Sanwa
Bank
California

                     ACCOUNTS RECEIVABLE CREDIT AGREEMENT

This Accounts Receivable Credit Agreement ("Agreement") is made and entered into
this 19th day of April 1996 by and between SANWA BANK CALIFORNIA (the "Bank")
and ATG INC. (the "Borrower").

                                   SECTION I

                                  DEFINITIONS

1.01.  Certain Defined Terms. Unless elsewhere defined in this Agreement the
following terms shall have the following meanings (such meanings to be generally
applicable to the singular and plural forms of the terms defined):

       A.  "Account Debtor" shall mean the person or entity obligated to the
       Borrower upon an account.

       B.  "Advance" shall mean an advance to the Borrower under any line of
       credit facility or similar facility provided for in Section II of this
       Agreement which provides for draws by the Borrower against an established
       credit line.

       C.  "Borrowing Base" shall mean, as determined by the Bank from time to
       time, the lesser of: (i) 90% of the aggregate amount of Eligible Accounts
       of the Borrower; or (ii) $4,000,000.00.

       D.  "Business Day" shall mean a day, other than a Saturday or Sunday, on
       which commercial banks are open for business in California.

       E.  "Collateral" shall mean the property in which the Bank is granted a
       security interest pursuant to provisions of the section herein entitled
       "Collateral", together with any other personal or real property in which
       the Bank may be granted a lien or security interest to secure payment of
       the Obligations.

       F.  "Debt" shall mean all liabilities of the Borrower less Subordinated
       Debt.

       G.  "Effective Tangible Net Worth" shall mean the Borrower's stated net
       worth plus Subordinated Debt but less all intangible assets of the
       Borrower (i.e., goodwill, trademarks, patents, copyrights, organization
       expense and similar intangible items).

       H.  "Eligible Account" shall mean, at any time, the gross amount, less
       returns, discounts, credits or offsets of any nature, of the trade
       accounts owing to the Borrower by Account Debtors containing selling
       terms not exceeding 30 days but excluding the following:

           (i)    Accounts with respect to which the Account Debtor is an
           officer, employee or agent of the Borrower.

           (ii)   Accounts with respect to which goods are placed on
           consignment, guaranteed sale or other terms by reason of which the
           payment by the Account Debtor may be conditional.

           (iii)  Accounts with respect to which the Account Debtor is not a
           resident of the United States except to the extent such accounts are
           supported by adequate Eximbank insurance or other insurance
           acceptable to the Bank or by irrevocable letters of credit issued by
           banks satisfactory to the Bank.

           (iv)   Accounts with respect to which the Account Debtor is a
           subsidiary of, or affiliated with, the Borrower or its shareholders,
           officers or directors.

           (v)    Accounts with respect to which the Borrower is or may become
           liable to the Account Debtor for goods bold or services rendered by
           the Account Debtor to the Borrower.

           (vi)   That portion of the accounts of any single Account Debtor that
           exceeds 15% of all of the Borrower's accounts.

           (vii)  Accounts which have not been paid in full within 60 days from
           the date payment was due or 90 days from the original date of
           invoice, whichever is less.

           (viii) All accounts of any single Account Debtor if 25% or more of
           the dollar amount of all such accounts are represented by accounts
           which have not been paid in full within 60 days from the date payment
           was due or 90 days from the original date of invoice, whichever is
           less.

           (ix)   Accounts which are subject to dispute, counterclaim or setoff.

           (x)    Accounts with respect to which the goods have not been shipped
           or delivered, or the services have not been rendered, to the Account
           Debtor.

           (xi)   Accounts with respect to which the Bank, in its sole
           discretion, deems the creditworthiness or financial condition of the
           Account Debtor to be unsatisfactory.

           (xii)  Accounts of any Account Debtor who has filed or had filed
           against it a petition in bankruptcy, or an application for relief
           under any provision of any state or federal bankruptcy, insolvency or
           debtor-in-relief acts; or who has had appointed a trustee, custodian
           or receiver for the assets of such Account Debtor; or who has made an
           assignment for the benefit of creditors or has become insolvent or
           fails generally to pay its debts (including its payrolls) as such
           debts become due.

           (xiii) Accounts for which recoverable costs and accrued profit on
           progress completed have not been billed to the Account Debtor.

