End Date"), Bank
          agrees to make advances (each an "Equipment Advance" and
          collectively, the "Equipment Advances") to Borrower in an
          aggregate outstanding amount not to exceed the Committed
          Equipment Line. To evidence the Equipment Advance or
          Equipment Advances, Borrower shall deliver to Bank, at the
          time of each Equipment Advance request, an invoice for the
          equipment to be purchased or financed. The Equipment Advances
          shall be used only to purchase or finance Equipment
          purchased after June 30, 1997 and shall not exceed ONE
          HUNDRED Percent (100%) of the invoice amount of such
          equipment approved from time to time by Bank, excluding

                                       1
<PAGE>

          taxes, shipping, warranty charges, freight discounts and installation
          expense. Software may, however, constitute up to FIFTEEN percent (15%)
          of aggregate Equipment Advances. Tenant improvements may constitute no
          more than THIRTY FIVE percent (35%) of aggregate Equipment Advances.

          (b) Interest shall accrue from the date of each Equipment Advance at
          the rate specified in Section 2.2(a), and shall be payable monthly for
          each month through the month in which the Equipment Availability End
          Date falls. Any Equipment Advances that are outstanding on December
          31, 1997 will be payable in FORTY EIGHT (48) equal monthly
          installments of principal, plus all accrued interest, beginning on
          January 9, 1998 and ending on December 9, 2001. Any Equipment Advances
          made after December 31, 1997 that are outstanding on March 31, 1998
          will be payable in FORTY EIGHT (48) equal monthly installments of
          principal, plus all accrued interest, beginning on April 9,
          1998 and ending on March 9, 2002. Any Equipment Advances made after
          March 31, 1998 that are outstanding on June 30, 1998 will be payable
          in FORTY EIGHT (48) equal monthly installments of principal, plus all
          accrued interest, beginning on July 9, 1998 and ending on June 9,
          2002. Any Equipment Advances made after June 30, 1998 that are
          outstanding on October 9, 1998 will be payable in FORTY EIGHT (48)
          equal monthly installments of principal, plus all accrued interest,
          beginning on November 9, 1998 and ending on October 9, 2002. Any
          Equipment Advances made after October 9, 1998 that are outstanding on
          December 31, 1998 will be payable in FORTY EIGHT (48) equal monthly
          installments of principal, plus all accrued interest, beginning on
          January 9, 1999 and ending on the Maturity Date. Equipment Advances,
          once repaid, may not be reborrowed.

          (c) When Borrower desires to obtain an Equipment Advance, Borrower
          shall notify Bank (which notice shall be irrevocable) by facsimile
          transmission to be received no later than 3:00 p.m. Pacific time one
          (1) Business Day before the day on which the Equipment Advance is to
          be made. Such notice shall be substantially in the form of Exhibit B.
          The notice shall be signed by a Responsible Officer or its designee
          and include a copy of the invoice(s) for the Equipment to be financed.

     4.   WAIVER OF PRIOR DEFAULT. Bank hereby waives Borrower's delivery of its
          -----------------------
FYE 12/31/97 financial statements prior to December 31, 1998.

     5.   CONDITIONS PRECEDENT TO FURTHER ADVANCES. The obligation of Bank to
          ----------------------------------------
make further advances to Borrower under this line is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank the following:

          (a) this Loan Modification Agreement duly executed by Borrower,

          (b) such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.

     6.   CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
          ------------------
wherever necessary to reflect the changes described in this Loan Modification
Agreement.

                                       2

<PAGE>

     7.   NO DEFENSES OF BORROWER. Borrower agrees that as of this date, it has
          -----------------------
no defenses against any of the obligations to pay any amounts under the
Indebtedness.

     8.   CONTINUING VALIDITY. Borrower understands and agrees that (i) in
          -------------------
modifying the Existing Loan Documents, Bank is relying upon Borrower's
representations, warranties and agreements, as set forth in the Existing Loan
Documents, (ii) except as expressly modified pursuant to this Loan Modification
Agreement (including the effects of Section 6 hereof), the Existing Loan
Documents remain unchanged and in full force and effect, (iii) Bank's agreement
to modify the Existing Loan Documents pursuant to this Loan Modification
Agreement shall in no way obligate Bank to make any future modifications to the
Existing Loan Documents, (iv) it is the intention of Bank and Borrower to retain
as liable parties all makers and endorsers of the Existing Loan Documents,
unless a party is expressly released by Bank in writing, (v) no maker, endorser
or guarantor will be released by virtue of this Loan Modification Agreement, and
(vi) the terms of this Section 8 apply not only to this Loan Modification
Agreement but also to all subsequent loan modification agreements, if any.

     9.   CHOICE OF LAW AND VENUE; JURY TRAIL WAIVER.  The laws of the
          ------------------------------------------
Commonwealth of Massachusetts shall apply of this Agreement. BORROWER ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, UNCONDITIONALLY, THE NON-
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT, OR PROCEEDING OF ANY
KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS AGREEMENT; PROVIDED,
HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF OF THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS, BORROWER ACCEPTS JURISDICTION OF THE COURTS AND
VENUE IN SANTA CLARA COUNTY, CALIFORNIA. BORROWER AND BANK EACH HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND
AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO
ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRAIL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.

