Document:

<PAGE>
                                IMAX CORPORATION
                                  EXHIBIT 10.1

                                IMAX CORPORATION

                                STOCK OPTION PLAN

                                    JUNE 2000

<PAGE>

                                IMAX CORPORATION

                                STOCK OPTION PLAN

1.       PURPOSE

         The purposes of the IMAX Stock Option Plan (the "Plan") are to attract,
retain and motivate directors, officers, key employees and consultants of the
Company and its Subsidiaries and to provide to such persons incentives and
awards for superior performance.

2.       DEFINITIONS

         As used in this Plan the following terms have the following meanings:

         (a) "Agreement" has the meaning set forth in Section 6 below.

         (b) "Award" means an Option.

         (c) "Board" means the Board of Directors of the Company.

         (d) "Cause" means a termination of the Participant's employment with
the Company or one of its Subsidiaries (a) for "cause" as defined in an
employment agreement applicable to the Participant, or (b) in the case of a
Participant who does not have an employment agreement that defines "cause",
because of: (i) any act or omission that constitutes a material breach by the
participant of any of his obligations under his employment agreement with the
Company or one of its Subsidiaries or the applicable Agreement; (ii) the
continued failure or refusal of the Participant to substantially perform the
duties reasonably required of him as an employee of the Company or one of its
Subsidiaries; (iii) any wilful and material violation by the Participant of any
law or regulation applicable to the business of the Company or one of its
Subsidiaries, or the Participant's conviction of a felony, or any wilful
perpetration by the Participant of a common law fraud; or (iv) any other wilful
misconduct by the Participant which is materially injurious to the financial
condition or business reputation of, or is otherwise materially injurious to,
the Company or any of its Subsidiaries.

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

         (f) "Committee" means a committee of the Board comprised of at least
two directors selected by the Board to administer the Plan.

         (g) "Common Share" means a share of common stock, no par value, of the
Company.

         (h) "Company" means IMAX Corporation, a corporation organized under the
laws of Canada.

         (i) "Date of Grant" means the date specified by the Committee on which
an Award shall become effective (which date shall not be earlier than the date
on which the Committee takes action with respect thereto).

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                                      -2-

         (j) "Fair Market Value" of a Common Share on a given date means the
higher of the closing price of a Common Share on such date (or the most recent
trading date if such date is not a trading date) on the NASDAQ/National Market
System, The Toronto Stock Exchange and such national exchange, if any, as may be
designated by the Board.

         (k) "Option Price" means the purchase price per Common Share payable on
exercise of an Option, as determined by the Committee in its sole discretion
(subject to the terms of the Plan) and as set forth in the applicable Agreement.

         (l) "Option" means the right to purchase a Common Share upon exercise
of a stock option granted pursuant to the Plan.

         (m) "Participant" means a person to whom an Award is to be made under
the Plan and who is at the time of such Award an officer, employee or consultant
of the Company, or any of its Subsidiaries, or a person who is a director of the
Company or any of its Subsidiaries and who is not also an employee of the
Company or any of its Subsidiaries at the Date of Grant, or a person who has
agreed to commence serving in any such capacity within 90 days of the Date of
Grant, or any personal holding corporation controlled by any such person, the
shares of which are held directly or indirectly by such person or such person's
spouse, minor children or minor grandchildren, or any registered retirement
savings plan or registered educational savings plan for the sole benefit of any
such person.

         (n) "Permanent Disability" means a physical or mental disability or
infirmity of the Participant that prevents the normal performance of
substantially all his duties as an employee of the Company or any Subsidiary,
which disability or infirmity shall exist for any continuous period of 180 days
within any twelve-month period.

         (o) "Rule 16b-3" means Rule 16b-3 under the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder.

         (p) "Subsidiary" means any corporation or other entity in which the
Company owns or controls, directly or indirectly, not less than 50% of the total
combined voting power represented by all voting securities or other voting
interests in such entity.

         (q) "Vested Options" means, as of any date, Options which by their
terms are exercisable on such date.

3.       ADMINISTRATION OF THE PLAN

         (a) The Plan shall be administered, and Awards shall be granted
hereunder, by or under the authority of the Committee. A majority of the
Committee shall constitute a quorum, and the action of the members of the
Committee present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the acts of the Committee.

         (b) The interpretation and construction by the Committee of any
provision of the Plan or of any Agreement, and any determination by the
Committee pursuant to any provision of this Plan or of any Agreement shall be
final and conclusive. No member of the Committee shall be liable for any such
action or determination made in good faith.

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                                      -3-

4.       SHARES AVAILABLE UNDER PLAN

         The maximum number of Common Shares which may be issued upon the
exercise of Options granted under the Plan is 10,210,836 Shares, subject to
adjustment as provided in Paragraph 9. Such shares may be shares previously
issued or treasury shares or a combination of the foregoing. Any Common Shares
which are subject to Options which expire or which have been surrendered without
being exercised in full shall again be available for issuance under this Plan.

5.       OPTIONS

         The Committee may, from time to time and upon such terms and conditions
as it may determine, authorize the granting to Participants of Options provided,
however, that: (i) at no time shall the number of Common Shares reserved for
issuance to any one Participant under the Plan or any other share compensation
arrangement exceed 5% of the outstanding issue of Common Shares; (ii) at no time
shall the number of Common Shares reserved for issuance pursuant to stock
options granted to "insiders" (as that term is defined in Section 627 of The
Toronto Stock Exchange Company Manual) exceed 10% of the outstanding issue of
Common Shares; (iii) under no circumstances shall insiders be issued in excess
of 10% of the outstanding issue of Common shares within any one-year period
pursuant to the exercise of Options granted under the Plan or any other share
compensation arrangement; and (iv) under no circumstances shall any one insider
and that insider's associates be issued in excess of 5% of the outstanding issue
of Common Shares within any one-year period pursuant to the exercise of Options
granted under the Plan or any other share compensation arrangement.

6.       AGREEMENT

         The terms and conditions of each Option shall be embodied in a written
agreement (the "Agreement") in a form approved by the Committee which shall
contain terms and conditions not inconsistent with the Plan and which shall
incorporate the Plan by reference. Options granted under the Plan shall comply
with the following terms and conditions:

         (i) Each Agreement shall specify the number of Common Shares for which
Options have been granted.

