Document:

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                                                                    EXHIBIT 10.2

                          LOAN AND SECURITY AGREEMENT

        This LOAN AND SECURITY AGREEMENT, is entered into as of April 30, 2002
by and between Nutraceutix, Inc., a Delaware Corporation ("Borrower"), with its
principal place of business at 8340 154th Avenue N. E. Redmond, WA 98052-3864
and ACCESS BUSINESS FINANCE L.L.C ("Lender"), with its principal place of
business at 14205 S.E. 36th Street, Suite 350, Bellevue, Washington 98006.

                                    RECITALS

        A. Borrower has requested that Lender provide financial accommodations
to Borrower as more fully set forth herein and in the Loan Documents.

        B. Borrower has requested that Guarantor(s) guaranty the Obligations.

        C. This Agreement is entered into and will be performed in the State of
Washington.

        NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound hereby, the Parties hereby agree as follows:

                                    AGREEMENT

1. CERTAIN DEFINITIONS AND INDEX TO DEFINITIONS.

               1.1 ACCOUNTING TERMS. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with GAAP consistently applied.

               1.2 DEFINITIONS. All other terms contained in this Agreement
which are not specifically defined herein shall have the meanings provided in
the UCC to the extent the same are used herein. All references herein to the
singular or plural shall also mean the plural or the singular, respectively. As
used herein, the following terms shall have the following meanings:

                      "ACCOUNT DEBTOR" - the obligor on an Account.

                      "ACCOUNTING PERIOD" - see Section 7.1.2 hereof.

                      "ACCOUNTS" - all currently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods or the rendition of services by
Borrower, irrespective of whether earned by performance, and any and all credit
insurance, guaranties, or security therefor.

                      "ADVANCES" - see Section 2.1.1 hereof.

                      "AGREEMENT" - this Loan and Security Agreement, together
with all exhibits and schedules hereto, as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced.

                      "ALLOWABLE AMOUNT" - the lesser of the Borrowing Base and
the Maximum Amount.

                      "ANNIVERSARY DATE" - the date which is one (1) year from
the date of the first Credit Accommodation hereunder.

                      "AUDIT FEE" -- The current hourly rate per examiner, plus
travel expenses.

                      "AVAILABILITY RESERVES" - as of any date of determination,
such amounts as Lender may from time to time establish and revise in good faith
reducing the amount of Advances which would otherwise be available to Borrower
hereunder:

                             (a) to reflect events, conditions, contingencies or
risks which, as determined by Lender in good faith, do or may affect either (i)
the Collateral or any other property which is security for the Obligations or
its value, (ii) the assets, business or prospects of Borrower or any Obligor, or
(iii) the security interest and other rights of Lender in the Collateral
(including the enforceability, perfection and priority thereof);

                             (b) to reflect Lender's good faith belief that any
collateral report or financial information furnished by or on behalf of Borrower
or any Obligor to Lender is or may have been incomplete, inaccurate or
misleading in any material respect; or

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                             (c) in respect of any state of facts which Lender
determined in good faith constitutes an Event of Default or may, with notice or
passage of time or both, constitute an Event of Default.

                      "AVERAGE UNUSED PORTION OF MAXIMUM AMOUNT" - the Maximum
Amount less the average Obligations that were outstanding during the immediately
preceding month.

                      "BALANCE SUBJECT TO INTEREST" - the unpaid balance of (a)
Advances, (b) payments by Lender on account of Letters of Credit, and (c) other
payments made by Lender arising hereunder for which Borrower is liable to
Lender.

                      "BORROWER" - see Preamble hereof.

                      "BORROWER'S ACCOUNT" - any demand deposit account
maintained by Borrower, or represented by an employee of Borrower to be
maintained by Borrower, wherever located.

                      "BORROWER'S BOOKS" - all of Borrower's books and records
including ledgers, records indicating, summarizing, or evidencing Borrower's
properties or assets or liabilities, all information relating to Borrower's
business operations or financial condition, and all computer programs, disc or
tape files, printouts, runs, or other computer prepared information, and the
equipment containing such information.

                      "BORROWER'S FEDERAL EMPLOYER IDENTIFICATION NUMBER -
91-1689591.

                      "BORROWING BASE" - the sum of:

                             (a) Ninety (90%) percent of the Net Face Amount of
Borrower's Eligible Accounts; plus

                             (b) the lesser of (1) N/A percent of the Value of
Eligible Inventory,(2) $N/A or N/A percent of Eligible Accounts.

                      "BORROWING BASE CERTIFICATE" - a request for an Advance,
in the form annexed hereto as Exhibit A.

                      "BUSINESS DAY" - any day which is not a Saturday, Sunday,
or other day on which national banks are authorized or required to be closed.

                      "CLEARANCE DAYS" - Three (3) Business Days.

                      "CLEARANCE DAY PAYMENTS" - payments received by Lender, in
whatever form and from whatever source, except wire transfers, in reduction of
the Obligations.

                      "CLOSING DATE" - the date on which this Agreement is
accepted by Lender.

                      "COLLATERAL" - all of the following present and future
assets of Borrower, together with all collateral now or hereafter described in
any form UCC-1 filed against Borrower naming Lender as the secured party:

                             (a) All Accounts, interests in goods represented by
accounts, returned, reclaimed or repossessed goods with respect thereto and
rights as an unpaid vendor; contract rights; chattel paper; general intangibles
(including, but not limited to, tax and duty refunds, registered and
unregistered patents, trademarks, service marks, copyrights, trade names and
applications for the foregoing, trade secrets, goodwill, processes, drawings,
blueprints, customer lists, licenses, whether as licensor or licensee, chooses
in action and other claims, and existing and future leasehold interests in
equipment, and fixtures); documents; instruments; letters of credit; deposit
accounts;

                             (b) All goods, including, but not limited to:

                                    i) All Inventory;

                                    ii) All Equipment;

                                    iii) All consumer goods, farm products,
crops growing or to be grown, timber to be cut,, minerals or the like
(including, but not limited to, oil and gas), wherever located and of whatever
kind, nature or description;

                             (c) All real or other personal property in or upon
which Lender has or may hereafter have a security interest, lien or right of
setoff;

                             (d) All Borrower's Books;

                             (e) Any claim of Borrower on any policy of
insurance, including claims for premium refund under any workmen's compensation
policy, or claims under any business interruption or similar coverage;

                             (f) All investment property; and

                             (g) All products and proceeds of the foregoing, in
whatever form and wherever located, including, but not limited to, all insurance
proceeds, all claims against third parties for loss or destruction of or damage
to any of the foregoing, and all income from the lease or rental of any of the
foregoing.

                      "COLLATERAL MANAGEMENT FEE" - waived.

                      "CREDIT ACCOMMODATION" - any Advance or other extension of
credit by Lender to or on behalf of Borrower hereunder or under any Evidence of
Special Credit Accommodation.

                      "DEFAULT RATE" - Fifteen (15%) percent per annum in excess
of the Interest Rate. To the extent the Default Rate is calculated with
reference to the Prime Rate, any change in the Default Rate shall be effective
as of the date of any change in the Prime Rate.

                      "DELINQUENT ACCOUNTS" - Accounts which remain uncollected
for more than Ninety (90) days from invoice date.

                      "EARLY TERMINATION PREMIUM" - the greater of:

                             (a) the total interest for the immediately
preceding three (3) months; or

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                             (b) $12,000.00.

                      "ELIGIBLE ACCOUNT" - an Account, excluding the following:

                             (a) Delinquent Accounts;

                             (b) Finance charges assessed by Borrower against
past due Account Debtors.

                             (c) Accounts due from an Account Debtor that has
suffered a business failure or the termination of its existence, or as to which
a dissolution, insolvency or bankruptcy proceeding has been commenced, any
assignment for the benefit of creditors has been made, or a trustee, receiver or
conservator has been appointed for all or any part of the assets of such Account
Debtor;

                             (d) Accounts due from an Account Debtor affiliated
with Borrower in any manner, including, without limitation, as stockholder,
owner, officer, director, agent or employee;

                             (e) Accounts with respect to which payment is or
may be conditional;

                             (f) Accounts with respect to which the Account
Debtor is not a resident or citizen of, located in, or subject to service of
process in, the United States, and which are not either (i) covered by credit
insurance in form and amount, and by an insurer, satisfactory to Lender, or (ii)
supported by one or more letters of credit that are assignable by their terms
and have been delivered to Lender in an amount, of a tenor, and issued by a
financial institution, acceptable to Lender;

                             (g) Accounts due from an Account Debtor who is any
national, federal or state government, including, without limitation, any
instrumentality, division, agency, body or department thereof, except where such
account debtor has agreed to make payment directly to Lender;

                             (h) Accounts commonly known as "bill and hold" or a
similar arrangement;

                             (i) Accounts due from an Account Debtor as to which
Ten (10%) percent or more of the aggregate dollar amount of all outstanding
Accounts owing from such Account Debtor are Delinquent Accounts;

                             (j) That portion of Accounts due from an Account
Debtor which is in excess of Ten (10%) percent of Borrower's aggregate dollar
amount of all outstanding Accounts;

                             (k) Accounts as to which Borrower is or may become
liable to the Account Debtor for any reason (including contras and advance
deposits from customers);

                             (l) Accounts which are not free of all liens,
encumbrances, charges, rights and interest of any kind, except in favor of
Lender;

                             (m) Accounts which are supported or represented by
a promissory note, post-dated check or letter of credit unless such instrument
is actually delivered to Lender;

                             (n) Accounts with respect to which the Account
Debtor is located in New Jersey, Minnesota, or any other state denying creditors
access to its courts in the absence of a Notice of Business Activities Report or
other similar filing, unless Borrower has either qualified as a foreign
corporation authorized to transact business in such state or has filed a Notice
of Business Activities Report or similar filing with the applicable state agency
for the then current year;

                             (o) Accounts that are payable in other than United
States Dollars;

                             (p) Accounts that represent progress payments or
other advance billings that are due prior to the completion of performance by
Borrower of the subject contract for goods or services.

                             (q) Accounts which are unsuitable as collateral, as
determined by Lender in the exercise of its reasonable sole discretion.