     10.  EFFECTIVENESS. This Agreement shall become effective only when it
          -------------
shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date first set forth above.

"Borrower"                                   "Bank"

ORAPHARMA, INC.                              SILICON VALLEY BANK, doing business
                                             as SILICON VALLEY EAST

By: /s/ Michael D. Kishbauch,                By: _______________________________
   ------------------------------------
   Michael D. Kishbauch, President, CEO          Philip S. Ernst, VP

                                             SILICON VALLEY BANK

By: /s/ James A. Ratigan                     By: _______________________________
   -----------------------------------
        James A. Ratigan, VP & CFO
                                             Title: ____________________________
                                             (Signed in Santa Clara County,
                                              California)

                                       3
<PAGE>

                   [LETTER HEAD OF WHITE & MCDERMOTT, P.C.]

                                 July 21, 1999

     James A. Ratigan, VP & CFO
     OraPharma, Inc.
     732 Louis Drive
     Warminister, PA 18974

     Dear Jim:

            Enclosed, please find for your files a fully-executed original of
the Loan Modification Agreement with Silicon Valley Bank.

                                 Yours sincerely,

                                 /s/ John L. Koenig
                                 ------------------

                                 John L. Koenig

Encl.

<PAGE>

                          LOAN MODIFICATION AGREEMENT

     This LOAN MODIFICATION AGREEMENT is entered into as of June 30, 1999, by
and between SILICON VALLEY BANK, a California-chartered bank with its principal
place of business at 3003 Tasman Drive, Santa Clara, CA 95054 and with a loan
production office located at Wellesley Office Park, 40 William Street, Suite
350, Wellesley, MA 02481, doing business under the name "Silicon Valley East
("Bank"), and ORAPHARMA, INC., a Delaware corporation with its principal place
of business at 732 Louis Drive, Warminster, PA 18974 ("Borrower").

                                   RECITALS

     Borrower has borrowed money from Bank pursuant to certain Existing Loan
Documents, as defined below. In consideration of certain financial
accommodations from Bank, and Borrower's continuing obligations under the
Existing Loan Documents, Borrower and Bank agree as follows:

                                   AGREEMENT

     1.   DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which
          ------------------------------------
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to among
other documents, a Loan and Security Agreement dated as of October 10, 1997
between Borrower and Bank providing for an extension of credit up to a maximum
of SEVEN HUNDRED FIFTY THOUSAND AND NO/100THS DOLLARS ($750,000)(the "Loan
Agreement") as amended by a Loan Modification Agreement dated as of December 8,
1998.

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

     2.   DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured
          -------------------------
pursuant to the Loan Agreement. Hereinafter, the Loan Agreement, together with
all other documents securing payment of the Indebtedness, shall be referred to
as the "Existing Loan Documents"

     3.   DESCRIPTION OF CHANGES IN TERMS.
          -------------------------------

     3.1  Modifications to Definitions. Section 1.1 of the Loan Agreement is
          ----------------------------
hereby amended by substituting the following definitions for those set forth
therein for the same terms:

          "Credit Extension" means each Equipment Advance, 1999
          Equipment Advance or any other extension of credit by
          Bank for the benefit of Borrower hereunder.

          "1999 Committed Equipment Line" means a credit extension
          of up to ONE MILLION AND NO/100THS Dollars ($1,000,000).

          "1999 Equipment Advance" has the meaning set forth in
          Section 2.1.2.

          "Maturity Date" means December 9, 2002.

     3.2  Addition of 1999 Committed Equipment Line. Section 2.1.2 is hereby
          -----------------------------------------
added to the Loan Agreement as follows:

          2.1.2 1999 Equipment Advances.
                -----------------------

          (a)   Subject to and upon the terms and conditions of
          this Agreement, at any time from the date hereof through
          June 30, 2000, Bank agrees to make advances (each a "1999
          Equipment Advance" and collectively, the "1999 Equipment
          Advances") to Borrower in an aggregate outstanding

                                       1
<PAGE>

          amount not to exceed the 1999 Committed Equipment Line. To evidence
          the 1999 Equipment Advance or 1999 Equipment Advances, Borrower shall
          deliver to Bank, at the time of each 1999 Equipment Advance request,
          an invoice for the equipment to be purchased or financed The 1999
          Equipment Advances shall be used only to purchase or finance Equipment
          purchased after March 31, 1999 and shall not exceed ONE HUNDRED
          Percent (100%) of the invoice amount of such equipment approved from
          time to time by Bank, excluding taxes, shipping, warranty charges,
          freight discounts and installation expenses. Software and taxes,
          shipping, warranty charges, freight discounts and installation
          expenses may, however, constitute up to TWENTY-FIVE percent (25%), but
          no more than TWO HUNDRED FIFTY THOUSAND AND NO/100THS DOLLARS
          ($250,000), of aggregate 1999 Equipment Advances.