         (ii) Each Agreement shall specify the Option Price, which shall not be
less than 100% of the Fair Market Value per Common Share on the Date of Grant.

         (iii) Each Agreement shall specify that the Option Price shall be
payable (a) in cash or by cheque acceptable to the Company, (b) by the transfer
to the Company of Common Shares having an aggregate Fair Market Value per Common
Share at the date of exercise equal to the aggregate Option Price or (c) by a
combination of such methods of payment.

         (iv) Successive grants may be made to the same Participant whether or
not any Options previously granted to such Participant remain unexercised.

         (v) Each Agreement shall specify the applicable vesting schedule and
the effective term of the Option. In the event of a termination of a
Participant's employment by reason of

<PAGE>

                                      -4-

death or Permanent Disability, 50% of such Participant's Options shall become
Vested Options if such Options were less than 50% vested at the time of such
termination.

         (vi) Options granted under the Plan are not intended to qualify as
"incentive stock options" within the meaning of Section 422A of the Code.

         (vii) No Option shall be exercisable more than ten years from the date
of Grant.

         (viii) Each Option granted under the Plan shall be subject to such
additional terms and conditions, not inconsistent with the Plan, which are
prescribed by the Committee and set forth in the applicable Agreement.

         (ix) As soon as practicable following the exercise of any Options, a
certificate evidencing the number of Common Shares issued in connection with
such exercise shall be issued in the name of the Participant or as the
Participant shall otherwise, in writing, direct.

7.       TERMINATION OF EMPLOYMENT, CONSULTING AGREEMENT OR TERM OF OFFICE

         (a) In the event that a Participant's employment, consulting
arrangement or term of office with the Company or one of its Subsidiaries
terminates for any reason, unless the Committee or the Board determines
otherwise, any Options which have not become Vested Options shall terminate and
be cancelled without any consideration being paid therefor.

         (b) In the event that a Participant's employment with the Company or
one of its Subsidiaries is terminated without Cause, or the Participant's
employment is terminated by reason of the Participant's voluntary resignation
(including by reason of retirement), death or Permanent Disability, or upon the
termination of a Participants' consulting arrangement or term of office, the
Participant (or the Participant's estate) shall be entitled to exercise the
Participant's Options which have become Vested Options as of the date of
termination for a period of 30 days, or such longer period as the Committee or
the Board determines, following the date of termination.

         (c) In the event that a Participant's employment, consulting
arrangement or term of office with the Company or one of its Subsidiaries is
terminated for Cause, such Participant's Vested Options shall terminate and be
cancelled without any consideration being paid therefor.

8.       TRANSFERABILITY

         No Option shall be transferable by a Participant other than by will or
the laws of descent and distribution, provided, however, that Options may be
transferred if approved by the Committee or the Board and by any regulatory
authority having jurisdiction or stock exchange on which the common shares
subject to Options are listed. Options shall be exercisable during the
Participant's lifetime only by the Participant or by the Participant's guardian
or legal representative.

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                                      -5-

9.       ADJUSTMENTS

         The Committee may make or provide for such adjustments in the maximum
number of Common Shares specified in Paragraph 4, in the number of Common Shares
covered by outstanding Options granted hereunder, and/or in the Option Price
applicable to such Options as the Committee in its sole discretion may determine
is equitably required to prevent dilution or enlargement of the rights of
Participants that otherwise would result from any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, merger, consolidation, spin-off, reorganization, partial or
complete liquidation, issuance of rights or warrants to purchase securities or
any other corporate transaction or event having an effect similar to any of the
foregoing.

10.      FRACTIONAL SHARES

         The Company shall not be required to issue any fractional Common Shares
pursuant to the Plan. The Committee may provide for the elimination of fractions
or for the settlement of fractions in cash.

11.      WITHHOLDING TAXES

         The Company and its Subsidiaries shall have the right to require any
individual entitled to receive Common Shares pursuant to an Option to remit to
the Company, prior to the delivery of any certificates evidencing such shares,
any amount sufficient to satisfy any Canadian or United States federal, state,
provincial or local tax withholding requirements. Prior to the Company's
determination of such withholding liability, such individual may make an
irrevocable election to satisfy, in whole or in part, such obligation to remit
taxes by directing the Company to withhold Common Shares that would otherwise be
received by such individual. Such election may be denied by the Committee in its
discretion, or may be made subject to certain conditions specified by the
Committee, including, without limitation, conditions intended to avoid the
imposition of liability against the individual under Section 16(b) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.

12.      REGISTRATION RESTRICTIONS

         An Option shall not be exercisable unless and until (i) a registration
statement under the Securities Act of 1933, as amended, has been duly filed and
declared effective pertaining to the Common Shares subject to such Option, such
Common Shares shall have been qualified under applicable state "blue sky" laws
and the Company has been a "reporting issuer" for purposes of the Ontario
Securities Act in good standing for not less than twelve months, or (ii) the
Committee, in its sole discretion determines that such registration,
qualification and status is not required as a result of the availability of an
exemption from such registration, qualification, and status under such laws.

<PAGE>

                                      -6-

13.      SHAREHOLDER RIGHTS

         A Participant shall have no rights as a shareholder with respect to any
Common Shares issuable upon exercise of an Option until a certificate or
certificates evidencing such shares shall have been issued to such Participant,
and no adjustment shall be made for dividends or distributions or other rights
in respect of any share for which the record date is prior to the date upon
which the Participant shall become the holder of record thereof.

14.      BREACH OF RESTRICTIVE COVENANTS

         If (i) a Participant is a party to an employment agreement with the
Company or any of its Subsidiaries or affiliates and (ii) such Participant
materially breaches any of the restrictive covenants set forth in such
employment agreement (including, without limitation, any restrictive covenants
relating to non-competition, non-solicitation or confidentiality), then all of
such Participant's Options (whether or not Vested Options) shall terminate and
be cancelled without consideration being paid therefor.