           (xiv)  Accounts with respect to which the Account Debtor is the
           United States or any department or agency thereof, except any such
           accounts which have been properly assigned to the Bank pursuant to
           the Assignment of Claims Act and for which the Bank is receiving
           payments under such accounts directly from the Account Debtor.

       I.  "Environmental Claims" shall mean all claims, however asserted, by
       any governmental authority or other person alleging potential liability
       or responsibility for violation of any Environmental Law or for release
       or injury to the environment or threat to public health, personal injury
       (including sickness, disease or death), property damage, natural
       resources damage, or otherwise alleging liability or responsibility for
       damages (punitive or otherwise), cleanup, removal, remedial or response
       costs, restitution, civil or criminal penalties, injunctive relief, or
       other type of relief, resulting from or based upon (i)
<PAGE>
 
       the presence, placement, discharge, emission or release (including
       intentional and unintentional, negligent and non-negligent, sudden or 
       non-sudden, accidental or non-accidental placement, spills, leaks,
       discharges, emissions or releases) of any Hazardous Materials at, in, or
       front property owned, operated or controlled by the Borrower, or (ii) any
       other circumstances forming the basis of any violation, or alleged
       violation, of any Environmental Law.

       J.  "Environmental Claim" shall mean all federal, state or local law,
       statutes, common law duties, rules, regulations, ordinances and codes,
       together with all administrative orders, directed duties, requests,
       licenses, authorizations and permits of, and agreements with, any
       governmental authorities, in each case relating to environmental, health,
       safety and land use matters; including the Comprehensive Environmental
       Response, Compensation and Liability Act of 1980 ("CERCLA") the Clean Air
       Act, the Federal Water Pollution Control Act of 1972, the Solid Waste
       Disposal Act, the Federal Resource Conservation and Recovery Act, the
       Toxic Substances Control Act, the Emergency Planning and Community Right-
       to-Know Act, the California Hazardous Waste Control Law, the California
       Solid Waste Management, Resource, Recovery and Recycling Act, the
       California Water Code and the California Health and Safety Code.

       K.  "ERISA" shall mean the Employee Retirement Income Security Act of
       1974, as amended from time to time, including (unless the content
       otherwise requires) any rules or regulations promulgated thereunder.

       L.  "Event of Default" shall have the meaning set fort in the section
       herein entitled "Events of Default".

       M.  "Hazardous Materials" shall mean, all those substances which are
       regulated by, or which may form the basis of liability under any
       Environmental Law, including all substances identified under any
       Environmental Law as a pollutant, contaminant, hazardous waste, hazardous
       constituent, special waste, hazardous substance, hazardous material, or
       toxic substance, or petroleum, or petroleum derived substance or waste.

       N.  "Indebtedness" shall mean, with respect to the Borrower, (i) all
       indebtedness for borrowed money or for the deferred purchase price of
       property or services in respect of which the Borrower is liable,
       continently or otherwise, as obligor, guarantor or otherwise, or in
       respect of which the Borrower otherwise assures a creditor against loss
       and (ii) obligations under leases which shall have been or should be, in
       accordance with generally accepted accounting principles, reported as
       capital leases in respect of which the Borrower is liable, continently or
       otherwise, or in respect of which the Borrower otherwise assures a
       creditor against loss.

       O.  "Obligations" shall mean all amounts owing by the Borrower to the
       Bank pursuant to this Agreement.

       P.  "Permitted Liens" shall mean: (i) liens and security interests
       security indebtedness owed by the Borrower to the Bank; (ii) liens for
       taxes, assessments or similar charges either not yet due or being
       contested in good faith, provided proper reserves are maintained therefor
       in accordance with generally accepted accounting procedure; (iii) liens
       of materialmen, mechanics, warehousemen, or carrier: or other like liens
       arising in the ordinary course of business and securing obligations which
       are not yet delinquent; (iv) purchase money liens or purchase money
       security interests upon or in any property acquired or held by the
       Borrower in the ordinary course of business to secure Indebtedness
       outstanding on the date hereof or permitted to be incurred pursuant to
       this Agreement: (v) liens and security interests which, as of the date
       hereof, have been disclosed to and approved by the Bulk in writing; and
       (vi) those liens and security interests which in the aggregate constitute
       an immaterial and insignificant monetary amount with respect to the net
       value of the Borrower's assets.

       Q.  "Reference Rate" shall mean an index for a variable interest rate
       which is quoted, published or announced from time to time by the Bank as
       its reference rate and as to which loans may be made by the Bank at,
       below or above such reference rate.