          (b)  Interest shall accrue from the date of each 1999 Equipment
          Advance at the rate specified in Section 2.2(a), and shall be payable
          monthly for each month through JUNE 30, 2000. Any 1999 Equipment
          Advances that are outstanding on September 30, 1999 will be payable in
          FORTY EIGHT (48) equal monthly installments of principal, plus all
          accrued interest, beginning on October 9, 1999 and ending on September
          9, 2003. Any 1999 Equipment Advances made after September 30, 1999
          that are outstanding on December 31, 1999 will be payable in FORTY
          EIGHT (48) equal monthly installments of principal, plus all accrued
          interest, beginning on January 9, 2000 and ending on December 9, 2003.
          Any 1999 Equipment Advances made after December 31, 1999 that are
          outstanding on March 31, 2000 will be payable in FORTY EIGHT (48)
          equal monthly installments of principal, plus all accrued interest,
          beginning on April 9, 2000 and ending on March 9, 2004. Any 1999
          Equipment Advances made after March 31, 2000 that are outstanding on
          June 30, 2000 will be payable in FORTY EIGHT (48) equal monthly
          installments of principal, plus all accrued interest, beginning on
          July 9, 2000 and ending on June 9, 2004. 1999 Equipment Advances, once
          repaid, may be reborrowed.

          (c)  When Borrower desires to obtain a 1999 Equipment Advance,
          Borrower shall notify Bank (which notice shall be irrevocable) by
          facsimile transmission to be received no later than 3:00 p.m. Pacific
          time one (1) Business Day before the day on which the 1999 Equipment
          Advance is to be made. Such notice shall be substantially in the form
          of Exhibit B. The notice shall be signed by a Responsible Officer or
          its designee and include a copy of the invoice(s) for the Equipment to
          be financed.

     3.3  Modifications to Interest Rate Provisions.  Section 2.2(a) of the Loan
          -----------------------------------------
Agreement is hereby replaced in its entirety with the following:

          (a) Interest Rate. Except as set forth in Section 2.2(b), (i) any
              -------------
          Equipment Advances shall bear interest, on the average daily balance
          thereof, at a per annum rate equal to ONE (1.0) percentage point above
          the Prime Rate and (ii) any 1999 Equipment Advances shall bear
          interest, on the average daily balance thereof, at a per annum rate
          equal to THREE-QUARTERS (0.75) percentage point above the Prime Rate.

     3.4  Modifications to Financial Covenants. Sections 6.8 and 6.9 of the Loan
          ------------------------------------
Agreement are hereby replaced in their entirety with the following:

                                       2

<PAGE>

          6.8  Tangible Net Worth. Borrower shall maintain, as of the
               ------------------
          last day of each calendar month, a Tangible Net Worth Ratio
          of at least 2.0:1.0. Tangible Net Worth Ratio is defined as
          the ratio of Tangible New Worth over the total outstanding
          Equipment Advances and 1999 Equipment Advances pursuant to
          this Agreement.

          6.9  Liquidity. Borrower shall maintain, as of the last
               ---------
          calendar day of each month, a Liquidity Ratio of at least
          2.0:1.0. Liquidity Ratio is defined as the ratio of cash on
          hand (and cash equivalents) over the total outstanding
          Equipment Advances and 1999 Equipment Advances pursuant to
          this Agreement.

     4.   FACILITY FEE.  Borrower shall pay to Bank a facility fee of FIVE
          ------------
THOUSAND DOLLARS ($5,000) as well as any out-of-pocket expenses incurred by the
Bank through the date hereof, including reasonable attorneys' fees and expenses,
and after the date hereof, all Bank Expenses, including reasonable attorneys'
fees and expenses, as and when they become due.

     5.   CONDITIONS PRECEDENT TO FURTHER ADVANCES.  The obligation of Bank to
          ----------------------------------------
make further advances to Borrower under this line is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:

          (a)  this Loan Modification Agreement and the Invoice for Fees and
Expenses duly executed by Borrower;

          (b)  payment of the fees and Bank Expenses then due specified in
Section 4 hereof; and

          (c)  such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.

     6.   CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended
          ------------------
wherever necessary to reflect the changes described in this Loan Modification
Agreement.

     7.   NO DEFENSES OF BORROWER.  Borrower agrees that as of this date, it has
          -----------------------
no defenses against any of the obligations to pay any amounts under the
Indebtedness.

     8.   CONTINUING VALIDITY.  Borrower understands and agrees that (i) in
          -------------------
modifying the Existing Loan Documents, Bank is relying upon Borrower's
representations, warranties and agreements, as set forth in the Existing Loan
Documents, (ii) except as expressly modified pursuant to this Loan Modification
Agreement (including the effects of Section 6 hereof), the Existing Loan
Documents remain unchanged and in full force and effect, (iii) Bank's agreement
to modify the Existing Loan Documents pursuant to this Loan Modification
Agreement shall in no way obligate Bank to make any future modifications to the
Existing Loan Documents, (iv) it is the intention of Bank and Borrower to retain
as liable parties all makers and endorsers of the Existing Loan Documents,
unless a party is expressly released by Bank in writing, (v) no maker, endorser
or guarantor will be released by virtue of this Loan Modification Agreement, and
(vi) the terms of this Section 8 apply not only to this Loan Modification
Agreement but also to all subsequent loan modification agreements, if any.