                      "ELIGIBLE INVENTORY" - Inventory of Borrower which is held
for sale or lease in the ordinary course of Borrower's business which is:

                             (a) ______________________________ (describe
specific type of eligible inventory);

                             (b) Inventory in which Lender has a first priority
perfected security interest;

                             (c) not subject to a security interest, lien or
other encumbrance in favor of any other Person;

                             (d) of good and merchantable quality free from
defects;

                             (e) owned and in the lawful possession of Borrower;

                             (f) not owned by Borrower for more than N/A days;
and

                             (g) otherwise acceptable to Lender in its
reasonable sole discretion.

                      "EQUIPMENT" - all of Borrower's present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), tools, parts, dies,
jigs, goods (other than consumer goods, farm products, or Inventory), wherever
located, and any interest of Borrower in any of the foregoing, and all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing, wherever located.

                      "EVENTS OF DEFAULT" - see Section 9 hereof.

                      "EVIDENCE OF SPECIAL CREDIT ACCOMMODATION" - see Section
2.2 hereof.

                      "GAAP" - means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and pronouncements of
the Financial Accounting Standards Board (or any successor authority) that are
applicable as of the date of determination.

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                      "GUARANTOR(s)" - all entities now or hereafter
guaranteeing the Obligations.

                      "GUARANTY" - a continuing guaranty in form and substance
acceptable to Lender by which a Guarantor guarantees the Obligations.

                      "INTEREST RATE" - 8 percent per annum in excess of the
Prime Rate; To the extent the Interest Rate is calculated with reference to the
Prime Rate, any change in the Interest Rate shall be effective as of the date of
any change in the Prime Rate.

                      "INVENTORY" - all present and future inventory in which
Borrower has any interest, including goods held for sale or lease or to be
furnished under a contract of service and all of Borrower's present and future
raw materials, work in process, finished goods, packing and shipping materials,
wherever located, and any documents of title representing any of the above.

                      "KEY EMPLOYEES" - David T. Howard and Steven H. Moger.

                      "LENDING OFFICE" - Lender's office described in the
Section below entitled "Notices".

                      "LOAN DOCUMENTS" - this Agreement, together with any
documents, instruments and agreements, executed or delivered in connection
herewith, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

                      "LOAN FEE" - $11,000.00.

                      "MAXIMUM AMOUNT" - $1,100,000.00.

                      "MINIMUM MONTHLY CHARGE" - $4,000.00.

                      "MISDIRECTED PAYMENT FEE" - 15% of the amount of any
payment on an Account where said payment has been received by Borrower and not
delivered in kind by Borrower to Lender within three (3) Business Days of
receipt thereof.

                      "MONETARY COLLATERAL" - cash, checks or other proceeds of
Collateral in tangible form.

                      "NEGOTIABLE COLLATERAL" - all of Borrower's present and
future letters of credit, notes, drafts, instruments, certificated and
uncertificated securities (including the shares of stock of subsidiaries of
Borrower), documents, personal property leases (wherein Borrower is the lessor),
chattel paper, and Borrower's Books relating to any of the foregoing.

                      "NET FACE AMOUNT" - with respect to an Account, the gross
face amount of such Account less all trade discounts or other deductions to
which the Account Debtor is entitled.

                      "OBLIGATED PARTY" - see Section 5.3.1 hereof.

                      "OBLIGATIONS" - all present and future obligations owing
by Borrower to Lender whether or not for the payment of money, whether or not
evidenced by any note or other instrument, whether direct or indirect, absolute
or contingent, due or to become due, joint or several, primary or secondary,
liquidated or unliquidated, secured or unsecured, original or renewed or
extended, whether arising before, during or after the commencement of any case
with respect to Borrower under the United States Bankruptcy Code or any similar
statute, including, but not limited to any obligations arising pursuant to
letters of credit or acceptance transactions or any other financial
accommodations; and all principal, interest, fees, charges, expenses, attorneys'
fees and accountants' fees chargeable to Borrower or incurred by Lender in
connection with this Agreement and/or the transaction(s) related thereto.

                      "OBLIGORS" - Borrower and all Guarantors.

                      "PERMITTED LIENS" -

                             (a) liens and security interests held by Lender;

                             (b) liens and security interests set forth on
Exhibit B hereto;

                             (c) mechanics', materialmen's, warehousemen's, or
similar liens.

                      "PRIME RATE" - the Prime Rate as reflected in The Wall
Street Journal (Western Edition). If such rate is shown as a range, then the
Prime Rate shall be the highest value in such range.

                      "REQUIRED MINIMUM PERIOD" --one year from the date of this
Agreement.

                      "SPECIAL CREDIT ACCOMMODATION" - see Section 2.2 hereof.

                      "SPECIAL CREDIT ACCOMMODATION FEE" - Two (2%) percent of
the original amount of any Special Credit Accommodation.

                      "STANDARD FEE SCHEDULE" - the schedule of Lender's
standard fees for services.

                      "SUBORDINATING CREDITOR" - N/A

                      "SUBORDINATION AGREEMENT" - a subordination agreement in
form and substance acceptable to Lender whereby a subordinating creditor
subordinates in favor of Lender obligations owed to it by Borrower.

                      "UNUSED LINE FEE" - waived.

                      "UCC" - means the Uniform Commercial Code as in effect on
the date hereof in the State of Washington as amended from time to time, and any
successor statute.

                      "VALUE OF ELIGIBLE INVENTORY" - shall mean, as determined
by Lender in good faith, the lower of (a) cost, computed on a first-in-first-out
basis in accordance with GAAP, or (b) market value.

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2. CREDIT FACILITIES.

        2.1 ADVANCES Subject to the terms and conditions of this Agreement, from
the date on which this Agreement becomes effective:

               2.1.1 Lender, shall, from time to time, at the request of
Borrower, make advances ("Advances") to Borrower, less any Availability
Reserves, so long as, before and after such Advance, the Obligations do not
exceed the Allowable Amount.

               2.1.2 Lender may, in its discretion, from time to time, upon not
less than five (5) days prior notice to Borrower, reduce the Borrowing Base to
the extent that Lender determines in good faith that:

                      2.1.2.1 the dilution with respect to the Accounts for any
period (based on the ratio of (a) the aggregate amount of reductions in Accounts
other than as a result of payments in cash to (b) the aggregate amount of total
sales) has increased in any material respect or may be reasonably anticipated to
increase in any material respect above historical levels;

                      2.1.2.2 the general creditworthiness of Account Debtors
has declined; or

                      2.1.2.3 the number of days of the turnover of the
Inventory for any period has changed in any material respect, or (a) the
liquidation value of the Eligible Inventory, or any category thereof, has
decreased, or (b) the nature and quality of the Inventory has deteriorated.

                      2.1.2.4 In determining whether to reduce the Borrowing
Base, Lender may consider events, conditions, contingencies or risks which are
also considered in determining Eligible Accounts, Eligible Inventory or in
establishing Availability Reserves.

        2.2 SPECIAL CREDIT ACCOMMODATIONS. Lender may, in its sole and absolute
discretion, from time to time, extend Credit Accommodations to Borrower in
excess of the Allowable Amount (any Credit Accommodation extended to Borrower
pursuant to this Section being a "Special Credit Accommodation"). Each Special
Credit Accommodation shall be evidenced by a writing in form and substance
satisfactory to Lender in its sole discretion (any such writing, an "Evidence of
Special Credit Accommodation"). Notwithstanding the terms and provisions of any
Evidence of Special Credit Accommodation, each Special Credit Accommodation
shall be payable on demand.

        2.3 GENERAL PROVISIONS.

               2.3.1 BORROWING BASE CERTIFICATE. Each request from Borrower for
a Credit Accommodation shall be accompanied by a Borrowing Base Certificate,
completed and signed by Borrower.

               2.3.2 CREDITING BORROWER'S ACCOUNT. All Credit Accommodations by
Lender may be made by deposits or transfers to any demand deposit account of
Borrower.

               2.3.3 AUTHORIZATION FOR CREDIT ACCOMMODATIONS. Subject to the
terms and conditions of this Agreement, Lender is authorized to make Credit
Accommodations:

                      2.3.3.1 upon telephonic, facsimile or other instructions
received from anyone purporting to be an officer, employee or representative of
Borrower; or

                      2.3.3.2 at the sole discretion of Lender, and
notwithstanding any other provision in this Agreement, if necessary to meet any
Obligations, including but not limited to any interest not paid when due.

        2.4 CONDITIONS OF LENDER'S OBLIGATIONS. All conditions of Lender's
obligation to make Advances are imposed solely and exclusively for the benefit
of Lender and may be freely waived or modified in whole or in part by Lender at
any time.

        2.5 LIMITATIONS ON CREDIT ACCOMMODATIONS. Notwithstanding anything to
the contrary contained herein, Lender shall not be obligated to make a Credit
Accommodation if, before or as a result thereof, the Obligations shall exceed
either the Borrowing Base or the Maximum Amount.

3. PAYMENTS BY BORROWER.

        3.1 IN GENERAL.

               3.1.1 PLACE OF PAYMENTS. All payments hereunder shall be made by
Borrower to Lender at the Lending Office, or at such other place as Lender may
designate in writing.

               3.1.2 CREDITING OF PAYMENTS.

                      3.1.2.1 GENERALLY. No payments received by Lender
purportedly in satisfaction of any of the Obligations shall constitute payment
thereof unless and until final payment thereof.

                      3.1.2.2 PREPAYMENTS; APPLICATION OF PAYMENTS. Borrower
shall have the right to make payments at any time in reduction of the
Obligations, in whole or in part, provided, however, that Lender may apply any
payments received to the Obligations, or portion thereof, in any manner and in
any order as Lender may determine in its sole discretion, notwithstanding
contrary instructions received.

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                      3.1.2.3 ACH DEBITS. In order to satisfy any of the
Obligations, Lender is hereby authorized by Borrower to initiate electronic
debit or credit entries through the ACH system to Borrower's Account or any
other deposit account maintained by Borrower wherever located. Borrower may only
terminate this authorization by giving Lender thirty (30) days prior written
notice of termination.

        3.2 INTEREST AND FEES.

               3.2.1 INTEREST.

                      3.2.1.1 BASIC INTEREST. Subject to Section 3.2.1.2 hereof,
interest on the Balance Subject to Interest shall be payable monthly, in
arrears, shall be computed at the Interest Rate, and shall be due on the first
(1st) day of each month following the accrual thereof. Lender is authorized to
debit Borrower's loan account on the first business day of each month for
interest accrued hereunder on the Balance Subject to Interest during the
preceding month at the Interest Rate.