       R.  "Subordinated Debt" shall mean such liabilities of the Borrower which
       have been subordinated to those owed to the Bank in a manner acceptable
       to the Bank.

1.02.  Accounting Terms. All references to financial statements, assets,
liabilities, and similar accounting items not specifically defined herein shall
mean such financial statements or such items prepared or determined in
accordance with generally accepted accounting principles consistently applied
and, except where otherwise specified, all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.

1.03.  Other Terms. Other terms not otherwise defined shall have the meanings
attributed to such terms in the California Uniform Commercial Code.

                                  SECTION II

                               CREDIT FACILITIES

2.01.  Commitment to Lend. Subject to the terms and conditions of this Agreement
and so long as no Event of Default occurs, the Bank agrees to extend to the
Borrower the credit accommodations that follow.

2.02.  Accounts Receivable Line of Credit Facility. The Bank agrees to make
loans and Advances to the Borrower, upon the Borrower's request therefor made
prior to the Expiration Date (as defined below in this Section 2.02), against
the Eligible Accounts of the Borrower, provided the aggregate amount of such
Advances outstanding at any time does not exceed the Borrowing Base. Within the
foregoing limits, the Borrower may borrow, partially or wholly prepay, and
reborrow under this Accounts Receivable line of Credit facility.

       A.  Purpose. Advances made under this Accounts Receivable Line of Credit
       shall be used for working capital.

       B.  Interest Rate. Interest shall accrue on the outstanding principal
       balance of Advances under this Accounts Receivable Line of Credit at a
       variable rate equal to the Bank's Reference Rate, as it may change from
       time to time, plus 1.000% per annum. (Such rate is refereed to in this
       Section 2.02 as the "Variable Rate".) The Variable Rate shall be adjusted
       concurrently with any change in the Reference Rate. Interest shall be
       calculated on the basis of 360 days per year but charged on the actual
       number of days elapsed.

       C.  Payment of Interest. The Borrower hereby promises and agrees to pay
       interest monthly on the last day of each month, commencing on April 30,
       1996.

       D.  Repayment of Principal. Unless sooner due in accordance with the
       terms of this Agreement, on April 30, 1997 the Borrower hereby promises
       and agrees to pay to the Bank in full the aggregate unpaid principal
       balance of all Advances then outstanding, together with all accrued and
       unpaid interest thereon.

       In addition to the above payments, if at any time the aggregate principal
       amount of the outstanding Advances shall exceed the applicable Borrowing
       Base, the Borrower hereby promises and agrees, immediately upon written
       or telephonic notice from the Bank, to pay to the Bank an amount equal to
       the difference between the outstanding principal balance of the Advances
       and the Borrowing Base.

       Any payment received by the Bank shall, at the Bank's option, first be
       applied to pay any late fees or other fees then due and unpaid, and then
       to interest then due and unpaid and the remainder thereof (if any) shall
       be applied to reduce principal.

       E.  Late Fee. If any regularly scheduled payment of principal and/or
       interest (exclusive of the final payment upon maturity), or any portion
       thereof, under this Accounts Receivable Line of Credit is not paid within
       ten (10) calendar days after it is due, a late payment charge equal to
       five percent (5%) of such past due payment may be assessed and shall be
       immediately payable.
<PAGE>
 
       F.  Making Line Advances/Notice or Borrowing. Each Advance made hereunder
       shall be conclusively deemed to have been made at the request of and for
       the benefit of the Borrower (i) when credited to any deposit account of
       the Borrower maintained with the Bank or (ii) when paid in accordance
       with the Borrower's written instructions. Subject to any other
       requirements set forth in this Agreement, Advances shall be made by the
       Bank upon telephonic or written notice received from the Borrower in form
       acceptable to the Bank, which notice shall be received not later than
       2:00 p.m. (California Tune) on the date specified for such Advance, which
       date shall be a Business Day. Requests for Advances received after such
       time may, at the Bank's option, be deemed to be a request for an Advance
       to be made on the next succeeding Business Day.

       G.  Facility Fees. The following fees for this facility shall be paid in
       cash upon execution of this Agreement or prior to funding of this
       facility: Loan Fees in the amount of 56,250.00.

       H.  Expiration of the Accounts Receivable line of Credit Facility. Unless
       earlier terminated in accordance with the terms of this Agreement, the
       Bank's commitment to make Advances to the Borrower hereunder shall
       automatically expire on April 30, 1997 (the Expiration Date"), and the
       Bank shall be under no further obligation to advance any monies
       thereafter.