15.      AMENDMENTS, ETC.

         (a) The Board may at any time and from time to time alter, amend,
suspend or terminate the Plan in whole or in part, and the Committee may,
subject to applicable legal requirements at any time and from time to time waive
any provision of any Option or Agreement; provided, however, that no termination
or amendment of the Plan or any waiver of any provision of any Option or
Agreement may, without the consent of the Participant to whom any Award shall
previously have been granted, adversely affect the rights of such Participant in
such Award; provided further, however that amendments shall be subject to (x)
the approval of a majority of the Common Shares entitled to vote if the
Committee determines that such approval is necessary in order for the Company to
rely on the exemptive relief provided under Rule 16b-3 and (y) all other
approvals, whether regulatory, shareholder or otherwise, which are required by
law, The Toronto Stock Exchange or any other applicable securities exchange.

         (b) The Plan shall not confer upon a Participant any right with respect
to continuance of employment or other service with the Company or any
Subsidiary, nor will it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such Participant's employment or
other service at any time.

16.      EFFECTIVE DATE

         The Plan shall be effective as of June 7, 2000.

17.      GOVERNING LAW

         The Plan and all rights hereunder shall be construed in accordance with
and governed by the laws of the Province of Ontario and the laws of Canada
applicable therein.<PAGE>

                                                                    Exhibit 10.1

[BANK OF AMERICA LOGO]

                                 LOAN AGREEMENT

This Agreement dated as of June 28, 2004, is between Bank of America, N.A. (the
"Bank") and Cohu, Inc. (the "Borrower").

1.    FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS

1.1   Line of Credit Amount.

(a)   During the availability period described below, the Bank will provide a
      line of credit to the Borrower. The amount of the line of credit (the
      "Facility No. 1 Commitment") is Five Million and 00/100 Dollars
      ($5,000,000.00).

(b)   This is a revolving line of credit. During the availability period, the
      Borrower may repay principal amounts and reborrow them.

(c)   The Borrower agrees not to permit the principal balance outstanding to
      exceed the Facility No. 1 Commitment. If the Borrower exceeds this limit,
      the Borrower will immediately pay the excess to the Bank upon the Bank's
      demand.

1.2   Availability Period. The line of credit is available between the date of
this Agreement and July 1, 2005, or such earlier date as the availability may
terminate as provided in this Agreement (the "Facility No. 1 Expiration Date").

1.3   Repayment Terms.

(a)   The Borrower will pay interest on July 1, 2004, and then on the same day
      of each month thereafter until payment in full of any principal
      outstanding under this facility.

(b)   The Borrower will repay in full any principal, interest or other charges
      outstanding under this facility no later than the Facility No. 1
      Expiration Date.

1.4   Interest Rate.

(a)   The interest rate is a rate per year equal to the Bank's Prime Rate.

(b)   The Prime Rate is the rate of interest publicly announced from time to
      time by the Bank as its Prime Rate. The Prime Rate is set by the Bank
      based on various factors, including the Bank's costs and desired return,
      general economic conditions and other factors, and is used as a reference
      point for pricing some loans. The Bank may price loans to its customers
      at, above, or below the Prime Rate. Any change in the Prime Rate shall
      take effect at the opening of business on the day specified in the public
      announcement of a change in the Bank's Prime Rate.

1.5   Letters of Credit.

(a)   During the availability period, at the request of the Borrower, the Bank
      will issue:

      (i)   commercial letters of credit with a maximum maturity of one hundred
            eighty (180) days but not to extend more than one hundred eighty
            (180) days beyond the Facility No. 1 Expiration Date. Each
            commercial letter of credit will require drafts payable at sight.

      (ii)  standby letters of credit with a maximum maturity of three hundred
            sixty-five (365) days but not to extend more than three hundred
            sixty-five (365) days beyond the Facility No. 1 Expiration Date.

(b)   In calculating the principal amount outstanding under the Facility No. 1
      Commitment, the calculation shall include the amount of any letters of
      credit outstanding, including amounts drawn on any letters of credit and
      not yet reimbursed.

Standard Loan Agreement v.6

                                       1
<PAGE>

(c)   The following letters of credit are outstanding from the Bank for the
      account of the Borrower:

<TABLE>
<CAPTION>
Letter of Credit Number            Amount
-----------------------            ------
<S>                             <C>
     3055074                    $1,690,055.80
     3055075                    $  845,027.90
</TABLE>

As of the date of this Agreement, these letters of credit shall be deemed to be
outstanding under this Agreement, and shall be subject to all the terms and
conditions stated in this Agreement.

(e)   The Borrower agrees:

      (i)   Any sum drawn under a letter of credit may, at the option of the
            Bank, be added to the principal amount outstanding under this
            Agreement. The amount will bear interest and be due as described
            elsewhere in this Agreement.

      (ii)  If there is a default under this Agreement, to immediately prepay
            and make the Bank whole for any outstanding letters of credit.

      (iii) The issuance of any letter of credit and any amendment to a letter
            of credit is subject to the Bank's written approval and must be in
            form and content satisfactory to the Bank and in favor of a
            beneficiary acceptable to the Bank.

      (iv)  To sign the Bank's form Application and Agreement for Commercial
            Letter of Credit or Application and Agreement for Standby Letter of
            Credit, as applicable.

      (v)   To pay any issuance and/or other fees that the Bank notifies the
            Borrower will be charged for issuing and processing letters of
            credit for the Borrower.

      (vi)  To allow the Bank to automatically charge its checking account for
            applicable fees, discounts, and other charges.

2.    FEES AND EXPENSES

2.1   Fees.

(a)   Unused Commitment Fee. The Borrower agrees to pay a fee on any difference
      between the Facility No. 1 Commitment and the amount of credit it actually
      uses, determined by the average of the daily amount of credit outstanding
      during the specified period. The fee will be calculated at 0.125% per
      year. The calculation of credit outstanding shall not include the undrawn
      amount of letters of credit.

      This fee is due on June 30, 2004, payable on the 10th day of the following
      month, and on the same day of each following quarter until the expiration
      of the availability period.

2.2   Expenses. The Borrower agrees to immediately repay the Bank for expenses
that include, but are not limited to, filing, recording and search fees,
appraisal fees, title report fees, and documentation fees.

2.3   Reimbursement Costs.

(a)   The Borrower agrees to reimburse the Bank for any expenses it incurs in
      the preparation of this Agreement and any agreement or instrument required
      by this Agreement. Expenses include, but are not limited to, reasonable
      attorneys' fees, including any allocated costs of the Bank's in-house
      counsel to the extent permitted by applicable law.