                      3.2.1.2 DEFAULT INTEREST. Immediately upon the occurrence
of an Event of Default, unless waived by Lender, Borrower shall pay to Lender,
monthly until the first (1st) Anniversary Date on which all Obligations have
been fully paid, the greater of:

                             3.2.1.2.1 interest, before, as well as after
judgment, at the Default Rate; or

                             3.2.1.2.2 the greater of:

                                    3.2.1.2.2.1 the monthly average of all
interest and fees paid by Borrower to Lender hereunder for the preceding
one-hundred eighty (180) days (or portion thereof if Obligations have not been
outstanding for at least one-hundred eighty (180) days); or

                                    3.2.1.2.2.2 the Minimum Monthly Charge.

               3.2.1.3 Lender's failure to assess interest at the Default Rate
as provided hereunder shall not be deemed a waiver by Lender to charge such
Default Rate. Lender reserves the right, and Borrower hereby acknowledges that
Lender may, recalculate interest at the Default Rate.

               3.2.1.4 CALCULATION OF INTEREST. All interest charged hereunder
shall be computed on the basis of a three-hundred sixty (360) day year for the
actual number of days elapsed. Notwithstanding anything to the contrary
contained herein, any interest rate calculated hereunder shall be rounded up to
the closest one-quarter of one (1/4 of 1%) percent, with no adjustments made for
rate changes of less than one-quarter of one (1/4 of 1%) percent.

               3.2.1.5 APPLICATION OF COLLECTIONS. Lender shall, for the purpose
of the computation of interest due hereunder, add the Clearance Days to any
Clearance Day Payments, which is acknowledged by the parties to constitute an
integral aspect of the pricing of Lender's facility to Borrower, and shall apply
irrespective of the characterization of whether receipts are owned by Borrower
or Lender. Should any check or item of payment not be honored when presented for
payment, then Borrower shall be deemed not to have made such payment, and
interest shall be recalculated accordingly.

        3.2.2 FEES.

                      3.2.2.1 LOAN FEE. Borrower shall pay the Loan Fee to
Lender immediately upon the execution of this Agreement, and upon each renewal
or extension of this Agreement by Lender whether such renewal or extension is
for one (1) year or for less than one year. Any portion not paid when due shall
accrue interest at the applicable interest rate set forth herein.

                      3.2.2.2 COLLATERAL MANAGEMENT FEE. Borrower shall pay the
Collateral Management Fee to Lender monthly, in arrears, on the first (1st) day
of each month following the accrual thereof.

                      3.2.2.3 UNUSED LINE FEE. Borrower shall pay the Unused
Line Fee to Lender on the first (1st) day of each month during the term of this
Agreement.

                      3.2.2.4 SPECIAL CREDIT ACCOMMODATION FEE. Borrower shall
pay a Special Credit Accommodation Fee to Lender simultaneously with the making
by Lender of a Special Credit Accommodation.

                      3.2.2.5 MINIMUM MONTHLY CHARGE. For any full month in
which the sum of interest and the Collateral Management Fee earned by Lender is
less than the Minimum Monthly Charge, Lender shall debit the difference to the
Obligations as of the first day of the following month, until the date on which
all Obligations have been fully repaid (whether or not this Agreement has
heretofore been terminated).

                      3.2.2.6 MISDIRECTED PAYMENT FEE. Borrower shall pay the
Misdirected Payment Fee to Lender immediately upon its accrual.

                      3.2.2.7 EARLY TERMINATION PREMIUM. If Borrower terminates
this Agreement prior to the end of the Required Minimum Period, Borrower shall
pay the Early Termination Premium to Lender on the effective date of such
termination. The Early Termination Premium shall be presumed to be the amount of
damages sustained by Lender as a result of the early termination and Borrower
agrees that it is reasonable under the circumstances currently existing. This
premium will be waived if Borrower obtains financing from a commercial bank.

                      3.2.2.8 AUDIT FEE. Borrower shall pay an Audit Fee to
Lender in connection with each audit Lender performs or causes to be performed
pursuant to Section 7.2.1.2 hereof.

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                      3.2.2.9 ADDITIONAL FEES. Borrower shall pay to Lender fees
for such services as Lender customarily charges, as set forth in Lender's
Standard Fee Schedule, a copy of which will be provided to Borrower on demand.
Lender shall have the right to change all or any of such fees upon ten (10) days
notice to Borrower.

4. GRANT OF SECURITY INTEREST. To secure the payment and performance in full of
all of the Obligations, Borrower hereby grants to Lender a continuing security
interest in the Collateral.

5. COLLECTION AND ADMINISTRATION OF ACCOUNTS.

        5.1 COLLECTION.

               5.1.1 MONETARY COLLATERAL. Unless Lender specifically consents in
writing that Borrower may collect Monetary Collateral on behalf of and in trust
for Lender, Borrower shall, at Borrower's expense and in the manner requested by
Lender from time to time, direct that Monetary Collateral be (or, if received by
Borrower, shall cause same to be):

                      5.1.1.1 sent to Lender or a post office box designated by
or in the name of Lender, or in the name of Borrower, but as to which access is
limited solely to Lender. or

                      5.1.1.2 deposited into a bank account maintained in the
name of Lender, or a blocked bank account under arrangements with the depository
bank under which all funds deposited to such blocked bank account are required
to be transferred to Lender. In connection therewith, Borrower shall execute
such post office box or blocked bank account agreements as Lender shall specify.

        5.2 ELECTRONIC PROCEEDS OF COLLATERAL. In the event Borrower receives
proceeds of Collateral in the form of a wire transfer or other intangible funds
transfer mechanism, Borrower shall immediately pay such proceeds to Lender.

        5.3 NOTIFICATIONS, ETC. Lender may, at any time, irrespective of whether
an Event of Default has occurred, without notice to or the assent of Borrower:

               5.3.1 notify any entity obligated with respect to any Monetary
Collateral (an "Obligated Party"), by means of the letter attached hereto as
Exhibit C, the form and substance of which Borrower hereby consents, that the
underlying Monetary Collateral has been assigned to Lender by Borrower and that
payment thereof is to be made to the order of and directly and solely to Lender;
and

               5.3.2 send, or cause to be sent by its designee, written or
telephonic requests (which may identify the sender by a pseudonym) for
verification of any Monetary Collateral directly to the appropriate Obligated
Party or any bailee with respect thereto. At Lender's request, all invoices and
statements sent to any Obligated Party or any bailee, shall state that the
relevant Monetary Collateral has been assigned to Lender and that any payments
in respect thereof are payable directly and solely to Lender.

        5.4 LENDER'S POWERS. Borrower hereby authorizes Lender and any designee
of Lender, at Borrower's sole expense, to exercise at any time in Lender's or
such designee's discretion, all or any of the following powers, which powers are
irrevocable until all of the Obligations have been paid in full:

               5.4.1 receive, take, endorse, negotiate, assign, deliver, accept
and deposit, in the name of Lender or Borrower, any and all cash, checks,
commercial paper, letters of credit, drafts, remittances and other instruments
and documents relating to the Collateral or the proceeds thereof;

               5.4.2 to accept, indorse and deposit on behalf of Borrower any
checks tendered by an Account Debtor "in full payment" of its obligation to
Borrower. Borrower shall not assert against Lender any claim arising therefrom,
irrespective of whether such action by Lender effects an accord and satisfaction
of Borrower's claims, under Section 3-311 of the Uniform Commercial Code, or
otherwise;

               5.4.3 take or bring, in the name of Lender or Borrower, all
steps, actions, suits or proceedings deemed by Lender necessary or desirable to
effect collection of or other realization upon any Collateral;

               5.4.4 after an Event of Default, change the address for delivery
of mail to Borrower and to receive and open mail addressed to Borrower;

               5.4.5 after an Event of Default, upon any terms and conditions,
extend the time of payment of, compromise, or settle for cash, credit, return of
merchandise, any and all Monetary Collateral and discharge or release any
Obligated Party without affecting any of the Obligations;

               5.4.6 execute in the name of Borrower and file against Borrower
in favor of Lender financing statements or amendments with respect to any or all
of the Collateral; execute in the name of Borrower and file on behalf of
Borrower with such governmental authorities as are appropriate such documents
(including, without limitation, applications, certificates, and tax returns) as
may be required for purposes of having Borrower qualified to transact business
in a particular state or geographic location; and

               5.5 pay any sums necessary to discharge any lien or encumbrance
which is senior to Lender's security interest in the Collateral, which sums
shall be included as Obligations hereunder, and which sums shall accrue interest
at the Default Rate until paid in full.

                                       7
<PAGE>

        5.6 RELEASE. Borrower hereby releases and exculpates Lender, its
officers, employees, agents, designees, attorneys, and accountants from any
liability arising from any acts under this Agreement or in furtherance thereof,
whether of omission or commission, and whether based upon any error of judgment
or mistake of law or fact, except for gross negligence or willful misconduct. In
no event shall Lender have any liability to Borrower for lost profits or other
special or consequential damages.

        5.7 NO AMENDMENTS. After written notice by Lender to Borrower, and
automatically, without notice, after an Event of Default, Borrower shall not,
without the prior written consent of Lender in each instance:

               5.7.1 grant any extension of time for payment of any Monetary
Collateral;

               5.7.2 compromise or settle any Monetary Collateral for less than
the full amount thereof;

               5.7.3 release in whole or in part any Obligated Party; or

               5.7.4 grant any credits, discounts, allowances, deductions,
return authorizations or the like with respect to any Monetary Collateral.

        5.8 DELIVERY OF COLLATERAL. At such times as Lender may request and in
the manner specified by Lender, Borrower shall deliver to Lender or Lender's
representative original invoices, agreements, proof of rendition of services and
delivery of goods and other documents evidencing or relating to the transactions
which gave rise to any of the Collateral, together with customer statements,
schedules describing the Monetary Collateral or statements of account and
confirmatory assignments to Lender of the Monetary Collateral, in form and
substance satisfactory to Lender, and duly executed by Borrower. Without
limiting the provisions of any other section of this Agreement, Borrower will
promptly notify Lender, in writing, of Borrower's granting of credits,
discounts, allowances, deductions, return authorizations or the like with
respect to any Monetary Collateral. In no event shall any such schedule or
confirmatory assignment (or the absence thereof or omission of any Monetary
Collateral therefrom) limit or in any way be construed as a waiver, limitation,
or modification of the Liens or rights of Lender or the warranties,
representations, and covenants of Borrower under this Agreement. In addition, in
the event that any Collateral, including proceeds, is evidenced by or consists
of Negotiable Collateral, Borrower shall, immediately upon written request
therefor from Lender, endorse and assign such Negotiable Collateral over to
Lender and deliver actual physical possession of the Negotiable Collateral to
Lender.