       I.  Line Account. The Bank shall maintain on its books a record of
       account in which the Bank shall make entries for each Advance and such
       other debits and credits as shall be appropriate in connection with the
       Accounts Receivable Line of Credit facility (the "Line Account"). The
       Bank shall provide the Borrower with a monthly statement of the
       Borrower's Line Account, which statement shall be considered to be
       correct and conclusively binding on the Borrower unless the Bank is
       notified by the Borrower to the contrary within thirty (30) days after
       the Borrower's receipt of any such statement which is deemed to be
       incorrect.

       J.  Amounts Payable on Demand. If the Borrower fails to pay on demand any
       amount so payable under this Agreement, the Bank may, at its option and
       without any obligation to do so and without waiving any default
       occasioned by the Borrower's failure to pay such amount, create an
       Advance in an amount equal to the amount so payable, which Advance shall
       thereafter bear interest as provided under this Accounts Receivable Line
       of Credit facility.

       In addition, the Borrower hereby authorizes the Bank if and to the extent
       payment owed to the Bank under this Accounts Receivable Line of Credit
       facility is not made when due, to charge, from time to time, against any
       or all of the deposit accounts maintained by the Borrower with the Bank
       any amount so due.

                                  SECTION III

                                  COLLATERAL

3.01.  Grant or Security Interest. To secure payment and performance of all of
the Borrower's Obligations under this Agreement and the performance of all the
terms, covenants and agreements contained in this Agreement (and any and all
modifications, extensions and renewals of the Agreement) and in any other
document, instrument or agreement evidencing or related to the Obligations or
the Collateral, and also to secure all other liabilities, loans, guarantees,
covenants and duties owed by the Borrower to the Bank, whether or not evidenced
by this or by any other agreement, absolute or contingent, due or to become due,
now existing or hereafter and howsoever created, the Borrower hereby grants to
the Bank a security interest in and to all of the following property:

       A.  Equipment. All goods and equipment ("Equipment") now owned or
       hereafter acquired by the Borrower or in which the Borrower now has or
       may hereafter acquire any interest including, but not limited to all
       machinery, furniture furnishings, fixtures, tools, supplies and motor
       vehicles of every kind and description and all additions, accessions,
       improvements, replacements and substitutions thereto and thereof.

       B.  Inventory. All inventory ("Inventory") now owned or hereafter
       acquired by the Borrower including, but not limited to, all raw
       materials, work in process, finished goods, merchandise, parts and
       supplies of every kind and description, including inventory temporarily
       out of the Borrower's custody or possession, together with all returns on
       accounts.

       C.  Accounts and Contract Rights. All accounts and contract rights now
       owned or hereafter created or acquired by the Borrower, including but not
       Limited to, all receivables and all rights and benefits due to the
       Borrower under any contract or agreement.

       D.  General Intangibles. All general intangibles now owned or hereafter
       created or acquired by the Borrower, including but not limited to,
       goodwill, trademarks, trade styles, trade names, patents, patent
       applications, software, customer lists and business records.

       E.  Chattel Paper and Documents. All documents, instruments and chattel
       paper now owned or hereafter acquired by the Borrower.

       F.  Monies and other Property in Possession. All monies, and property of
       the Borrower now or hereafter in the possession of the Bank or the Bank's
       agents, or any one of them, including, but not limited to, all deposit
       accounts, certificates of deposit, stocks, bonds, indentures, warrants,
       options and other negotiable and non-negotiable securities and
       instruments, together with all stock rights, rights to subscribe,
       liquidating dividends, cash dividends, payments, dividends paid in stock,
       new securities or other property to which the Borrower may become
       entitled to receive on account of such property.

3.02.  Continuing Lien & Proceeds. The Bank's security interest in the
Collateral shall be a continuing lien and shall include all proceeds and
products of the Collateral including, but not Limited to, the proceeds of any
insurance thereon as well as all accounts, contract rights, documents,
instruments and chattel paper resulting from the sale or disposition of any
Equipment.

3.03.  Exclusion of Consumer Debt. The Obligations and performance secured
hereby shall not include any indebtedness of the Borrower incurred for personal,
family or household purposes except to the extent any disclosure required under
any consumer protection law (including but not limited to the Truth in Lending
Act) or any regulation thereto, as now existing or hereafter amended, is or has
been given.