Standard Loan Agreement v.6

                                       2
<PAGE>

3.    DISBURSEMENTS, PAYMENTS AND COSTS

3.1   Disbursements and Payments.

(a)   Each payment by the Borrower will be made in U.S. Dollars and immediately
      available funds by direct debit to a deposit account as specified below
      or, for payments not required to be made by direct debit, by mail to the
      address shown on the Borrower's statement or at one of the Bank's banking
      centers in the United States.

(b)   Each disbursement by the Bank and each payment by the Borrower will be
      evidenced by records kept by the Bank. In addition, the Bank may, at its
      discretion, require the Borrower to sign one or more promissory notes.

3.2   Telephone and Telefax Authorization.

(a)   The Bank may honor telephone or telefax instructions for advances or
      repayments and telefax requests for the issuance of letters of credit
      given, or purported to be given, by any one of the individuals authorized
      to sign loan agreements on behalf of the Borrower, or any other individual
      designated by any one of such authorized signers.

(b)   Advances will be deposited in and repayments will be withdrawn from
      account number 14505-50312 owned by the Borrower or such other of the
      Borrower's accounts with the Bank as designated in writing by the
      Borrower.

(c)   The Borrower will indemnify and hold the Bank harmless from all liability,
      loss, and costs in connection with any act resulting from telephone or
      telefax instructions the Bank reasonably believes are made by any
      individual authorized by the Borrower to give such instructions. This
      paragraph will survive this Agreement's termination, and will benefit the
      Bank and its officers, employees, and agents.

3.3   Direct Debit (Pre-Billing).

(a)   The Borrower agrees that the Bank will debit deposit account number
      14505-50312 owned by the Borrower or such other of the Borrower's accounts
      with the Bank as designated in writing by the Borrower (the "Designated
      Account") on the date each payment of principal and interest and any fees
      from the Borrower becomes due (the "Due Date").

(b)   Prior to each Due Date, the Bank will mail to the Borrower a statement of
      the amounts that will be due on that Due Date (the "Billed Amount"). The
      bill will be mailed a specified number of calendar days prior to the Due
      Date, which number of days will be mutually agreed from time to time by
      the Bank and the Borrower. The calculations in the bill will be made on
      the assumption that no new extensions of credit or payments will be made
      between the date of the billing statement and the Due Date, and that there
      will be no changes in the applicable interest rate.

(c)   The Bank will debit the Designated Account for the Billed Amount,
      regardless of the actual amount due on that date (the "Accrued Amount").
      If the Billed Amount debited to the Designated Account differs from the
      Accrued Amount, the discrepancy will be treated as follows:

      (i)   If the Billed Amount is less than the Accrued Amount, the Billed
            Amount for the following Due Date will be increased by the amount of
            the discrepancy. The Borrower will not be in default by reason of
            any such discrepancy.

      (ii)  If the Billed Amount is more than the Accrued Amount, the Billed
            Amount for the following Due Date will be decreased by the amount of
            the discrepancy.

      Regardless of any such discrepancy, interest will continue to accrue based
      on the actual amount of principal outstanding without compounding. The
      Bank will not pay the Borrower interest on any overpayment.

(d)   The Borrower will maintain sufficient funds in the Designated Account to
      cover each debit. If there are insufficient funds in the Designated
      Account on the date the Bank enters any debit authorized by this
      Agreement, the Bank may reverse the debit.

(e)   The Borrower may terminate this direct debit arrangement at any time by
      sending written notice to the Bank at the address specified at the end of
      this Agreement. If the Borrower terminates this arrangement, then the
      principal amount outstanding under this Agreement will at the option of
      the Bank bear interest at a rate per annum which is 0.5 percentage
      point(s) higher than the rate of interest otherwise provided under this
      Agreement.

Standard Loan Agreement v.6

                                       3
<PAGE>

3.4   Banking Days. Unless otherwise provided in this Agreement, a banking day
is a day other than a Saturday, Sunday or other day on which commercial banks
are authorized to close, or are in fact closed, in the state where the Bank's
lending office is located, and, if such day relates to amounts bearing interest
at an offshore rate (if any), means any such day on which dealings in dollar
deposits are conducted among banks in the offshore dollar interbank market. All
payments and disbursements which would be due on a day which is not a banking
day will be due on the next banking day. All payments received on a day which is
not a banking day will be applied to the credit on the next banking day.

3.5   Interest Calculation. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day year and
the actual number of days elapsed. This results in more interest or a higher fee
than if a 365-day year is used. Installments of principal which are not paid
when due under this Agreement shall continue to bear interest until paid.

3.6   Default Rate. Upon the occurrence of any default under this Agreement, all
amounts outstanding under this Agreement, including any interest, fees, or costs
which are not paid when due, will at the option of the Bank bear interest at a
rate which is 2.0 percentage point(s) higher than the rate of interest otherwise
provided under this Agreement. This may result in compounding of interest. This
will not constitute a waiver of any default.

3.7   Interest Compounding. At the Bank's sole option in each instance, any
interest, fees, or costs which are not paid when due under this Agreement shall
bear interest from the due date at the Bank's Prime Rate plus 1.0 percentage
point(s). This may result in compounding of interest.

4.    CONDITIONS

Before the Bank is required to extend any credit to the Borrower under this
Agreement, it must receive any documents and other items it may reasonably
require, in form and content acceptable to the Bank, including any items
specifically listed below.

4.1   Authorizations. If the Borrower or any guarantor is anything other than a
natural person, evidence that the execution, delivery and performance by the
Borrower and/or such guarantor of this Agreement and any instrument or agreement
required under this Agreement have been duly authorized.

4.2   Governing Documents. If required by the Bank, a copy of the Borrower's
organizational documents.

4.3   Payment of Fees. Payment of all fees and other amounts due and owing to
the Bank, including without limitation payment of all accrued and unpaid
expenses incurred by the Bank as required by the paragraph entitled
"Reimbursement Costs."

4.4   Good Standing. Certificates of good standing for the Borrower from its
state of formation and from any other state in which the Borrower is required to
qualify to conduct its business.