        5.9 CONDITIONS PRECEDENT TO ALL ADVANCES. Subject to the other terms and
conditions contained herein, Lender's obligation to make any Credit
Accommodation available to Borrower is subject to the satisfaction of, or waiver
of, immediately prior to or concurrently with the making of such Credit
Accommodation, the following conditions precedent:

               5.9.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in the Loan Documents shall be true and correct in all
respects on and as of the date of such Advance.

               5.9.2 NO EVENT OF DEFAULT. No Event of Default or event which,
with the giving of notice or passage of time would constitute an Event of
Default, shall have occurred and be continuing on the date of such Advance.

               5.9.3 PAYMENT OF ALL FEES. Borrower shall have paid to Lender all
accrued and unpaid fees and other amounts due and payable hereunder and pursuant
to the terms hereof.

               5.9.4 NO INJUNCTIONS, ETC. No injunction, writ, restraining
order, or other order of any nature prohibiting, directly or indirectly, the
making of such Advance shall have been issued and remain in force by any
governmental authority against Borrower or Lender.

6. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender as
follows, the truth and accuracy of which, and compliance with which, shall be
continuing conditions of the making of any Credit Accommodations:

        6.1 PRIORITY INTEREST. Borrower has good and indefeasible title to the
Collateral, free and clear of liens, claims, security interests, or
encumbrances, except for Permitted Liens.

        6.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are and will remain bona
fide existing obligations created by the sale and delivery of Inventory or the
rendition of services to Account Debtors in the ordinary course of Borrower's
business, unconditionally owed to Borrower without defenses, disputes, offsets,
counterclaims, or rights of return or cancellation. At the time of the creation
of an Eligible Account Borrower has not received notice of actual or imminent
bankruptcy, insolvency, or material impairment of the financial condition of any
applicable Account Debtor regarding such Eligible Account.

        6.3 LOCATION OF COLLATERAL. The Inventory and Equipment are not stored
with a bailee, warehouseman, or similar party (without Lender's prior written
consent) and are located only at the locations identified on Exhibit D hereto.

        6.4 ACCURATE RECORDS. Borrower now keeps, and hereafter at all times
shall keep, correct and accurate records itemizing and describing the kind,
type, quality, and quantity of the Inventory, and Borrower's cost therefor.

        6.5 CHIEF EXECUTIVE OFFICE. The chief executive office of Borrower is
located at the address indicated in the preamble to this Agreement.

        6.6 BORROWER'S FEDERAL EMPLOYER IDENTIFICATION NUMBER. Borrower's
Federal Employer Identification Number is as set forth in Section 1.2 hereof.

        6.7 NO ACTIONS, ETC. There are no actions or proceedings pending by or
against Borrower before any court or administrative agency and Borrower does not
have knowledge or belief of any pending, threatened, or imminent litigation,
governmental investigations, or claims, complaints, actions, or prosecutions
involving Borrower or any Guarantor of the Obligations, except for ongoing
collection matters in which Borrower is the plaintiff.

                                       8
<PAGE>

        6.8 FINANCIAL STATEMENTS. All financial statements relating to Borrower
or any Guarantor of the Obligations that have been delivered by Borrower to
Lender have been prepared in accordance with GAAP and fairly present Borrower's
(or such Guarantor's, as applicable) financial condition as of the date thereof
and Borrower's results of operations for the period then ended. There has not
been a material adverse change in the financial condition of Borrower (or such
Guarantor, as applicable) since the date of the latest financial statements
submitted to Lender on or before the Closing Date.

7. AFFIRMATIVE COVENANTS. Until full payment of the Obligations and termination
of this Agreement, Borrower shall:

        7.1 FINANCIAL STATEMENTS, REPORTS AND CERTIFICATIONS. Furnish to Lender,
in form and substance satisfactory to Lender:

               7.1.1 ANNUAL FINANCIAL STATEMENTS. As soon as possible after the
end of each fiscal year of Borrower, and in any event within Ninety (90) days
thereafter:

                      7.1.1.1 a complete copy of Borrower's financial
statements, including but not limited to (a) the management letter, if any, (b)
the balance sheet as of the close of the fiscal year, and (c) the income
statement for such year, together with a statement of cash flows, Audited by a
firm of independent certified public accountants of recognized standing and
acceptable to Lender; or if permitted by Lender in writing, by Borrower; and

                      7.1.1.2 a statement certified by the chief financial
officer of Borrower that Borrower is in compliance with all the terms,
conditions, covenants and warranties of this Agreement.

               7.1.2 OTHER FINANCIAL STATEMENTS. No later than Thirty (30) days
after the close of each month (an "Accounting Period"), Borrower's balance sheet
as of the close of such Accounting Period and its income statement for that
portion of the then current fiscal year through the end of such Accounting
Period certified by Borrower's chief financial officer as being complete,
correct, and fairly representing its financial condition and results of
operations.

               7.1.3 TAX RETURNS. Copies of each of Borrower's federal income
tax returns, and any amendments thereto, within Fifteen (15) days of the filing
thereof with the Internal Revenue Service.

               7.1.4 INVENTORY REPORTS. A listing of all Borrower's Inventory,
and any other Collateral specified by Borrower, wherever located, based upon a
physical count taken by Borrower every N/A months and whenever requested by
Lender.

        7.2 INSPECTIONS.

               7.2.1 Permit Lender or any representatives thereof, during usual
business hours, without notice to Borrower, to periodically:

                      7.2.1.1 have access to all premises where Collateral is
located for the purposes of inspecting (and removing, if after the occurrence of
an Event of Default) any of the Collateral, including Borrower's books and
records; and

                      7.2.1.2 permit Lender or its designees to inspect, audit,
make copies of, and make extracts from Borrower's Books as Lender may request.

               7.2.2 Without expense to Lender, Lender may use any of Borrower's
personnel, equipment, including computer equipment, programs, printed output and
computer readable media, supplies and premises for the collection of accounts
and realization on other Collateral as lender, in its sole discretion, deems
appropriate.

               7.2.3 Borrower hereby irrevocably authorizes all accountants and
third parties, in the form attached hereto as Exhibit E, to disclose and deliver
to Lender at Borrower's expense, all financial information, books and records,
work papers, management reports and other information in their possession
relating to Borrower. In addition to the foregoing, Borrower hereby permits
Lender at any time to access electronically information concerning any accounts
maintained by Borrower with any bank or other financial institution so long as
such access is in furtherance of, or to monitor compliance with, the terms of
this Agreement.

        7.3 EXPENSES.

               7.3.1 GENERALLY. Pay all reasonable out-of-pocket expenses of
Lender (including, but not limited to, fees and disbursements of Lender's
counsel) incident to (whether by judicial proceedings or otherwise, and whether
any resulting dispute resolution procedure involving tort, contract or other
claims):

                      7.3.1.1 the preparation, negotiation, execution,
administration and enforcement of the Loan Documents, any amendments, extensions
and renewals thereof, and any other documents prepared in connection with any
transactions between Borrower and Lender, whether or not executed;

                      7.3.1.2 any expenses incurred by Lender (whether or not
for the benefit of Borrower) under this Agreement, including, without
limitation, all expenses for postage relating to the mailing of statements,
invoices, and verifications, and all expenses relating to any audits of all or
any portion of the Collateral;

                      7.3.1.3 the protection of Lender's rights under the Loan
Documents;

                      7.3.1.4 defending against any and all claims against
Lender relating to any of its acts of commission or omission directly or
indirectly relating to the Loan Documents;

                                       9
<PAGE>

                      7.3.1.5 or in any way arising out of a bankruptcy
proceeding commenced by or against Borrower, including but not limited to
expenses incurred in enforcing or defending Lender's claims against Borrower or
the Collateral, defending any avoidance actions, and expenses related to the
administration of said proceeding.

               7.3.2 INDEMNIFICATION. Indemnify and save Lender harmless from
any and all liability with respect to any stamp or other taxes (other than
transfer or income taxes) which may be determined to be payable in connection
with the execution of the Loan Documents or any action of Lender with respect to
the Collateral, including, without limitation, the transfer of the Collateral to
Lender's name or that of Lender's nominee or any purchaser at a foreclosure
sale.

        7.4 COSTS AND EXPENSES - ENFORCEMENT OF JUDGMENTS. Reimburse Lender for
all costs and expenses, including attorneys' fees, which Lender incurs in
enforcing any judgment rendered in connection with this Agreement. This
provision is severable from all other provisions hereof and shall survive, and
not be deemed merged into, such judgment.

        7.5 TAXES AND EXPENSES REGARDING BORROWER'S ASSETS.

               7.5.1 Make timely payment or deposit of all taxes, assessments or
contributions required of Borrower. If Borrower fails to make any such payment
or deposit or furnish proof of such payment immediately upon Lender's request,
Lender may, in its sole discretion and without notice to Borrower:

                      7.5.1.1 make payment of the same or any part thereof; or

                      7.5.1.2 set up such reserves against the Obligations as
Lender deems necessary to satisfy the liability therefore, or both.

               7.5.2 Lender may conclusively rely on statements of the amount
owing or other official statements issued by the appropriate governmental
agency. Any payment made by Lender shall constitute neither:

                      7.5.2.1 an agreement by Lender to make similar payments in
the future; nor

                      7.5.2.2 a waiver by Lender of any default under the Loan
Documents. Lender need not inquire into, nor contest the validity of, any
expense, tax, security interest, encumbrance or lien, and the receipt of the
usual official notice requiring the payment thereof shall be conclusive evidence
that the same was validly due and owing.

        7.6 LOCATION OF COLLATERAL. Give Lender written notice immediately upon
forming an intention to change the location of its chief place of business or
any of the Collateral.

        7.7 CHANGE IN NAME. Give Lender written notice immediately upon forming
an intention to change its name, or form of business organization, or merge with
another entity.