                                  SECTION IV

                             CONDITIONS PRECEDENT

4.01.  Conditions Precedent to the Initial Extension of Credit and/or First
Advance. The obligation of the Bank to make the initial extension of credit
and/or the first Advance hereunder is subject to the conditions precedent that
the Bank shall have received before the date of such extension of credit and/or
the first Advance all of the following, in form and substance satisfactory to
the Bank:

       A.  Authority to Borrow. Evidence relating to the duly given approval and
       authorization of the execution, delivery and performance of this
       Agreement, all other documents, instruments and agreements required under
       this Agreement and all other actions to be taken by the Borrower
       hereunder or thereunder.

       B.  Guarantors. Continuing guaranties in favor of the Bank, in form and
       substance satisfactory to the Bank, executed by Doreen Chiu, Frank Chiu,
       ATG Richland Corporation and Allied Ecology Services, Inc. (each a
       "Guarantor"), together with evidence that the execution, delivery and
       performance of the Guaranties by each Guarantor has been duly authorized.

       C.  Subordinations. The subordination to all indebtedness from time to
       time owed by the Borrower to the Bank of certain indebtedness now or
       hereafter owing by the Borrower to the following creditors, each such
       subordination to be in form and substance satisfactory to the Bank:
       Doreen Chiu, Richard Eng, Jack Cheng and Sophia Wu
<PAGE>
 
       (each a "Creditor"). Each Creditor shall also provide evidence that the
       execution, delivery and performance of the subordination by such Creditor
       has been duly authorized.

       D.  Loan Fees. Evidence that any required loan fees and expenses as set
       forth above with respect to each credit facility have been paid or
       provided for by the Borrower.

       E.  Audit. The opportunity to conduct an audit of the Borrower's books,
       records and operations and the Bank shall be satisfied as to the
       condition thereof.

       F.  Miscellaneous Documents. Such other documents, instruments,
       agreements and opinions as are necessary, or as the Bank may reasonably
       require, to consummate the transactions contemplated under this
       Agreement, all fully executed.

4.02.  Conditions Precedent to All Extensions of Credit and/or Advances. The
obligation of the Bank to make any extensions of credit and/or each Advance to
or on account of the Borrower (including the initial extension of credit and/or
the first Advance) shall be subject to the further conditions precedent that, as
of the date of each extension of credit or Advance and after the making of such
extension of credit or Advance:

       A.  Representations and Warranties. The representations and warranties
       set forth in the Section entitled "Representations and Warranties" herein
       and in any other document, instrument, agreement or certificate delivered
       to the Bank hereunder are true and correct.

       E.  Collateral. The security interest in the Collateral has been duly
       authorized, created and perfected with first priority and is in full
       force and effect and the Bank has been provided with satisfactory
       evidence of all filings necessary to establish such perfection and
       priority.

       C.  Event of Default. No event has occurred and is continuing which
       constitutes, or, with the lapse of time or giving of notice or both,
       would constitute an Event of Default.

       D.  Reporting Requirements. The Bank shall have received all documents
       required to be delivered under the "Reporting Requirements" provisions of
       the "Covenants" section of this Agreement.

       E.  Subsequent Approvals, Etc. The Bank shall have received such
       supplemental approvals, opinions or documents as the Bank may reasonably
       request.

4.03.  Reaffirmation of statements. For the purposes hereof, the Borrower's
acceptance of the proceeds of any extension of credit and the Borrower's
execution of any document or instrument evidencing or creating any Obligation
hereunder shall each be deemed to constitute the Borrower's representation and
warranty that the statements set forth above in this Section are true and
correct.

                                   SECTION V
                        REPRESENTATIONS AND WARRANTIES

The Borrower hereby makes the following representations and warranties to the
Bank, which representations and warranties are continuing:

5.01.  Status. The Borrower is a corporation duly organized and validly existing
under the laws of the State of California and is properly licensed, qualified to
do business and in good standing in, and, where necessary to maintain the
Borrower's rights and privileges, has complied with the fictitious name statute
of every jurisdiction in which the Borrower is doing business.

5.02.  Authority. The execution, delivery and performance by the Borrower of
this Agreement and any instrument, document or agreement required hereunder have
been duly authorized and do not and will not: (i) violate any provision of any
law, rule, regulation, writ, judgment or injunction presently in effect
affecting the Borrower; (ii) require any consent or approval of the
stockholders of the Borrower or violate any provision on of the articles of
incorporation or bylaws of the Borrower; or (iii) result in a breach of or
constitute a default under any material agreement to which the Borrower is a
party or by which it or its properties may be bound or affected.