     9.   CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.  The laws of the
          ------------------------------------------
Commonwealth of Massachusetts shall apply to this Agreement. BORROWER ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT, OR
PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF OF
THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, BORROWER ACCEPTS JURISDICTION
OF THE COURTS AND VENUE IN SANTA CLARA COUNTY, CALIFORNIA. BORROWER AND BANK
HEREBY WAIVE THEIR

                                       3
<PAGE>

RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

     10.  EFFECTIVENESS. This Agreement shall become effective only when it
          -------------
shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date first set forth above.

"Borrower"                                  "Bank"

ORAPHARMA, INC.                             SILICON VALLEY BANK, doing business
                                            as SILICON VALLEY EAST

By: /s/ Michael D. Kishbauch                By:
    ------------------------------------        --------------------------------
    Michael D. Kishbauch, President, CEO        Ash Lilani, SVP

By: /s/ James A. Ratigan                    SILICON VALLEY BANK
    ------------------------------------
    James A. Ratigan, VP & CFO

                                            By: ________________________________

                                            Title: _____________________________
                                            (Signed in Santa Clara County,
                                            California)

                                       4
<PAGE>

RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

     10.  EFFECTIVENESS. This Agreement shall become effective only when it
          -------------
shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date first set forth above.

"Borrower"                                  "Bank"

ORAPHARMA, INC.                             SILICON VALLEY BANK, doing business
                                            as SILICON VALLEY EAST

By: /s/ Michael D. Kishbauch                By: /s/ Ash Lilani
    ------------------------------------        --------------------------------
    Michael D. Kishbauch, President, CEO        Ash Lilani, SVP

By: /s/ James A. Ratigan                    SILICON VALLEY BANK
    ------------------------------------
    James A. Ratigan, VP & CFO

                                            By: ________________________________

                                            Title: _____________________________
                                            (Signed in Santa Clara County,
                                            California)

                                       4

<PAGE>

RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

     10.  EFFECTIVENESS. This Agreement shall become effective only when it
          -------------
shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date first set forth above.

"Borrower"                                  "Bank"

ORAPHARMA, INC.                             SILICON VALLEY BANK doing business
                                            as SILICON VALLEY EAST

By: /s/ Michael D. Kishbauch                By:
    ------------------------------------        --------------------------------
    Michael D. Kishbauch, President, CEO        Ash Lilani, SVP

By: /s/ James A. Ratigan                    SILICON VALLEY BANK
    ------------------------------------
    James A. Ratigan, VP & CFO

                                            By: /s/ [ILLEGIBLE]
                                                --------------------------------
                                            Title: [ILLEGIBLE]
                                                   -----------------------------
                                            (Signed in Santa Clara County,
                                              California)

                                       4

<PAGE>

                        EQUIPMENT LINE PROMISSORY NOTE

$750,000                                                 Bridgewater, New Jersey
                                                                October 10, 1997

     FOR VALUE RECEIVED, the undersigned, ORAPHARMA, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of Silicon Valley
Bank, a California-chartered bank ("Bank"), at such place as the holder hereof
may designate, in lawful money of the United States of America, the aggregate
unpaid principal amount of all advances ("Advances") made by Bank to Borrower in
accordance with the terms of the Loan and Security Agreement between Borrower
and Bank of even date herewith, as amended from time to time (the "Loan
Agreement"), up to a maximum principal amount of SEVEN HUNDRED FIFTY THOUSAND
AND NO/100THS Dollars ($750,000.00), until paid in full. Borrower shall also pay
interest on the aggregate unpaid principal amount of such Advances at the rates
and in accordance with the terms of the Loan Agreement. The entire principal
amount and all accrued interest shall be due and payable on OCTOBER 9, 2002.

     Borrower irrevocably waives the right to direct the application of any and
all payments at any time hereafter received by Bank from or on behalf of
Borrower, and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of a
specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses; (b)
then due and payable interest payments; and (c) then due and payable principal
payments and optional prepayments, for which there shall be no prepayment
penalty.

     Bank is hereby authorized by Borrower to endorse on Bank's books and
records each Advance made by Bank under this Note and the amount of each payment
or prepayment of principal of each such Advance received by Bank; it being
understood, however, that failure to make any such endorsement (or any error in
notation) shall not affect the obligations of Borrower with respect to Advances
made hereunder, and payments of principal by Borrower shall be credited to
Borrower notwithstanding the failure to make a notation (or any errors in
notation) thereof on such books and records.

     Borrower promises to pay Bank all costs and expenses of collection of this
Note in accordance with the terms of the Loan Agreement and to pay all
reasonable attorneys' fees incurred in such collection, whether or not there is
a suit or action, or in any suit or action to collect this Note or in any appeal
thereof. Borrower waives presentment, demand, protest, notice of protest, notice
of dishonor, notice of nonpayment, and any and all other notices and demands in
connection with the delivery, acceptance, performance, default or enforcement of
this Note, as well as any applicable statutes of limitations. No delay by Bank
in exercising any power or right hereunder shall operate as a waiver of any
power or right. Time is of the essence as to all obligations hereunder.