5.    REPRESENTATIONS AND WARRANTIES

When the Borrower signs this Agreement, and until the Bank is repaid in full,
the Borrower makes the following representations and warranties. Each request
for an extension of credit constitutes a renewal of these representations and
warranties as of the date of the request:

5.1   Formation. If the Borrower is anything other than a natural person, it is
duly formed and existing under the laws of the state or other jurisdiction where
organized.

5.2   Authorization. This Agreement, and any instrument or agreement required
hereunder, are within the Borrower's powers, have been duly authorized, and do
not conflict with any of its organizational papers.

5.3   Enforceable Agreement. This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable.

5.4   Good Standing. In each state in which the Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes.

Standard Loan Agreement v.6

                                       4
<PAGE>

5.5   No Conflicts. This Agreement does not conflict with any law, agreement, or
obligation by which the Borrower is bound.

5.6   Financial Information. All financial and other information that has been
or will be supplied to the Bank is sufficiently complete to give the Bank
accurate knowledge of the Borrower's (and any guarantor's) financial condition,
including all material contingent liabilities. Since the date of the most recent
financial statement provided to the Bank, there has been no material adverse
change in the business condition (financial or otherwise), operations,
properties or prospects of the Borrower (or any guarantor). If the Borrower is
comprised of the trustees of a trust, the foregoing representations shall also
pertain to the trustor(s) of the trust.

5.7   Lawsuits. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower which, if lost, would impair the Borrower's
financial condition or ability to repay the loan, except as have been disclosed
in writing to the Bank.

5.8   Permits, Franchises. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade name
rights, patent rights, copyrights and fictitious name rights necessary to enable
it to conduct the business in which it is now engaged.

5.9   Other Obligations. The Borrower is not in default on any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation, except as have been disclosed in
writing to the Bank.

5.10  Tax Matters. The Borrower has no knowledge of any pending assessments or
adjustments of its income tax for any year and all taxes due have been paid,
except as have been disclosed in writing to the Bank.

5.11  No Event of Default. There is no event which is, or with notice or lapse
of time or both would be, a default under this Agreement.

5.12  Insurance. The Borrower has obtained, and maintained in effect, the
insurance coverage required in the "Covenants" section of this Agreement.

6.    COVENANTS

The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:

6.1   Use of Proceeds.

(a)   To use the proceeds of Facility No. 1 only for working capital.

6.2   Financial Information. To provide the following financial information and
statements in form and content acceptable to the Bank, and such additional
information as requested by the Bank from time to time:

(a)   Within ninety (90) days of the fiscal year end, the annual financial
      statements of the Borrower. These financial statements must be audited
      (with an opinion satisfactory to the Bank) by a Certified Public
      Accountant acceptable to the Bank. The statements shall be prepared on a
      consolidated basis.

(b)   Within forty-five (45) days of the period's end (including the last period
      in each fiscal year), quarterly financial statements of the Borrower,
      certified and dated by an authorized financial officer. These financial
      statements may be company-prepared. The statements shall be prepared on a
      consolidated basis.

(c)   Copies of the Form 10-K Annual Report and Form 10-Q Quarterly Report for
      the Borrower concurrent with the date of filing with the Securities and
      Exchange Commission.

6.3   Tangible Net Worth. To maintain on a consolidated basis Tangible Net Worth
equal to at least One Hundred Sixty Million Dollars ($160,000,000).

"Tangible Net Worth" means the value of total assets (including leaseholds and
leasehold improvements and reserves against assets but excluding goodwill,
patents, trademarks, trade names, organization expense, unamortized debt
discount and expense, capitalized or deferred research and development costs,
deferred marketing expenses, and other like intangibles, and monies due from
affiliates, officers, directors, employees, shareholders, members or managers)
less

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<PAGE>

total liabilities, including but not limited to accrued and deferred income
taxes, but excluding the non-current portion of Subordinated Liabilities.

"Subordinated Liabilities" means liabilities subordinated to the Borrower's
obligations to the Bank in a manner acceptable to the Bank in its sole
discretion.

6.4   Unencumbered Liquid Assets. To hold on a consolidated basis Unencumbered
Liquid Assets having an aggregate market value of not less than Fifty Million
Dollars ($50,000,0000).

For the purposes of this Agreement, "Unencumbered Liquid Assets" shall mean the
following assets owned by the Borrower (excluding assets of any retirement plan)
which (i) are not the subject of any lien, pledge, security interest or other
arrangement with any creditor to have its claim satisfied out of the assets (or
proceeds thereof) prior to the general creditors of the Borrower, and (ii) may
be converted to cash within five (5) days: (a) Cash or cash equivalents held in
the United States; (b) United States Treasury or governmental agency obligations
which constitute full faith and credit of the United States of America; (c)
Commercial paper rated P-1 or A1 by Moody's or S&P, respectively; (d) Medium and
long-term securities rated investment grade by one of the rating agencies
described in (c) above; (e) Eligible Stocks ; (f) Mutual funds quoted in The
Wall Street Journal which invest primarily in the assets described in (a) - (e)
above. For purposes of this Agreement, "Eligible Stocks" means any common or
preferred stock which (i) is not subject to statutory or contractual
restrictions on sales, (ii) is traded on a U.S. national stock exchange or
included in the National Market tier of NASDAQ and (iii) has, as of the close of
trading on the applicable exchange (excluding after hours trading), a per share
price of at least $15.

6.5   Limitation On Losses. Not to incur on a consolidated basis a net loss
before taxes and extraordinary items in excess of Seven Million Five Hundred
Thousand Dollars ($7,500,000) in any annual accounting period.

6.6   Capital Expenditures. Not to spend or incur obligations (including the
total amount of any capital leases) to acquire fixed assets for more than Seven
Million Five Hundred Thousand Dollars ($7,500,000) in any single fiscal year.

6.7   Other Debts. Not to have outstanding or incur any direct or contingent
liabilities or lease obligations (other than those to the Bank), or become
liable for the liabilities of others, without the Bank's written consent. This
does not prohibit:

(a)   Acquiring goods, supplies, or merchandise on normal trade credit.

(b)   Endorsing negotiable instruments received in the usual course of business.

(c)   Obtaining surety bonds in the usual course of business.

(d)   Liabilities, lines of credit and leases in existence on the date of this
      Agreement disclosed in writing to the Bank.