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

5.04.  Fictitious Trade Styles. The Borrower currently uses no fictitious trade
styles in connection with its business operations. The Borrower shall notify the
Bank within thirty (30) days of the use of any fictitious trade style at any
future date, indicating the trade style and state(s) of its use.

5.05.  Financial Statements. All financial statements, information and other
data which may have been and which may hereafter be submitted by the Borrower to
the Bank are true, accurate and correct and have been and will be prepared in
accordance with generally accepted accounting principles consistently applied
and accurately represent the Borrower's financial condition and, as applicable,
the other information disclosed therein. Since the most recent submission of any
such financial statement, information or other data to the Bank, the Borrower
represents and warrants that no material adverse change in the Borrower's
financial condition or operations has occurred which has not been fully
disclosed to the Bank in writing.

5.06.  Litigation. Except as have been disclosed to the Bank in writing, there
are no actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or the Borrower's
properties before any court or administrative agency which, if determined
adversely to the Borrower, would have a material adverse effect on the
Borrower's financial condition, operations or the Collateral.

5.07.  Title to Assets. The Borrower has good and marketable title to all of its
assets (including, but not limited to, the Collateral) and the same are not
subject to any security interest encumbrance, lien or claim of any third person
except for Permitted Liens.

5.08.  ERISA. If the Borrower has a pension, profit sharing or retirement plan
subject to ERISA, such plan has been and will continue to be funded in
accordance with its terms and otherwise complies with and continues to comply
with the requirements of ERISA.

5.09.  Taxes. The Borrower has filed all tax returns required to be filed and
paid all taxes shown thereon to be due, including interest and penalties, other
than taxes which are currently payable without penalty or interest or those
which are being duly contested in good faith.

5.10.  Environmental Compliance. The operations of the Borrower comply, and
during the term of this Agreement will stall times comply, in all respects with
all Environmental Laws; the Borrower has obtained licenses, permits,
authorizations and registrations red under any Environmental Law
("Environmental Permits") and necessary for its ordinary operations, all such
Environmental Permits are in good standing, and the Borrower is in compliance
with all material terms and conditions of such Environmental Permits; neither
the Borrower nor any of its present properties or operations are subject to any
outstanding written order from or agreement with any governmental authority nor
subject to any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material; there are no
Hazardous Materials or other conditions or circumstances existing, or arising
from operations prior to the date of this Agreement, with respect to any
property of the Borrower that would reasonably be expected to give rise to
Environmental Claims; provided however, that with respect to property Leased
from an unrelated third party, the foregoing representation is made to the best
knowledge of the Borrower. In addition, (i) the Borrower does not have or
maintain any underground storage tanks which are not property registered or
permitted under applicable Environmental Laws or which are leaking or disposing
of Hazardous Materials off-site, and (ii) the Borrower has notified all of its
employees of the existence, if any, of any health hazard arising from the
conditions of their employment and have met all notification requirements under
Title III of CERCLA and all other Environmental Laws.
<PAGE>
 
5.11.  Accounts. Each Eligible Account represent a bona fide sale conforming to
the requirements set forth for "Eligible Accounts" in the Definitions section
hereof.

                                  SECTION VI

                                   COVENANTS

The Borrower covenants and agrees that during the term of this Agreement, and
so long thereafter as the Borrower is indebted to the Bank under this Agreement,
the Borrower shall, unless the Bank otherwise consents in writing:

6.01.  Preservation of Existence; Compliance with Applicable Laws. Maintain and
preserve its existence and all rights and privileges now enjoyed; not to
liquidate or dissolve, merge or consolidate with or into, or acquire any other
business organization; and conduct its business in accordance with all
applicable laws, rules and regulations.

6.02.  Maintenance of Insurance. Maintain insurance in such amount and covering
such risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
operates and maintain such other insurance and coverages as may be required by
the Bank. All such insurance shall be in form and amount and with companies
satisfactory to the Bank. With respect to insurance covering properties in which
the Bank maintains a security interest or lien, such insurance shall be in an
amount not less than the full replacement value thereof, at the Bank's request,
shall name the Bank as loss payee pursuant to a loss payable endorsement
satisfactory to the Bank and shall not be altered or canceled except upon ten
(10) days' prior written notice to the Bank. Upon the Bank's request, the
Borrower shall furnish the Bank with the original policy or binder of all such
insurance.