        7.8 INSURANCE. At all times maintain, with financially sound and
reputable insurers, casualty insurance with respect to the Collateral and other
assets. All such insurance policies shall be in such form, substance, amounts
and coverage as may be satisfactory to Lender and shall provide for thirty (30)
days prior written notice to Lender of cancellation or reduction of coverage.
Borrower hereby irrevocably authorizes Lender and any designee of Lender to
obtain at Borrower's expense, and, after an Event of Default, to adjust or
settle any claim or other matter under or arising pursuant to such insurance or
to amend or cancel such insurance. Borrower shall deliver to Lender evidence of
such insurance and a Lender's loss payable endorsement naming Lender as loss
payee as to all existing and future insurance policies relating to the
Collateral. Borrower shall deliver to Lender, in kind, all instruments
representing proceeds of insurance received by Borrower. Lender may apply any
and all insurance proceeds received at any time to the cost of repairs to or
replacement of any portion of the Collateral or, at Lender's option, to the
payment of or as security for any of the Obligations, whether or not due, in any
order or manner as Lender determines.

8. NEGATIVE COVENANTS. Until full payment of the Obligations and termination of
this Agreement, Borrower will not:

        8.1 LIENS AND ENCUMBRANCES. Create, incur, assume, or permit to exist,
directly or indirectly, any lien on or with respect to any of its property or
assets, of any kind, whether now owned or hereafter acquired, or any income or
profits therefrom, except for Permitted Liens.

        8.2 MERGERS, ETC. Enter into any acquisition, merger, consolidation,
reorganization, or recapitalization, or reclassify its capital stock, or
liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, assign, lease, transfer, or otherwise dispose of,
in one transaction or a series of transactions, all or any substantial part of
its business, property, or assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or substantially all of the properties,
assets, stock, or other evidence of beneficial ownership of any entity.

        8.3 TRANSFER OF ASSETS. Enter into any transaction not in the ordinary
and usual course of Borrower's business, including the sale, lease, or other
disposition of, moving, relocation, or transfer, whether by sale or otherwise,
of any of Borrower's properties, assets (other than sales of Inventory to buyers
in the ordinary course of Borrower's business as currently conducted).

        8.4 CHANGE OF NAME. Change Borrower's name, Federal Employer
Identification Number, business structure, or identity, or add any new
fictitious name.

        8.5 SUSPENSION OF BUSINESS. Suspend or go out of a substantial portion
of its business.

                                       10
<PAGE>

        8.6 CHIEF EXECUTIVE OFFICE. Without thirty (30) days prior written
notification to Lender, relocate its chief executive office to a new location
and so long as, at the time of such written notification, Borrower provides any
financing statements or fixture filings necessary to perfect and continue
perfected Lender's security interests and also provides to Lender a landlord's
waiver in form and substance satisfactory to Lender. The Inventory and Equipment
shall not at any time now or hereafter be stored with a bailee, warehouseman, or
similar party without Lender's prior written consent.

        8.7 FINANCIAL COVENANTS.

               8.7.1 TANGIBLE NET WORTH. Permit its tangible net worth at any
time to be less than N/A; or

               8.7.2 DEBT-TO WORTH RATIO. Permit the ratio of its aggregate debt
to tangible net worth at any time to be greater than N/A.

9. EVENTS OF DEFAULT. Each of the following events or conditions shall
constitute an "Event of Default":

        9.1 Borrower defaults in the payment or performance of any Obligations
when due, whether at maturity, upon acceleration, or otherwise;

        9.2 Borrower is in default with respect to the Loan Documents;

        9.3 The Obligations at any time exceed the Allowable Amount;

        9.4 Borrower or any Guarantor fails to pay any indebtedness for borrowed
funds when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) or fails to perform or observe any term,
covenant, or condition of any agreement relating to any such indebtedness, if
the effect of such failure to perform or observe is the acceleration of the
maturity of such indebtedness, whether or not such failure is waived by the
obligee of such indebtedness; or any such indebtedness is declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;

        9.5 An order for relief is entered against any Obligor by any United
States Bankruptcy Court; or any Obligor does not generally pay its debts as they
become due (within the meaning of 11 U.S.C. 303(h) as at any time amended, or
any successor statute thereto); or any Obligor makes an assignment for the
benefit of creditors; or any Obligor applies for or consents to the appointment
of a custodian, receiver, trustee, or similar officer for it or for all or any
substantial part of its assets, or such custodian, receiver, trustee, or similar
officer is appointed without the application or consent of any Obligor; or any
Obligor institutes (by petition, application, answer, consent, or otherwise) any
bankruptcy, insolvency, reorganization, moratorium, arrangement, readjustment of
debt, dissolution, liquidation or similar proceeding relating to it under the
laws of any jurisdiction; or any such proceeding shall be instituted (by
petition, application, or otherwise) against any Obligor; or any judgment, writ,
warrant of attachment, execution, or similar process shall be issued or levied
against a substantial portion of the property of any Obligor;

        9.6 An adverse change occurs with respect to the financial condition or
operations of Borrower which results in a material impairment of the prospect of
repayment of the Obligations;

        9.7 A sale, hypothecation, assignment or other disposition is made of
twenty (20%) percent or more of the beneficial interest in any class of voting
stock of Borrower;

        9.8 Any Guarantor fails to perform or observe any of such Guarantor's
obligations under any Guaranty, or shall notify Lender of its intention to
rescind, modify, terminate or revoke the Guaranty with respect to future
transactions, or the Guaranty shall cease to be in full force and effect for any
reason whatever;

        9.9 Any Subordinating Creditor fails to perform or observe any of such
Subordinating Creditor's obligations under any Subordination Agreement, or
notifies Lender of the Subordinating Creditor's intention to rescind, modify,
terminate or revoke the Subordination Agreement with respect to future
transactions, or the Subordination Agreement ceases to be in full force and
effect for nay reason whatsoever;

        9.10 Any of the Key Employees fails to devote one hundred (100%) percent
of their efforts in furtherance of the business affairs of Borrower for any one
month, or ceases to be employed by Borrower; or

        9.11 Any provision of this Agreement or any of the Loan Documents
ceases, for any reason, to be valid and binding on Borrower.

        9.12 A court determines Borrower does not have rights in any of the
Collateral.

10. REMEDIES.

        10.1 Upon the occurrence of any Event of Default (other than an Event of
Default arising under Section 9.5 hereof), at Lender's option:

               10.1.1 Lender may declare this Agreement and all of Lender's
obligations hereunder terminated;

               10.1.2 Lender may declare all Obligations to be immediately due
and payable, without presentment, demand, protest, or notice of any kind, all of
which are hereby expressly waived by Borrower;

                                       11
<PAGE>

               10.1.3 all Obligations shall accrue interest at the Default Rate;
and

               10.1.4 Lender may, immediately and without expiration of any
period of grace, enforce payment of all Obligations and exercise any and all
other remedies granted to it under the Loan Documents, at law, in equity, or
otherwise.

               10.1.5 Lender may further develop, modify, sell or assign all or
any portion of the Collateral hereunder.

        10.2 Upon the occurrence of an Event of Default arising under Section
9.5 hereof:

               10.2.1 all Lender's obligations hereunder shall automatically
terminate;

               10.2.2 all Obligations to be immediately due and payable, without
presentment, demand, protest, or notice of any kind, all of which are hereby
expressly waived by Borrower;

               10.2.3 all Obligations shall accrue interest at the Default Rate;
and

               10.2.4 Lender may, immediately and without expiration of any
period of grace, enforce payment of all Obligations and exercise any and all
other remedies granted to it under the Loan Documents, at law, in equity, or
otherwise.

        10.3 BORROWER WAIVES ANY REQUIREMENTS THAT LENDER INFORM BORROWER BY
AFFIRMATIVE ACT OR OTHERWISE OF ANY ACCELERATION OF BORROWER'S OBLIGATIONS
HEREUNDER. FURTHER, LENDER'S FAILURE TO CHARGE OR ACCRUE INTEREST OR FEES AT ANY
"DEFAULT" OR "PAST DUE" RATE SHALL NOT BE DEEMED A WAIVER BY LENDER OF ITS CLAIM
THERETO.

11. TERMINATION.

        11.1 This Agreement shall become effective upon the execution and
delivery hereof by Borrower and Lender and shall continue in full force and
effect for one (1) year from the date hereof, and shall be further annually
extended automatically unless Borrower gives Lender written notice of its
intention to terminate at least sixty (60) days prior to each such anniversary,
or Lender gives the Borrower at least ten (10) days notice prior to each
anniversary, whereupon this Agreement shall terminate on said anniversary.

        11.2 Upon the effective date of termination of this Agreement, the
unpaid balance of the Obligations shall be due and payable without demand or
notice.

12. REVOCATION OF BORROWER'S RIGHT TO SELL INVENTORY FREE AND CLEAR OF LENDER'S
SECURITY INTEREST. Lender may, upon the occurrence of an Event of Default,
revoke Borrower's right to sell Inventory free and clear of Lender's security
interest therein.

13. NO LIEN TERMINATION WITHOUT RELEASE. In recognition of Lender's right to
have all its attorneys' fees and other expenses incurred in connection with this
Agreement secured by the Collateral, notwithstanding payment in full of all
Obligations by Borrower, Lender shall not be required to record any terminations
or satisfactions of any of its liens on the Collateral unless and until Borrower
and all Guarantors have executed and delivered to Lender general releases in a
form reasonably acceptable to Lender. Borrower understands that this provision
constitutes a waiver of its rights under Section 9-404 of the UCC.

14. DISCLAIMER FOR NEGLIGENCE. Lender shall not be liable for any claims,
demands, losses or damages made, claimed or suffered by Borrower, except such as
may arise through or could be caused by Lender's gross negligence or willful
misconduct.

15. LIMITATION OF CONSEQUENTIAL DAMAGE. Lender shall not be responsible for any
lost profits of Borrower arising from any breach of contract, tort (excluding
the Lender's gross negligence or willful misconduct), or any other wrong arising
from the establishment, administration or collection of the Obligations.

16. ACCOUNT STATED. Lender shall render to Borrower a statement setting forth
the transactions arising hereunder. Each statement shall be considered correct
and binding upon Borrower, absent manifest error, as an account stated, except
to the extent that Lender receives, within thirty (30) days after the mailing of
such statement, written notice from Borrower of any specific exceptions by
Borrower to that statement.

17. RETENTION OF RECORDS. Lender shall retain any documents, schedules, invoices
or other papers delivered by Borrower only for such period as Lender, at its
sole discretion, may determine necessary, after which time Lender may destroy
such records without notice to or consent from Borrower.