     This Note is issued pursuant to the Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.

     This Note shall be deemed to be made under, and shall be construed in
accordance with and governed by, the laws of the Commonwealth of Massachusetts,
excluding conflicts of laws principles.

     Executed as an instrument under seal.

                                        ORAPHARMA, INC.

                                        By: /s/ Michael D. Kishbauch
                                            ------------------------------------
                                            Michael D. Kishbauch, President, CEO

ATTEST  /s/ James A. Ratigan
        ---------------------------
        James A. Ratigan, VP & CFO
<PAGE>

                        AGREEMENT TO PROVIDE INSURANCE

Grantor:    OraPharma, Inc.                     Lender:    Silicon Valley Bank
            1200 Route 22 East, Suite 2000                 3003 Tasman Drive
            Bridgewater, New Jersey 08807                  Santa Clara, CA 95054

       INSURANCE REQUIREMENTS. ORAPHARMA, INC. ("Grantor") understands that
insurance coverage is required in connection with the extending of a loan or the
providing of other financial accommodation to Grantor by Bank. These
requirements are set forth in the Loan Documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):

           Collateral:   All Inventory, Equipment and Fixtures.
           Type:         All risks, including fire, theft and liability.
           Amount:       Full insurable value.
           Basis:        Replacement value.
           Endorsement:  Loss payable clause to Bank with stipulation that
                         coverage will not be canceled or diminished without
                         a minimum of twenty (20) days' prior written notice
                         to Bank.

        INSURANCE COMPANY. Grantor may obtain insurance from any insurance
company Grantor may choose that is reasonably acceptable to Bank. Grantor
understands that credit may not be denied solely because insurance was not
purchased through Bank.

        FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Bank on or
before closing, evidence of the required insurance as provided above, with an
effective date of October 10, 1997, or earlier. Grantor acknowledges and agrees
that if Grantor fails to provide any required insurance or fails to continue
such insurance in force, Bank may do so at Grantor's expense as provided in the
applicable security document. The cost of such insurance, at the option of Bank,
shall be payable on demand or shall be added to the indebtedness as provided in
the security document. GRANTOR ACKNOWLEDGES THAT IF BANK SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE
TO THE COLLATERAL, UP TO THE BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN
THE COLLATERAL MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE
ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.

        AUTHORIZATION. For purposes of insurance coverage on the Collateral,
Grantor authorizes Bank to provide to any person (including any insurance agent
or company) all information Bank deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

        GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT
TO PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED OCTOBER
10, 1997.

GRANTOR:

ORAPHARMA, INC.

By: /s/ [ILLEGIBLE]
   -------------------------
        10-17-97

================================================================================
                               FOR BANK USE ONLY
                            INSURANCE VERIFICATION
DATE:                                                       PHONE:
AGENT'S NAME:
INSURANCE COMPANY:
POLICY NUMBER:
EFFECTIVE DATES:
COMMENTS:

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

<PAGE>

          Uniform Commercial Code - FINANCING STATEMENT - Form UCC-1
                     Filed With: Secretary of State - N.Y.

<TABLE>
<CAPTION>
<S>                                          <C>                                        <C>
This FINANCING STATEMENT is presented to a   Filing              No. of Additional
Officer for filing pursuant to the Uniform   Commercial Code.    Sheets Presented:  1   3. [_] The Debtor is a transmitting utility.
------------------------------------------------------------------------------------------------------------------------------------
 1. Debtor(s) (Last Name First) and          2. Secured Party(ies) Name(s) and          4. For Filing Officer: Date, Time, No.
    Address(es):                                Address(es)                                Filing Office

    OraPharma, Inc.                             Silicon Valley Bank
    1200 Route 22 East,                         3003 Tasman Drive
    Suite 2000                                  Santa Clara, CA 95054
    Bridgewater, NJ 08807

------------------------------------------------------------------------------------------------------------------------------------
 5. This financing Statement covers the following types (or items) of property:   6: Assignee(s) of Secured Party and Address(es)

    See Exhibit A Attached.

                                                                                  --------------------------------------------------
                                                                                  7. [_] The described crops are growing or to be
                                                                                         grown on:*
                                                                                     [_] The described goods are or are to be
                                                                                         affixed to:*
                                                                                     [_] The lumber to be cut or minerals or the
                                                                                         like (including oil and gas) is on:*
 [X] Products of the Collateral are also covered.                                        *(Describe Real Estate Below)
----------------------------------------------------------------------------------
 8. Describe Real Estate Here:  [_] This statement is to be indexed   9. Name of
                                                                                  --------------------------------------------------
                                    in the Real Estate Records:          a Record
                                                                         Owner
                                                                      --------------------------------------------------------------
 No. & Street                 Town or City                 County                   Section                 Block           Lot
------------------------------------------------------------------------------------------------------------------------------------
 10. This statement is filed without the debtor's signature to perfect a security interest in collateral (check appropriate box)
     [_] under a security agreement signed by debtor authorizing secured party to file this statement, or
     [_] which is proceeds of the original collateral described above in which a security interest was perfected, or
     [_] acquired after a change of name, identity or corporate structure of the debtor, or [_] as to which the filing has
         lapsed, or already subject to a security interest in another jurisdiction:
         [_] when the collateral was brought into the state, or [_] when the debtor's location was changed to this state.