(e)   Additional debts and lease obligations for business purposes which do not
      exceed a total principal amount of One Million Dollars ($1,000,000)
      outstanding at any one time.

6.8   Other Liens. Not to create, assume, or allow any security interest or lien
(including judicial liens) on property the Borrower now or later owns, except:

(a)   Liens and security interests in favor of the Bank.

(b)   Liens for taxes not yet due.

(c)   Liens outstanding on the date of this Agreement disclosed in writing to
      the Bank.

(d)   Additional purchase money security interests in assets acquired after the
      date of this Agreement, if the total principal amount of debts secured by
      such liens does not exceed One Million Dollars ($1,000,000) at any one
      time.

6.9   Maintenance of Assets.

(a)   Not to sell, assign, lease, transfer or otherwise dispose of any part of
      the Borrower's business or the Borrower's assets except in the ordinary
      course of the Borrower's business.

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                                       6
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(b)   Not to sell, assign, lease, transfer or otherwise dispose of any assets
      for less than fair market value, or enter into any agreement to do so.

(c)   Not to enter into any sale and leaseback agreement covering any of its
      fixed assets.

(d)   To maintain and preserve all rights, privileges, and franchises the
      Borrower now has.

(e)   To make any repairs, renewals, or replacements to keep the Borrower's
      properties in good working condition.

6.10  Additional Negative Covenants. Not to, without the Bank's written consent:

(a)   Enter into any consolidation, merger, or other combination, or become a
      partner in a partnership, a member of a joint venture, or a member of a
      limited liability company.

(b)   Acquire or purchase a business or its assets for a consideration,
      including assumption of direct or contingent debt, in excess of Twenty
      Million Dollars ($20,000,000) in the aggregate.

(c)   Engage in any business activities substantially different from the
      Borrower's present business.

(d)   Liquidate or dissolve the Borrower's business.

(e)   Voluntarily suspend the Borrower's business for more than five (5) days in
      any 30-day period.

6.11  Bank as Principal Depository. To maintain the Bank as its principal
depository bank, including for the maintenance of business, cash management,
operating and administrative deposit accounts.

6.12  Notices to Bank. To promptly notify the Bank in writing of:

(a)   Any lawsuit over Five Million and 00/100 Dollars ($5,000,000.00) against
      the Borrower (or any guarantor or, if the Borrower is comprised of the
      trustees of a trust, any trustor).

(b)   Any substantial dispute between any governmental authority and the
      Borrower (or any guarantor or, if the Borrower is comprised of the
      trustees of a trust, any trustor).

(c)   Any event of default under this Agreement, or any event which, with notice
      or lapse of time or both, would constitute an event of default.

(d)   Any material adverse change in the Borrower's (or any guarantor's, or, if
      the Borrower is comprised of the trustees of a trust, any trustor's)
      business condition (financial or otherwise), operations, properties or
      prospects, or ability to repay the credit.

(e)   Any change in the Borrower's name, legal structure, place of business, or
      chief executive office if the Borrower has more than one place of
      business.

(f)   Any actual contingent liabilities of the Borrower (or any guarantor or, if
      the Borrower is comprised of the trustees of a trust, any trustor), and
      any such contingent liabilities which are reasonably foreseeable, where
      such liabilities are in excess of One Million and 00/100 Dollars
      ($1,000,000.00) in the aggregate.

6.13  Insurance.

(a)   General Business Insurance. To maintain insurance as is usual for the
      business it is in.

6.14  Compliance with Laws. To comply with the laws (including any fictitious or
trade name statute), regulations, and orders of any government body with
authority over the Borrower's business.

6.15  ERISA Plans. Promptly during each year, to pay and cause any subsidiaries
to pay contributions adequate to meet at least the minimum funding standards
under ERISA with respect to each and every Plan; file each annual report
required to be filed pursuant to ERISA in connection with each Plan for each
year; and notify the Bank within ten (10) days of the occurrence of any
Reportable Event that might constitute grounds for termination of any capital
Plan by the Pension Benefit Guaranty Corporation or for the appointment by the
appropriate United States District Court of a trustee to

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                                       7
<PAGE>

administer any Plan. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time. Capitalized terms in this paragraph shall
have the meanings defined within ERISA.

6.16  Books and Records. To maintain adequate books and records.

6.17  Audits. To allow the Bank and its agents to inspect the Borrower's
properties and examine, audit, and make copies of books and records at any
reasonable time. If any of the Borrower's properties, books or records are in
the possession of a third party, the Borrower authorizes that third party to
permit the Bank or its agents to have access to perform inspections or audits
and to respond to the Bank's requests for information concerning such
properties, books and records.

6.18  Cooperation. To take any action reasonably requested by the Bank to carry
out the intent of this Agreement.

7.    HAZARDOUS SUBSTANCES

7.1   Indemnity Regarding Hazardous Substances. The Borrower will indemnify and
hold harmless the Bank from any loss or liability the Bank incurs in connection
with or as a result of this Agreement, which directly or indirectly arises out
of the use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal or presence of a hazardous substance. This
indemnity will apply whether the hazardous substance is on, under or about the
Borrower's property or operations or property leased to the Borrower. The
indemnity includes but is not limited to attorneys' fees (including the
reasonable estimate of the allocated cost of in-house counsel and staff). The
indemnity extends to the Bank, its parent, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys and assigns.

7.2   Definition of Hazardous Substances. "Hazardous substances" means any
substance, material or waste that is or becomes designated or regulated as
"toxic," "hazardous," "pollutant," or "contaminant" or a similar designation or
regulation under any federal, state or local law (whether under common law,
statute, regulation or otherwise) or judicial or administrative interpretation
of such, including without limitation petroleum or natural gas. This indemnity
will survive repayment of the Borrower's obligations to the Bank.

8.    DEFAULT AND REMEDIES

If any of the following events of default occurs, the Bank may do one or more of
the following: declare the Borrower in default, stop making any additional
credit available to the Borrower, and require the Borrower to repay its entire
debt immediately and without prior notice. If an event which, with notice or the
passage of time, will constitute an event of default has occurred and is
continuing, the Bank has no obligation to make advances or extend additional
credit under this Agreement. In addition, if any event of default occurs, the
Bank shall have all rights, powers and remedies available under any instruments
and agreements required by or executed in connection with this Agreement, as
well as all rights and remedies available at law or in equity. If an event of
default occurs under the paragraph entitled "Bankruptcy," below, with respect to
the Borrower, then the entire debt outstanding under this Agreement will
automatically be due immediately.