                                       12
<PAGE>

18. NOTICES TO THIRD PARTIES. Lender shall have the right at any time to give
any Guarantor or Subordinating Creditor notice of any fact or event relating to
this Agreement, as Lender may deem necessary or desirable in Lender's sole
discretion, including, without limitation, Borrower's financial condition.
Borrower shall provide to each Guarantor and Subordinating Creditor a copy of
each notice, statement or report required to be given to Lender under any of the
paragraphs of this section.

19. INFORMATION TO PARTICIPANTS. Lender may furnish any financial or other
information concerning Borrower, or any of its subsidiaries, heretofore or
hereafter provided by Borrower to Lender, pursuant to this Agreement or
otherwise, to any prospective or actual purchaser of any participation or other
interest in any loans made by Lender to Borrower (whether under this Agreement
or otherwise), or to any prospective purchaser of any securities issued or to be
issued by Lender.

20. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding among and between the parties hereto, and supersedes all prior or
contemporaneous agreements and understandings between said parties, verbal or
written, express or implied, relating to the subject matter hereof. No promises
of any kind have been made by Lender or any third party to induce Borrower to
execute this Agreement. No course of dealing, course of performance or trade
usage, and no parol evidence of any nature, shall be used to supplement or
modify any terms of this Agreement.

21. MISCELLANEOUS.

        21.1 NOTICES.

               21.1.1 All notices required to be given to any entity other than
Lender shall be deemed given upon the first to occur of:

                      21.1.1.1 deposit thereof in a receptacle under the control
of the United States Postal Service;

                      21.1.1.2 transmittal by electronic means to a receiver
under the control of such entity; or

                      21.1.1.3 actual receipt by such party or an employee or
agent of such entity.

               21.1.2 All notices required to be given to Lender hereunder shall
be deemed given upon actual receipt by a responsible officer of Lender. For the
purposes hereof, notices hereunder shall be sent to the following addresses, or
to such other addresses as each such entity may in writing hereafter indicate:

                      BORROWER

                      Nutraceutix, Inc.

ADDRESS:              8340 154th Avenue N. E.

                      Redmond, WA  98052-3864

                      Telephone Number: (425) 883-9518
                      Telefacsimile Number: (425) 869-1020
                      Attention: Steven Moger

                      LENDER

ADDRESS:              14205 S.E. 36th Street, Suite 350
                      Bellevue, Washington 98006
                      Telephone Number:  (425) 747-9090
                      Telefacsimile Number: (425) 747-1404
                      Attention:  Mr. Thomas E. Cleveland

        21.2 SURVIVAL. All representations, warranties and agreements herein
contained shall be effective so long as any portion of this Agreement remains
executory.

        21.3 AMENDMENT AND WAIVER. Neither this Agreement nor any provisions
hereof may be changed, waived, discharged or terminated, nor may any consent to
the departure from the terms hereof be given, orally (even if supported by new
consideration), but only by an instrument in writing signed by all parties to
this Agreement. Any waiver or consent so given shall be effective only in the
specific instance and for the specific purpose for which given.

                                       13
<PAGE>

        21.4 NO WAIVER. No failure to exercise and no delay in exercising any
right, power, or remedy hereunder shall impair any right, power, or remedy which
Lender may have, nor shall any such delay be construed to be a waiver of any of
such rights, powers, or remedies, or any acquiescence in any breach or default
hereunder; nor shall any waiver by Lender of any breach or default by Borrower
hereunder be deemed a waiver of any default or breach subsequently occurring.
All rights and remedies granted to Lender hereunder shall remain in full force
and effect notwithstanding any single or partial exercise of, or any
discontinuance of action begun to enforce, any such right or remedy. The rights
and remedies specified herein are cumulative and not exclusive of each other or
of any rights or remedies which Lender would otherwise have. Any waiver, permit,
consent or approval by Lender of any breach or default hereunder must be in
writing and shall be effective only to the extent set forth in such writing and
only as to that specific instance.

        21.5 CHOICE OF LAW. This Agreement and all transactions contemplated
hereunder and/or evidenced hereby shall be governed by, construed under, and
enforced in accordance with the internal laws of the State of Washington.

        21.6 WAIVER OF STATUTE OF LIMITATIONS. Borrower waives the pleading of
any statute of limitations with respect to any and all actions in connection
herewith. To the extent that Borrower may now or in the future have any claim
against Lender, arising out of this Agreement or the transaction contemplated
herein whether in contract or tort or otherwise, Borrower must assert such claim
within one year of it accruing. Failure to assert such claim within one year
shall constitute a waiver thereof. Borrower agrees that such period is
reasonable and sufficient for it to investigate and act upon the claim. This
Section shall survive any termination of this Agreement. A copy of the waiver
may be filed as a written consent in any judicial proceeding.

        21.7 VENUE. The parties agree that any suit, action or proceeding
arising out of the subject matter hereof, or the interpretation, performance or
breach of this Agreement, shall, if Lender so elects, be instituted in the
United States District Court for the Western District of Washington or any court
of the State of Washington located in King County (the "Acceptable Forums"),
each party agrees that the Acceptable Forums are convenient to it, and each
party irrevocably submits to the jurisdiction of the Acceptable Forums,
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement, and waives any and all objections to jurisdiction or venue
that it may have under the laws of the State of Washington or otherwise in those
courts in any such suit, action or proceeding. Should such proceeding be
initiated in any other forum, Borrower waives any right to oppose any motion or
application made by Lender as a consequence of such proceeding having been
commenced in a forum other than an Acceptable Forum.

        21.8 WAIVER OF TRIAL BY JURY. IN RECOGNITION OF THE HIGHER COSTS AND
DELAY WHICH MAY RESULT FROM A JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING
HEREUNDER, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

        21.9 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if all
signatures were upon the same instrument. Delivery of an executed counterpart of
the signature page to this Agreement by telefacsimile shall be effective as
delivery of a manually executed counterpart of this Agreement, and any party
delivering such an executed counterpart of the signature page to this Agreement
by telefacsimile to any other party shall thereafter also promptly deliver a
manually executed counterpart of this Agreement to such other party, provided
that the failure to deliver such manually executed counterpart shall not affect
the validity, enforceability, or binding effect of this Agreement.

                                       14
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.

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

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

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

BORROWER:                               Nutraceutix, Inc.

                                        By:
                                               ---------------------------------

                                        Name:
                                               ---------------------------------

                                        Title:
                                               ---------------------------------

LENDER:                                 ACCESS BUSINESS FINANCE, LLC

                                        By:
                                               ---------------------------------

                                        Name:
                                               ---------------------------------

                                        Title:
                                               ---------------------------------

                                       15<PAGE>

                                                                   EXHIBIT 10.1

                               COLUMBIA RIVER BANK
                     EXECUTIVE SALARY CONTINUATION AGREEMENT

        THIS AGREEMENT is adopted effective June 3, 2002 by and between COLUMBIA
RIVER BANK, a state-chartered commercial bank with headquarters in The Dalles,
Oregon ("Bank") and ROGER L. CHRISTENSEN (the "Executive").

                                 R E C I T A L S

        WHEREAS, the Executive is an employee of the Bank;

        WHEREAS, the Executive's experience and knowledge of the affairs of the
Bank and the banking industry are extensive and valuable;

        WHEREAS, the Bank desires to establish a compensation benefit program
consisting of salary continuation benefits for the Executive, to be paid from
the Bank's general assets.

        WHEREAS, it is deemed to be in the best interests of the Bank to provide
the Executive with such benefits, on the terms and conditions set forth herein,
in order to reasonably induce the Executive to remain in the Bank's employment;
and

        WHEREAS, the Executive and the Bank wish to specify in writing the terms
and conditions upon which this additional compensatory incentive will be
provided to the Executive;

        NOW, THEREFORE, in consideration of the services to be performed by the
Executive in the future, as well as the mutual promises and covenants contained
herein, the Executive and the Bank agree as follows:

SECTION 1 - Definitions

        Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:

        "Change of Control" means the transfer of shares of the Bank's voting
common stock, within twelve (12) months by the Executive's Termination of
Employment for reasons other than death, Disability or retirement, such that one
entity or one person acquires (or is deemed to acquire when applying Section 318
of the Code) "control" of the Bank's common stock. As used herein, "control"
shall mean the acquisition of twenty-five percent (25%) or more of the voting
securities of the Bank or its holding company by any person, or persons acting
as a group within the meaning of Section 13(d) of the Securities Exchange Act of
1934, or to such acquisition of a percentage between ten percent (10%) and
twenty-five percent (25%) if the Board or the Comptroller of the Currency, the
FDIC, or the Federal Reserve Bank have made a determination that such

                                     Page 1
<PAGE>

acquisition constitutes or will constitute control of the Bank or its holding
company. The term "person" refers to an individual, corporation, bank, bank
holding company, or other entity, but excludes any Employee Stock Ownership Plan
established for the benefit of employees of the Bank, its holding company, or
any of its affiliates.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Demotion" means (1) a material reduction in the Executive's duties
coupled with the Executive's loss of his or her existing executive officer
title; or (2) a material reduction in the Executive's base salary, incentive
compensation or benefits.

        "Disability" means the Executive's suffering a sickness, accident or
injury which has been determined by the carrier of any individual or group
disability insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the Bank of the
carrier's or Social Security Administration's determination upon the request of
the Bank.

        "Early Termination" means the Termination of Employment before Normal
Retirement Age for reasons other than death, Disability, Termination for Cause
or following a Change of Control.

        "Early Termination Date" means the month, day and year in which Early
Termination occurs.

        "Effective Date" means 10/01/01.

        "Holding Company" shall mean Columbia Bancorp, the parent corporation of
the Bank.

        "Normal Retirement Age" means the Executive's 62nd birthday.

        "Normal Retirement Date" means the later of the Normal Retirement Age or
Termination of Employment.

        "Plan Year" means a twelve-month period commencing on 10/01 and ending
on 09/30 of each calendar year.

        "Termination for Cause" shall have the meaning set forth in Section 5
herein.

        "Termination of Employment" means that the Executive ceases to be
employed by the Bank for any reason, voluntary or involuntary, other than by
reason of a leave of absence approved by the Bank.

                                     Page 2
<PAGE>

SECTION 2 - Benefits During Lifetime

        2.1 Normal Retirement Benefit. Upon Termination of Employment on or
after the Normal Retirement Age for reasons other than death, the Bank shall pay
to the Executive the benefit described in this Section 2.1 in lieu of any other
benefit under this Agreement.