  OraPharma, Inc.                                                          Silicon Valley Bank

  By /s/ James A. Ratigan                                                  By____________________________________________________
     ---------------------------------------------------
                    Signature(s) of Debtor(s)                                            Signature(s) of Secured Party(ies)
     James A. Ratigan, VP & CFO                                            Phillip S. Ernst, VP
</TABLE>

(5/82)  STANDARD FORM - FORM UCC-1 - Approved by Secretary of State of New York

<PAGE>

Borrower: OraPharma, Inc.                  Lender: Silicon Valley Bank
          1200 Route 22 East, Suite 2000           3003 Tasman Drive
          Bridgewater, New Jersey 08807            Santa Clara, CA 95054

                                   EXHIBIT A

     The Collateral shall consist of all right, title and interest of Borrower
in and to the following:

     (a)  All goods and equipment now or hereafter financed by Bank, 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;

     (b)  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.

"Debtor"                                "Secured Party"

ORAPHARMA, INC.                         SILICON VALLEY BANK, doing business
                                        as SILICON VALLEY EAST

By: /s/ James A. Ratigan                By:
    -------------------------------         ------------------------------------
    James A. Ratigan, VP, CFO               Phillip S. Ernst, VP
<PAGE>

          Uniform Commercial Code - FINANCING STATEMENT - Form UCC-1
                         Filed With: Westchester - NY

<TABLE>
<S>                                       <C>                                           <C>
This FINANCING STATEMENT is presented to a Filing              No. of Additional
Officer for filing pursuant to the Uniform Commercial Code.    Sheets Presented:  2     3. [_] The Debtor is a transmitting utility.
------------------------------------------------------------------------------------------------------------------------------------
 1. Debtor(s) (Last Name First) and       2. Secured Party(ies) Name(s) and             4. For Filing Officer: Date, Time, No Filing
    Address(es):                             Address(es)                                   Office

    OraPharma, Inc.                          Silicon Valley Bank
    1200 Route 22 East,                      3003 Tasman Drive
    Suite 2000                               Santa Clara, CA 95054
    Bridgewater, NJ 08807

------------------------------------------------------------------------------------------------------------------------------------
 5. This financing Statement covers the following types (or items) of property:   6: Assignee(s), of Secured Party and Address(es)

    Collateral description on attachment

                                                                                  --------------------------------------------------
                                                                                  7. [_] The described crops are growing or to be
                                                                                         grown on:*
                                                                                     [X] The described goods are or are to be
                                                                                         affixed to:*
                                                                                     [_] The lumber to be cut or minerals or the
                                                                                         like (including oil or gas) is on:*
 [X] Products of the Collateral are also covered.                                        *(Describe Real Estate Below)
----------------------------------------------------------------------------------
 8. Describe Real Estate Here:  [X] This statement is to be indexed   9. Name of
    Cont'd                          in the Real Estate Records:          a Record --------------------------------------------------
                                                                         Owner
                                                                      --------------------------------------------------------------
 No. & Street  Cont'd         Town or City  Tarrytown      County  Westchester      Section                 Block           Lot
------------------------------------------------------------------------------------------------------------------------------------
 10. This statement is filed without the debtor's signature to perfect a security interest in collateral (check appropriate box)
     [_] under a security agreement signed by debtor authorizing secured party to file this statement, or
     [_] which is proceeds of the original collateral described above in which a security interest was perfected, or
     [_] acquired after a change of name, identity or corporate structure of the debtor, or [_] as to which the filing has
         lapsed or already subject to a security interest in another jurisdiction:
         [_] when the collateral was brought into the state, or [_] when the debtor's location was changed to this state.

  OraPharma, Inc.                                                          Silicon Valley Bank

  By /s/ James A. Ratigan                                                  By ____________________________________________________
     ---------------------------------------------------                                Signature(s) of Secured Party(ies)
                    Signature(s) of Debtor(s)                                 Phillip S. Ernst, VP
     James A. Ratigan, VP & CFO
</TABLE>

        STANDARD FORM - FORM UCC-1 - Approved by Secretary of State of New York

<PAGE>

                         ATTACHMENT TO NEW YORK UCC-1:
                           ORAPHARMA, INC. (DEBTOR)

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

ITEMS CONTINUED FROM FORM:

8.  Describe Real Estate Here:
      Property located at 777 Old Sawmill Rivier Road, Tarrytown, New York
      10591

8.  No. & Street:
      777 Old Sawmill River Road

                                    Page 1

<PAGE>

Borrower: OraPharma, Inc.                  Lender: Silicon Valley Bank
          1200 Route 22 East, Suite 2000           3003 Tasman Drive
          Bridgewater, New Jersey 08807            Santa Clara, CA 95054

                                   EXHIBIT A

     The Collateral shall consist of all right, title and interest of Borrower
in and to the following:

     (a)  All goods and equipment now or hereafter financed by Bank, 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;

     (b)  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.