8.1   Failure to Pay. The Borrower fails to make a payment under this Agreement
when due.

8.2   Other Bank Agreements. Any default occurs under any other agreement the
Borrower (or any Obligor) or any of the Borrower's related entities or
affiliates has with the Bank or any affiliate of the Bank. For purposes of this
Agreement, "Obligor" shall mean any guarantor, any party pledging collateral to
the Bank, or, if the Borrower is comprised of the trustees of a trust, any
trustor.

8.3   Cross-default. Any default occurs under any agreement in connection with
any credit the Borrower (or any Obligor) or any of the Borrower's related
entities or affiliates has obtained from anyone else or which the Borrower (or
any Obligor) or any of the Borrower's related entities or affiliates has
guaranteed.

8.4   False Information. The Borrower or any Obligor has given the Bank false or
misleading information or representations.

8.5   Bankruptcy. The Borrower, any Obligor, or any general partner of the
Borrower or of any Obligor files a bankruptcy petition, a bankruptcy petition is
filed against any of the foregoing parties, or the Borrower, any Obligor, or any
general partner of the Borrower or of any Obligor makes a general assignment for
the benefit of creditors.

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                                       8
<PAGE>

8.6   Receivers. A receiver or similar official is appointed for a substantial
portion of the Borrower's or any Obligor's business, or the business is
terminated, or, if any Obligor is anything other than a natural person, such
Obligor is liquidated or dissolved.

8.7   Judgments. Any judgments or arbitration awards are entered against the
Borrower or any Obligor, or the Borrower or any Obligor enters into any
settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of Two Million and 00/100 Dollars ($2,000,000.00) or more in
excess of any insurance coverage.

8.8   Material Adverse Change. A material adverse change occurs, or is
reasonably likely to occur, in the Borrower's (or any Obligor's) business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the credit.

8.9   Government Action. Any government authority takes action that the Bank
believes materially adversely affects the Borrower's or any Obligor's financial
condition or ability to repay.

8.10  Default under Related Documents. Any default occurs under any guaranty,
subordination agreement, security agreement, deed of trust, mortgage, or other
document required by or delivered in connection with this Agreement or any such
document is no longer in effect, or any guarantor purports to revoke or disavow
the guaranty.

8.11  ERISA Plans. Any one or more of the following events occurs with respect
to a Plan of the Borrower subject to Title IV of ERISA, provided such event or
events could reasonably be expected, in the judgment of the Bank, to subject the
Borrower to any tax, penalty or liability (or any combination of the foregoing)
which, in the aggregate, could have a material adverse effect on the financial
condition of the Borrower:

(a)   A reportable event shall occur under Section 4043(c) of ERISA with respect
      to a Plan.

(b)   Any Plan termination (or commencement of proceedings to terminate a Plan)
      or the full or partial withdrawal from a Plan by the Borrower or any ERISA
      Affiliate.

8.12  Other Breach Under Agreement. A default occurs under any other term or
condition of this Agreement not specifically referred to in this Article. This
includes any failure or anticipated failure by the Borrower (or any other party
named in the Covenants section) to comply with the financial covenants set forth
in this Agreement, whether such failure is evidenced by financial statements
delivered to the Bank or is otherwise known to the Borrower or the Bank.

9.    ENFORCING THIS AGREEMENT; MISCELLANEOUS

9.1   GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.

9.2   California Law. This Agreement is governed by California state law.

9.3   Successors and Assigns. This Agreement is binding on the Borrower's and
the Bank's successors and assignees. The Borrower agrees that it may not assign
this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrower with actual or potential participants or assignees. If a
participation is sold or the loan is assigned, the purchaser will have the right
of set-off against the Borrower.

9.4   Arbitration and Waiver of Jury Trial

(a)   This paragraph concerns the resolution of any controversies or claims
      between the parties, whether arising in contract, tort or by statute,
      including but not limited to controversies or claims that arise out of or
      relate to: (i) this agreement (including any renewals, extensions or
      modifications); or (ii) any document related to this agreement
      (collectively a "Claim"). For the purposes of this arbitration provision
      only, the term "parties" shall include any parent corporation, subsidiary
      or affiliate of the Bank involved in the servicing, management or
      administration of any obligation described or evidenced by this agreement.

(b)   At the request of any party to this agreement, any Claim shall be resolved
      by binding arbitration in accordance with the Federal Arbitration Act
      (Title 9, U. S. Code) (the "Act"). The Act will apply even though this
      agreement provides that it is governed by the law of a specified state.

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(c)   Arbitration proceedings will be determined in accordance with the Act, the
      applicable rules and procedures for the arbitration of disputes of JAMS or
      any successor thereof ("JAMS"), and the terms of this paragraph. In the
      event of any inconsistency, the terms of this paragraph shall control.

(d)   The arbitration shall be administered by JAMS and conducted, unless
      otherwise required by law, in any U. S. state where real or tangible
      personal property collateral for this credit is located or if there is no
      such collateral, in the state specified in the governing law section of
      this agreement. All Claims shall be determined by one arbitrator; however,
      if Claims exceed Five Million Dollars ($5,000,000), upon the request of
      any party, the Claims shall be decided by three arbitrators. All
      arbitration hearings shall commence within ninety (90) days of the demand
      for arbitration and close within ninety (90) days of commencement and the
      award of the arbitrator(s) shall be issued within thirty (30) days of the
      close of the hearing. However, the arbitrator(s), upon a showing of good
      cause, may extend the commencement of the hearing for up to an additional
      sixty (60) days. The arbitrator(s) shall provide a concise written
      statement of reasons for the award. The arbitration award may be submitted
      to any court having jurisdiction to be confirmed and enforced.

(e)   The arbitrator(s) will have the authority to decide whether any Claim is
      barred by the statute of limitations and, if so, to dismiss the
      arbitration on that basis. For purposes of the application of the statute
      of limitations, the service on JAMS under applicable JAMS rules of a
      notice of Claim is the equivalent of the filing of a lawsuit. Any dispute
      concerning this arbitration provision or whether a Claim is arbitrable
      shall be determined by the arbitrator(s). The arbitrator(s) shall have the
      power to award legal fees pursuant to the terms of this agreement.