        (1) Amount of Benefit. The annual benefit under this Section 2.1 is
$73,312. Commencing at the end of the first Payment Year, and each Payment Year
thereafter, the annual benefit shall be increased 3% percent from the previous
Payment Year.

        (2) Payment of Benefit. The Bank shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing with the month following
the Executive's Normal Retirement Date, paying the annual benefit to the
Executive for a period of 20 years.

        2.2 Early Termination Benefit. Upon Early Termination, the Bank shall
pay to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Agreement.

        (1) Amount of Benefit. The benefit under this Section 2.2 is the Early
Termination Annual Benefit. The amount of benefit is determined from the
Executive's actual benefit accrual balance at time of employment termination
(determined by vesting the Executive 100 percent of the actual Accrual Balance
at employment termination). The benefit is determined by calculating a 20-year
fixed annuity from the Accrual Balance, crediting interest on the unpaid balance
at an annual rate of 8 percent, compounded monthly.

        (2) Payment of Benefit. The Bank shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing with the month following
the Normal Retirement Age, paying the annual benefit to the Executive for a
period of 20 years.

        2.3 Disability Benefit. If the Executive terminates employment due to
Disability prior to Normal Retirement Age, the Bank shall pay to the Executive
the benefit described in this Section 2.3 in lieu of any other benefit under
this Agreement.

        (1) Amount of Benefit. The benefit under this Section 2.3 is the
Disability Annual Benefit. The amount of this benefit is determined by vesting
the Executive in 100 percent of the actual Accrual Balance at employment
termination. This benefit is determined by calculating a 20-year fixed annuity
from the Accrual Balance, crediting interest on the unpaid balance at an annual
rate of 8 percent, compounded monthly.

        (2) Payment of Benefit. The Bank shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing with the month following
the

                                     Page 3
<PAGE>

Termination of Employment, paying the annual benefit to the Executive for a
period of 20 years.

        2.4 Change of Control Benefit. Upon a Change of Control, followed within
the time periods described below by the Executive's Demotion, or Termination of
Employment for reasons other than death, Disability or retirement, the Bank
shall pay to the Executive the benefit described in this Section 2.4 in lieu of
any other benefit under this Agreement.

        (1) Amount of Benefit. The benefit under this Section 2.4 is the Change
of Control Annual Benefit. The amount of this benefit is determined at the time
of Termination of Employment or Demotion as follows:

            (i) if the Termination of Employment or Demotion occurs within
twelve (12) months of the Change of Control, by (a) vesting the Executive 100%
in the benefit accrual balance, and (b) adding to the accrual balance the next
scheduled three (3) plan year accrual account increases.

            (ii) if the Termination of Employment or Demotion occurs within
twenty-four (24) months of the Change of Control, by (a) vesting the Executive
100% in the benefit accrual balance, and (b) adding to the accrual balance the
next scheduled two (2) plan year accrual account increases.

            (iii) if the Termination of Employment or Demotion occurs within
thirty-six (36) months of the Change of Control, by (a) vesting the Executive
100% in the benefit accrual balance, and (b) adding to the accrual balance the
next scheduled one (1) plan year accrual account increase.

        (2) Payment of Benefit. The Bank shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing with the month following
the Termination of Employment or Demotion, paying the annual benefit to the
Executive for a period of 20 years.

        2.5 Early Retirement. Notwithstanding an Early Retirement as defined
herein, the benefits payable to the Executive shall not commence until the
Executive reaches Normal Retirement Age.

        (1) Definition. "Early Retirement" shall mean retirement by the
Executive on the later of: (i) the date on which the Executive reaches the age
of 55, if on such date the Executive has been continuously employed by the Bank
for at least ten (10) years; or (ii) the date on which the Executive has been
continuously employed by the Bank for ten (10) years if the Executive is over
the age of 55 on such date. At Normal Retirement Age, and each Payment Year
thereafter, the annual benefit shall be increased 3% percent from the previous
Payment Year.

                                     Page 4
<PAGE>

        2.6 Excess Parachute Payment. Notwithstanding any provision of this
Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement to the extent the benefit would create an excise tax under the excess
parachute rules of Section 280G of the Code.

SECTION 3 - Death Benefits

        3.1 Death During Active Service. If the Executive dies while in the
active service of the Bank, the Bank shall pay to the Executive's beneficiary
the benefit described in this Section 3.1. This benefit shall be paid in lieu of
the benefits under Article 2.

        (1) Amount of Benefit. The annual benefit under this Section 3.1 is the
Normal Retirement Benefit amount described in Section 2.1.1.

        (2) Payment of Benefit. The Bank shall pay the annual benefit to the
Executive's beneficiary in 12 equal monthly installments commencing with the
month following the Executive's death, paying the annual benefit to the
Executive's beneficiary for a period of 20 years.

        3.2 Death During Payment Period. If the Executive dies after any Benefit
payments have commenced under this Agreement but before receiving all such
payments, the Bank shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.

        3.3 Death After Termination of Employment But Before Payment Commences.
If the Executive is entitled to a Benefit under this Agreement, but dies prior
to the commencement of said benefit payments, the Bank shall pay the same
benefit payments to the Executive's beneficiary that the Executive was entitled
to prior to death except that the benefit payments shall commence on the first
day of the month following the date of the Executive's death.

SECTION 4 - Beneficiaries

        4.1 Beneficiary Designations. The Executive shall designate a
beneficiary by filing a written designation with the Bank. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
received by the Bank during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.

                                     Page 5
<PAGE>

        4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Bank may require proof of incompetence, minority
or guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Bank from all liability with
respect to such benefit.

SECTION 5 - Certain Limitations

        5.1 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the Bank shall not pay any benefit under this
Agreement if the Bank terminates the Executive's employment for: (i) gross
negligence or gross neglect of duties; (ii) commission of a felony or of a gross
misdemeanor involving moral turpitude; or (iii) fraud, disloyalty, dishonesty or
willful violation of any law or significant Bank policy committed in connection
with the Executive's employment and resulting in an adverse effect on the Bank
or the Holding Company.

        5.2 Suicide or Misstatement. The Bank shall not pay any benefit under
this Agreement if the Executive commits suicide within three years after the
date of this Agreement. In addition, the Bank shall not pay any benefit under
this Agreement if the Executive has made any material misstatement of fact on an
employment application or resume provided to the Bank, or on any application for
any benefits provided by the Bank to the Executive.

SECTION 6 - Claims and Review Procedures

        6.1 Claims Procedure. A Participant or beneficiary ("claimant") who has
not received benefits under the Plan that he or she believes should be paid
shall make a claim for such benefits as follows:

        (1) Initiation - Written Claim. The claimant initiates a claim by
submitting to the Bank a written claim for the benefits.

        (2) Timing of Bank Response. The Bank shall respond to such claimant
within 90 days after receiving the claim. If the Bank determines that special
circumstances require additional time for processing the claim, the Bank can
extend the response period by an additional 90 days by notifying the claimant in
writing, prior to the end of the initial 90-day period, that an additional
period is required. The notice of extension must set forth the special
circumstances and the date by which the Bank expects to render its decision.

        (3) Notice of Decision. If the Bank denies part or all of the claim, the
Bank shall notify the claimant in writing of such denial. The Bank shall write
the notification in a manner calculated to be understood by the claimant. The
notification shall set forth:

                                     Page 6
<PAGE>

(i) the specific reasons for the denial; (ii) a reference to the specific
provisions of the Plan on which the denial is based; (iii) a description of any
additional information or material necessary for the claimant to perfect the
claim and an explanation of why it is needed; (iv) an explanation of the Plan's
review procedures and the time limits applicable to such procedures, and (v) a
statement of the claimant's right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

        6.2 Review Procedure. If the Bank denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Bank of
the denial, as follows:

        (1) Initiation - Written Request. To initiate the review, the claimant,
within 60 days after receiving the Bank's notice of denial, must file with the
Bank a written request for review.

        (2) Additional Submissions - Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and other
information relating to the claim. The Bank shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant's claim for benefits.

        (3) Considerations on Review. In considering the review, the Bank shall
take into account all materials and information the claimant submits relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.

        (4) Timing of Bank Response. The Bank shall respond in writing to such
claimant within 60 days after receiving the request for review. If the Bank
determines that special circumstances require additional time for processing the
claim, the Bank can extend the response period by an additional 60 days by
notifying the claimant in writing, prior to the end of the initial 60-day
period, that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Bank expects to render
its decision.

        (5) Notice of Decision. The Bank shall notify the claimant in writing of
its decision on review. The Bank shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth:
(i) the specific reasons for the denial; (ii) a reference to the specific
provisions of the Plan on which the denial is based; (iii) a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the claimant's claim for
benefits, and (iv) a statement of the claimant's right to bring a civil action
under ERISA Section 502(a).

SECTION 7 - Amendments and Termination

                                     Page 7
<PAGE>

        7.1 This Agreement may be amended or terminated only by a written
agreement signed by the Bank and the Executive.

        7.2 Notwithstanding Section 7.1, the Bank may amend or terminate this
Agreement at any time if, pursuant to legislative, judicial or regulatory
action, continuation of the Agreement would (i) cause benefits to be taxable to
the Executive prior to actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Bank or the
Holding Company, other than the financial impact of paying the benefits.

SECTION 8 - Status as an Unsecured General Creditor.

        8.1 Notwithstanding anything contained herein to the contrary: (i) the
Executive shall have no legal or equitable rights, interests or claims in or to
any specific property or assets of the Bank as a result of this Agreement; (ii)
none of the Bank's assets shall be held in or under any trust for the benefit of
the Executive or held in any way as security for the fulfillment of the
obligations of the Bank under this Agreement; (iii) all of the Bank's assets
shall be and remain the general unpledged and unrestricted assets of the Bank;
(iv) the Bank's obligation under this Agreement shall be that of an unfunded and
unsecured promise by the Bank to pay money in the future; and (v) the Executive
shall be an unsecured general creditor with respect to any benefits which may be
payable under the terms of this Agreement. Notwithstanding subparagraphs (i)
through (v) above, the Bank and the Executive acknowledge and agree that, in the
event of a Change in Control, upon request of the Executive, or in the Bank's
discretion if the Executive does not so request and the Bank nonetheless deems
it appropriate, the Bank shall establish, concurrent with this agreement, a
Rabbi Trust or multiple Rabbi Trusts (the "Trust" or "Trusts") upon such terms
and conditions as the Bank, in its sole discretion, deems appropriate and in
compliance with applicable provisions of the Code, in order to permit the Bank
to make contributions and/or transfer assets to the Trust or Trusts to discharge
its obligations pursuant to this Agreement. The principal of the Trust or Trusts
and any earnings thereon shall be held separate and apart from other funds of
the Bank to be used exclusively for discharge of the Bank's obligations pursuant
to this Agreement and shall continue to be subject to the claims of the Bank's
general creditors until paid to the Executive in such manner and at such times
as specified in this Agreement.