"Debtor"                                "Secured Party"

ORAPHARMA, INC.                         SILICON VALLEY BANK, doing business
                                        as SILICON VALLEY EAST

By: /s/ James A. Ratigan                By:
    -------------------------------         ------------------------------------
    James A. Ratigan, VP, CFO               Phillip S. Ernst, VP

<PAGE>

UNIFORM COMMERCIAL CODE - FINANCING STATEMENT - FORM UCC-1 STATE OF NEW JERSEY

<TABLE>
<CAPTION>
This FINANCING STATEMENT is presented to a Filing Officer for filing pursuant to the Uniform Commercial Code
------------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                                                    <C>
      FOR OFFICIAL USE ONLY                       Debtor(s) Name (Last Name, First) Complete Address       Maturity date (if any).
                                                                                                           ----------------------
                                                  OraPharma, Inc.
                                                  1200 Route 22 East, Suite 2000                           None
                                                                                                       -----------------------------
                                                  Bridgewater, NJ 08807                                  FOR OFFICE USE ONLY

                                                ------------------------------------------------------
                                                  Secured Party(ies) and Complete Address

                                                  Silicon Valley Bank
                                                  3003 Tasman Drive
                                                  Santa Clara, CA 95054

                                                ------------------------------------------------------
                                                  Assignee(s) of Secured Party and Complete Address

------------------------------------------------------------------------------------------------------------------------------------
This financing statement covers the following types (or items) of property:

See Exhibit A Attached.

------------------------------------------------------------------------------------------------------------------------------------
     When collateral is crops or fixtures complete this portion of form.
     a.  Description of real estate (Sufficient to identify the property)

     b.  Name and complete address of record owner.

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

     a.  (X) Proceeds of Collateral are also covered.   b. (X) Products of Collateral are also covered.    No. of additional sheets
                                                                                                           presented. (1)
------------------------------------------------------------------------------------------------------------------------------------
     (   ) Filed with Register of Deeds and Mortgages of         County.                                   (X) Secretary of State
     (   ) Filed with the County Clerk of                                 County.
------------------------------------------------------------------------------------------------------------------------------------
                   Signature(s) of Debtor(s)                                       Signature(s) of Secured Party(ies) or Assignee(s)

OraPharma, Inc.                                                                  Silicon Valley Bank

/s/ James A. Ratigan
-----------------------------------------------------------                      ---------------------------------------------------
James A. Ratigan, VP & CFO                                                       Phillip S. Ernst, VP

FILING OFFICER COPY - This form of statement is approved by the Secretary of State of New Jersey.
</TABLE>
<PAGE>

Borrower: OraPharma, Inc.                  Lender: Silicon Valley Bank
          1200 Route 22 East, Suite 2000           3003 Tasman Drive
          Bridgewater, New Jersey 08807            Santa Clara, CA 95054

                                   EXHIBIT A

     The Collateral shall consist of all right, title and interest of Borrower
in and to the following:

     (a)  All goods and equipment now or hereafter financed by Bank, 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;

     (b)  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.

"Debtor"                                "Secured Party"

ORAPHARMA, INC.                         SILICON VALLEY BANK, doing business
                                        as SILICON VALLEY EAST

By: /s/ James A. Ratigan                By:
    -------------------------------         ------------------------------------
    James A. Ratigan, VP, CFO               Phillip S. Ernst, VP

<PAGE>

<TABLE>
<S>                                                                <C>
                                                                   -----------------------------------------------------------------
0092023003812000      PARTIES                                                              FINANCING STATEMENT
                                                                                  Uniform Commercial Code Form UCC-1
-----------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:                 IMPORTANT-Please read instructions on
  ORAPHARMA, INC.                                                               reverse side of page 4 before completing
                                                                   _________________________________________________________________
    732 LOUIS DRIVE                                                 Filing No. (stamped by      Date, Time, Filing Office (stamped
    WARMINSTER, PA 18974                                            filing officer):            by filing officer):

                                                              1
-----------------------------------------------------------------
Debtor Name (last name first if individual) and mailing address:

                                                                                                                                  5
                                                                   -----------------------------------------------------------------
                                                              1a    This Financing Statement is presented for filing pursuant to
-----------------------------------------------------------------   the Uniform Commercial Code, and is to be filed with the (check
Debtor name (last name first if individual) and mailing address:    appropriate box):
                                                                    [X] Secretary of the Commonwealth.
                                                                    [_] Prothonotary of _____________________________________ County
                                                                    [_] real estate records of ______________________________ County
                                                                                                                                  6
                                                                   -----------------------------------------------------------------
                                                              1b    Number of Additional Sheets (if any):                         7
-----------------------------------------------------------------  -----------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and      Optional Special Identification
for security interest information:                                  (Max. 10 Characters):                                         8
                                                                   -----------------------------------------------------------------
SILICON VALLEY BANK                                                                             COLLATERAL
                                                                   -----------------------------------------------------------------
                                                                    Identify collateral by Item and/or type:
3003 Tasman Drive                                                   SEE ATTACHED EXHIBIT "A" HERETO.
Santa Clara, CA 95054                                         2
-----------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if
individual) and address for security interest information:

                                                               2a
-----------------------------------------------------------------
Special Types of Parties (check if applicable):
[_] The terms "Debtor" and "Secured Party" mean "Lessee" and
"Lessor," respectively.                                                [X] (Check only if desired) Products of the collateral
                                                                       are also covered.
[_] The terms "Debtor" and "Secured Party" mean "Consignee" and                                                                   9.
                                                                   -----------------------------------------------------------------
"Consignor," respectively.                                                 Identify restated real estate, if applicable. The
                                                                           collateral is, or includes (check appropriate box(es)).
[_] Debtor is a Transmitting Utility.                               a. [_] crops growing or to be grown on -
                                                                    b. [_] goods which are or are to become fixtures on -
                                                                    c. [_] minerals or the like (including oil and gas) as
                                                                           extracted on -
                                               TRAN #3812           d. [_] accounts resulting from the sale of minerals or the
                                                                           like (including oil and gas) at the wellhead or
                                                               3       minehead on -
-----------------------------------------------------------------
                  SECURED PARTY SIGNATURE(S)
-----------------------------------------------------------------
                                                                    the following real estate:
This statement is filed with only the Secured Party's signature
to perfect a security interest in collateral (check applicable      Street Address:
box(es)).
                                                                    Described at: Book _______ of (check one) [_] Deeds
a. [_]  acquired after a change of name, identity or corporate      [_] Mortgages, at Page(s) __________________________________
        structure of the Debtor.                                    for _______________ County. Uniform Parcel Identifier ______
                                                                    ____________________
b. [_]  as to which the filing has lasped.                          [_] Described on Additional Sheet.
                                                                    Name of record owner (required only if no debtor has an
c. already subject to a security interest in another county in      Interest of record):
   Pennsylvania.

       [_]  when the collateral was moved to this county.

       [_]  when the Debtor's residence or place of business was
            moved to this county.                                                                                                 10
                                                                   -----------------------------------------------------------------
                                                                                               DEBTOR SIGNATURE(S)
                                                                   -----------------------------------------------------------------
d. already subject to a security interest in another                Debtor Signature(s):
   jurisdiction -                                                      ORAPHARMA, INC.

       [_]  when the collateral was moved to Pennsylvania.          1   By: /s/ James A. Ratigan              11-3-98
                                                                   -----------------------------------------------------------------
       [_]  when the Debtor's location was moved to                 1a          JAMES A. Ratigan, Vice President & CFO
            Pennsylvania.                                          -----------------------------------------------------------------

e. [_]  which is proceeds of the collateral described in block
        9, in which a security interest was previously perfected
        (also describe proceeds in block 9, if purchased with
        cash proceeds and not adequately described on the
        original financing statement).                              1b                                                            11
                                                                   -----------------------------------------------------------------
   161/PSE                                                          RETURN RECEIPT TO:

                        Secured Party Signature(s)
                (required only if box(es) is checked above):            Data File Services, Inc.
                                                                        P.O. Box 275
SILICON VALLEY BANK                                                     Van Nuys
-----------------------------------------------------------------
                                                                        CA                  Phone  800-331-3282
_________________________________________________________________
                                                                        91408-2750          Fax    818-909-4717
_________________________________________________________________
                                                               4                                                                  12
------------------------------------------------------------------------------------------------------------------------------------
FILING OFFICE ORIGINAL
</TABLE>
<PAGE>

Borrower: Orapharma, Inc.                  Lender: Silicon Valley Bank
          732 Louis Drive                          3003 Tasman Drive
          Warminster, PA 18974                     Santa Clara, CA 95054

                                   EXHIBIT A
                                   ---------

     The Collateral shall consist of all right, title and interest of Borrower
in and to the following:

     (a)  All goods and equipment now or hereafter financed by Bank, 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 for the foregoing, wherever
          located;

     (b)  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.

"Debtor"                                "Secured Party"

ORAPHARMA, INC.                         SILICON VALLEY BANK, doing business as
                                        SILICON VALLEY EAST

By: /s/ James A. Ratigan                By:_____________________________________
    -------------------------------
Name: James A. Ratigan                  Name:___________________________________
      -----------------------------
Title: Vice President & CFO             Title:__________________________________
      -----------------------------
<PAGE>

[Letterhead of Silicon Valley East]

November 2, 1998

James Ratigan
Orapharma, Inc.
732 Louis Drive
Warminister, PA 18974

Re: UCC 3- Change of address

Dear James:

Enclosed please find two UCC filings which reflect your new address. Please
execute each filing and return them to my attention.

Should you have any questions please feel free to contact me at 781-431-9320.

Thank you.

Sincerely,

/s/ Brandi Harry

Brandi Harry
Loan Service Officer

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