(f)   This paragraph does not limit the right of any party to: (i) exercise
      self-help remedies, such as but not limited to, setoff; (ii) initiate
      judicial or non-judicial foreclosure against any real or personal property
      collateral; (iii) exercise any judicial or power of sale rights, or (iv)
      act in a court of law to obtain an interim remedy, such as but not limited
      to, injunctive relief, writ of possession or appointment of a receiver, or
      additional or supplementary remedies.

(g)   The procedure described above will not apply if the Claim, at the time of
      the proposed submission to arbitration, arises from or relates to an
      obligation to the Bank secured by real property. In this case, all of the
      parties to this agreement must consent to submission of the Claim to
      arbitration. If both parties do not consent to arbitration, the Claim will
      be resolved as follows: The parties will designate a referee (or a panel
      of referees) selected under the auspices of JAMS in the same manner as
      arbitrators are selected in JAMS administered proceedings. The designated
      referee(s) will be appointed by a court as provided in California Code of
      Civil Procedure Section 638 and the following related sections. The
      referee (or presiding referee of the panel) will be an active attorney or
      a retired judge. The award that results from the decision of the
      referee(s) will be entered as a judgment in the court that appointed the
      referee, in accordance with the provisions of California Code of Civil
      Procedure Sections 644 and 645.

(h)   The filing of a court action is not intended to constitute a waiver of the
      right of any party, including the suing party, thereafter to require
      submittal of the Claim to arbitration.

(i)   By agreeing to binding arbitration, the parties irrevocably and
      voluntarily waive any right they may have to a trial by jury in respect of
      any Claim. Furthermore, without intending in any way to limit this
      agreement to arbitrate, to the extent any Claim is not arbitrated, the
      parties irrevocably and voluntarily waive any right they may have to a
      trial by jury in respect of such Claim. This provision is a material
      inducement for the parties entering into this agreement.

9.5   Severability; Waivers. If any part of this Agreement is not enforceable,
the rest of the Agreement may be enforced. The Bank retains all rights, even if
it makes a loan after default. If the Bank waives a default, it may enforce a
later default. Any consent or waiver under this Agreement must be in writing.

9.6   Attorneys' Fees. The Borrower shall reimburse the Bank for any reasonable
costs and attorneys' fees incurred by the Bank in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and in
connection with any amendment, waiver, "workout" or restructuring under this
Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing
party is entitled to recover costs and reasonable attorneys' fees incurred in
connection with the lawsuit or arbitration proceeding, as determined by the
court or arbitrator. In the event that any case is commenced by or against the
Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar
or successor statute, the Bank is entitled to recover costs and reasonable
attorneys' fees incurred by the Bank related to the preservation, protection, or
enforcement of any rights of the Bank in such a case. As used in this paragraph,
"attorneys' fees" includes the allocated costs of the Bank's in-house counsel.

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                                       10
<PAGE>

9.7   One Agreement. This Agreement and any related security or other agreements
required by this Agreement, collectively:

(a)   represent the sum of the understandings and agreements between the Bank
      and the Borrower concerning this credit;

(b)   replace any prior oral or written agreements between the Bank and the
      Borrower concerning this credit; and

(c)   are intended by the Bank and the Borrower as the final, complete and
      exclusive statement of the terms agreed to by them.

In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail. Any reference in any
related document to a "promissory note" or a "note" executed by the Borrower and
dated as of the date of this Agreement shall be deemed to refer to this
Agreement, as now in effect or as hereafter amended, renewed, or restated.

9.8   Indemnification. The Borrower will indemnify and hold the Bank harmless
from any loss, liability, damages, judgments, and costs of any kind relating to
or arising directly or indirectly out of (a) this Agreement or any document
required hereunder, (b) any credit extended or committed by the Bank to the
Borrower hereunder, and (c) any litigation or proceeding related to or arising
out of this Agreement, any such document, or any such credit. This indemnity
includes but is not limited to attorneys' fees (including the allocated cost of
in-house counsel). This indemnity extends to the Bank, its parent, subsidiaries
and all of their directors, officers, employees, agents, successors, attorneys,
and assigns. This indemnity will survive repayment of the Borrower's obligations
to the Bank. All sums due to the Bank hereunder shall be obligations of the
Borrower, due and payable immediately without demand.

9.9   Notices. Unless otherwise provided in this Agreement or in another
agreement between the Bank and the Borrower, all notices required under this
Agreement shall be personally delivered or sent by first class mail, postage
prepaid, or by overnight courier, to the addresses on the signature page of this
Agreement, or sent by facsimile to the fax numbers listed on the signature page,
or to such other addresses as the Bank and the Borrower may specify from time to
time in writing. Notices and other communications shall be effective (i) if
mailed, upon the earlier of receipt or five (5) days after deposit in the U.S.
mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or
(iii) if hand-delivered, by courier or otherwise (including telegram, lettergram
or mailgram), when delivered.

9.10  Headings. Article and paragraph headings are for reference only and shall
not affect the interpretation or meaning of any provisions of this Agreement.

9.11  Counterparts. This Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate counterparts
each of which, when so executed, shall be deemed an original but all such
counterparts shall constitute but one and the same agreement.

9.12  Prior Agreement Superseded. This Agreement supersedes the Business Loan
Agreement entered into as of June 15, 1998, between the Bank and the Borrower,
and any credit outstanding thereunder shall be deemed to be outstanding under
this Agreement.

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                                       11
<PAGE>

This Agreement is executed as of the date stated at the top of the first page.

                               Bank:

Borrower:

                               Bank of America, N.A.

Cohu, Inc.

By: /s/ John H. Allen          By:  /s/ Gordon W. Wiens
----------------------------   ---------------------------------------------
(Sgd.) John H. Allen, CFO      (Sgd.) Gordon W. Wiens, Senior Vice President

Address where notices to the   Address where notices to the Bank are to be sent:
Borrower are to be sent:       San Diego Middle Market Banking Office #2704
                               CA0-103-15-25
12367 Crosthwaite Circle       450 B St.
Poway, CA 92064                San Diego, CA 92101

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                                       12

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