        8.2 Bank reserves the right to determine, in its sole and absolute
discretion, whether, to what extent and by what method, if any, to provide for
the payment of the amounts which may be payable to the Executive, under the
terms of this Agreement. In the event that the Bank elects to fund this
Agreement, in whole or in part, through the use of life insurance or annuities,
or both, the Bank shall determine the ownership and beneficial interests of any
such policy of life insurance or annuity. The Bank further reserves the right,
in its sole and absolute discretion, to terminate any such policy, and any other
devise used to fund its obligations under this Agreement, at any time, in whole
or in part. Consistent with Section 8.1 above, the Executive shall have no
right, title or

                                     Page 8
<PAGE>

interest in or to any funding source or amount utilized by the Bank pursuant to
this Agreement, and any such funding source or amount shall not constitute
security for the performance of the Bank's obligations pursuant to this
Agreement. In connection with the foregoing, the Executive agrees to execute
such documents and undergo such medical examinations or tests which the Bank may
request and which may be reasonably necessary to facilitate any funding for this
Agreement including, without limitation, the Bank's acquisition of any policy of
insurance or annuity.

        8.3 Notwithstanding any other provision of the Agreement, the Board of
Directors of the Bank or the Holding Company may, its sole and absolute
discretion: (i) accelerate the payment of the amounts due under the terms of
this Agreement, provided that the Executive consents to the revised payout terms
determined appropriate by the Board of Directors; (ii) modify other terms or
conditions of the Agreement, as the Board of Directors deems necessary or
appropriate, in response to changes in legislation, to rules, regulations or
rulings issued under the Internal Revenue Code, or to other similar events
having a substantial impact on the costs and benefits to the Bank of its
obligations under the Agreement, provided that the Executive shall receive a
substantially equivalent benefit in the event that a benefit existing under the
Agreement is canceled as a result of such modification.

SECTION 9 - Miscellaneous

        9.1 Binding Effect. This Agreement shall bind the Executive and the
Bank, and their beneficiaries, survivors, executors, successors, administrators
and transferees.

        9.2 No Guarantee of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Bank, nor does it interfere with the Bank's right to discharge
the Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.

        9.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner. In
particular, the Executive shall have no power or right to transfer, assign,
anticipate, hypothecate, modify or otherwise encumber any part or all of the
amounts payable hereunder, nor, prior to payment in accordance with the terms of
this Agreement, shall any portion of such amounts be: (i) subject to seizure by
any creditor of the Executive, by a proceeding at law or in equity, for the
payment of any debts, judgments, alimony or separate maintenance obligations
which may be owed by the Executive; or (ii) transferable by operation of law in
the event of bankruptcy, insolvency or otherwise. Any such attempted assignment
or transfer shall be void.

        9.4 Reorganization. This Agreement shall be binding upon and inure to
the benefit of the Executive and the Bank. Accordingly, the Bank shall not merge
or consolidate into or with another corporation, or reorganize or sell
substantially all of its

                                     Page 9
<PAGE>

assets to another corporation, firm or person, unless and until such succeeding
or continuing corporation, firm or person agrees to assume and discharge the
obligations of the Bank under this Agreement. In the alternative, the Holding
Company may agree to assume and discharge the obligation of the Bank under this
Agreement. Upon the occurrence of such event, the term "Bank" as used in this
Agreement shall be deemed to refer to such surviving or successor firm, person,
entity or corporation, or the Holding Company, as the case may be.

        9.5 Tax Withholding. The Bank shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.

        9.6 Applicable Law. The laws of the State of Oregon, other than those
laws denominated choice of law rules, federal law in the case of preemption, and
where applicable, the rules and regulations of any regulatory agency or
governmental authority having jurisdiction over the Bank or the Holding Company,
shall govern the validity, interpretation, construction and effect of this
Agreement.

        9.7 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Bank to which the Executive and beneficiary have no preferred or
secured claim.

        9.8 Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect thereto. Each party to this
Agreement acknowledges that no other representations, inducements, promises, or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not set forth herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding on either party. No rights are granted to the Executive by virtue of
this Agreement other than those specifically set forth herein.

        9.9 Administration. The Bank shall have powers which are necessary to
administer this Agreement, including but not limited to: (i) establishing and
revising the method of accounting for the Agreement; (ii) maintaining a record
of benefit payments; (iii) establishing rules and prescribing any forms
necessary or desirable to administer the Agreement; and (iv) interpreting the
provisions of the Agreement.

        9.10 Named Fiduciary. The Bank shall be the named fiduciary and plan
administrator under this Agreement. It may delegate to others certain aspects of
the management and operational responsibilities including the employment of
advisors and the delegation of ministerial duties to qualified individuals.

                                    Page 10
<PAGE>

        9.11 Paragraph Headings. The paragraph headings used in this Agreement
are for convenience only, and shall not affect or be used in connection with the
interpretation of this Agreement.

        9.12 No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.

        9.13 Opportunity To Consult With Independent Advisors. The Executive
acknowledges that he or she has been afforded the opportunity to consult with
independent advisors of his choosing including, without limitation, accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this Agreement and the (i) terms and conditions which may affect the
Executive's right to these benefits and (ii) personal tax effects of such
benefits including, without limitation, the effects of any federal or state
taxes, Section 280G of the Code, and any other taxes, costs, expenses or
liabilities whatsoever related to such benefits, which in any of the foregoing
instances the Executive acknowledges and agrees shall be the sole responsibility
of the Executive notwithstanding any other term or provision of this Agreement.
The Executive further acknowledges and agrees that the Bank shall have no
liability whatsoever related to any such personal tax effects or other personal
costs, expenses, or liabilities applicable to the Executive and further
specifically waives any right for himself or herself, and his or her heirs,
beneficiaries, legal representatives, agents, successor and assign to claim or
assert liability on the part of the Bank related to the matters described above
in this Section 9.13. The Executive further acknowledges that he or she has
read, understands and consents to all of the terms and conditions of this
Agreement, and that he or she enters into this Agreement with a full
understanding of its terms and conditions.

        9.14 Arbitration of Disputes. All claims, disputes and other matters in
question arising out of or relating to this Agreement or the breach or
interpretation thereof, other than those matters which are to be determined by
the Bank in its sole and absolute discretion, shall be resolved by binding
arbitration before a representative member, selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"),
located in Portland, Oregon. In the event JAMS is unable or unwilling to conduct
the arbitration provided for under the terms of this Paragraph, or has
discontinued its business, the parties agree that a representative member,
selected by the mutual agreement of the parties of the American Arbitration
Association ("AAA") located in Portland, Oregon, shall conduct the binding
arbitration referred to in this Paragraph. Notice of the demand for arbitration
shall be filed in writing with the other party to this Agreement and with JAMS
(or AAA, if necessary). In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claim, dispute or other matter in question would be barred by the applicable
statute of limitations. The arbitration shall be subject to such rules of
procedure used or established by JAMS, or if there are none, the rules of
procedure used or established by AAA. Any award rendered by JAMS or AAA shall be
final and binding

                                    Page 11
<PAGE>

upon the parties, and as applicable, their respective heirs, beneficiaries,
legal representatives, agents, successors and assigns, and may be entered in any
court having jurisdiction thereof. Any arbitration hereunder shall be conducted
in The Dalles, Oregon, unless otherwise agreed to by the parties.

        9.15 Attorneys' Fees. In the event of any arbitration or litigation
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys' fees and costs incurred in connection therewith
or in the enforcement or collection of any judgment or award rendered therein.
The "prevailing party" means the party determined by the arbitrator(s) or court,
as the case may be, to have most nearly prevailed, even if such party did not
prevail in all matters, not necessarily the one in whose favor a judgment is
rendered.

        9.16 Notice. Any notice required or permitted of either the Executive or
the Bank under this Agreement shall be deemed to have been duly given, if by
personal delivery, upon the date received by the party or its authorized
representative; if by facsimile, upon transmission to a telephone number
previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

        If to the Bank:                 Columbia River Bank
                                        420 East Third Street
                                        The Dalles, Oregon 97058

        If to the Executive:            c/o Columbia River Bank
                                        PO Box 1050
                                        The Dalles, Oregon 97058

        9.17. Nonwaiver. The failure of either party to enforce at any time or
for any period of time any one or more of the terms or conditions of this
Agreement shall not be a waiver of such term(s) or condition(s) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.

        9.18 Partial Invalidity. If any terms, provision, covenant, or condition
of this Agreement is determined by an arbitrator or a court, as the case may be,
to be invalid, void, or unenforceable, such determination shall not render any
other term, provision, covenant or condition invalid, void or unenforceable, and
the Agreement shall remain in full force and effect notwithstanding such partial
invalidity.

                                    Page 12
<PAGE>

        9.19 Modifications. Any modification of this Agreement shall be
effective only if it is in writing and signed by each party or such party's
authorized representative.

        IN WITNESS WHEREOF, the Executive and the Bank have signed this
Agreement.

COLUMBIA RIVER BANK

By:
   ____________________________________
     Chairman of the Board

_______________________________________
Executive

                                    Page 13
<PAGE>

                               COLUMBIA RIVER BANK
                     EXECUTIVE SALARY CONTINUATION AGREEMENT

                             BENEFICIARY DESIGNATION

Executive:___________________

        I designate the following as beneficiary of any death benefits under
this Agreement:

Primary:

_______________________________________________________________________________

_______________________________________________________________________________

Contingent:

_______________________________________________________________________________

_______________________________________________________________________________

        (Note: To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.)

        I understand that I may change these beneficiary designations by filing
a new written designation with the Bank. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me,
or, if I have named my spouse as beneficiary and our marriage is subsequently
dissolved.

Signature ___________________________________

Date_________________________________________

Received by the Bank this ______ day of ________________ , 200___ .

By __________________________________________

Title _______________________________________

                                    Page 14

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