6.03.  Maintenance of Collateral and Other Properties. Except for Permitted
Liens, the Borrower shall keep and maintain the Collateral free and clear of all
levies, liens, encumbrances and security interests (including, but not limited
to, any lien of attachment, judgement or execution) and defend the Collateral
against any such levy, lien, encumbrance or security interest; comply wit all
laws, statutes and regulations pertaining to the Collateral and its use and
operation; execute, file and record such statements, notices and agreements,
take such actions and obtain such certificates and other documents as necessary
to perfect, evidence and continue the Bank's security interest in the Collateral
and the priority thereof; maintain accurate and complete records of the
Collateral which show all sales, claims and allowances; and properly care for,
house, store and maintain the Collateral in good condition, free of misuse,
abuse and deterioration, other than normal wear and tear. The Borrower shall
also maintain and preserve all its properties in good working order and
condition in accordance with the general practice of other businesses of similar
character and size, ordinary wear and tear excepted.

6.04.  Location and Maintenance of Equipment.

       A.  Location. The Equipment shall at all times be in the Borrower's
       physical possession, shall not be held for sale or lease and shall be
       kept only at the following location(s): 47375 Fremont Boulevard, Fremont,
       CA 94538.

       The Borrower shall not secrete, abandon or remove, or permit the removal
       of, the Equipment, or any part thereof, from the location(s) shown above
       or remove or permit to be removed any accessories now or hereafter placed
       upon the Equipment.

       B.  Equipment Schedules. Upon the Bank's demand, the Borrower shall
       immediately provide the Bank with a complete and accurate description of
       the Equipment including, as applicable, the make, model, identification
       number and serial number of each item of Equipment. In addition, the
       Borrower shall immediately notify the Bank of the acquisition of any new
       or additional Equipment or the replacement of any existing Equipment and
       shall supply the Bank with a complete description of any such additional
       or replacement Equipment.

       C.  Maintenance of Equipment. The Borrower shall, at the Borrower's sole
       cost and expense, keep and maintain the Equipment in a good state of
       repair and shall not destroy, misuse, abuse, illegally use or be
       negligent in the care of the Equipment or any part thereof. The Borrower
       shall not remove, destroy, obliterate, change, cover, paint, deface or
       alter the name plates, serial numbers, labels or other distinguishing
       numbers or identification marks placed upon the Equipment or any part
       thereof by or on behalf of the manufacturer, any dealer or rebuilder
       thereof, or the Bank. The Borrower shall not be released from any
       liability to the Bank hereunder because of any injury to or loss or
       destruction of the Equipment. The Borrower shall allow the Bank and its
       representatives free access to and the right to inspect the Equipment at
       all times and shall comply with the terms and conditions of any leases
       covering the real property on which the Equipment is located and any
       orders, ordinances, laws, regulations or rules of any federal, state or
       municipal agency or authority having jurisdiction of such real property
       or the conduct of business of the persons having control or possession of
       the Equipment.

       D.  Fixtures. The Equipment is not now and shall not at any time
       hereafter be so affixed to the real property on which it is located as to
       become a fixture or a part thereof. The Equipment is now and shall at all
       times hereafter be and remain personal property of the Borrower.

6.05.  Location and Quality of Inventory. The Inventory (i) is now and shall at
all times hereafter be of good and merchantable quality and free from defects;
(ii) is not now and shall not at any time hereafter be stored with a bailee,
warehouseman or similar party without the Bank's prior written consent and, in
such event, the Borrower will concurrently therewith cause any such bailee,
warehouseman or similar party to issue and deliver to the Bank, in form
acceptable to the Bank, warehouse receipts in the Bank's name evidencing the
storage of inventory; (iii) shall all times be in the Borrower's physical
possession; (iv) shall not be held by others on consignment, sale on approval,
or sale or return; and (v) shall be kept only at the following locations(s):
47375 Fremont Boulevard, Fremont, CA 94538.

6.06.  Payment of Obligations and Taxes. Make timely payment of all assessments
and taxes and all of its liabilities and obligations including, but not limited
to, trade payables, unless the same are being contested in good faith by
appropriate proceedings with the appropriate court or regulatory agency. For
purposes hereof, the Borrower's issuance of a check, draft or similar instrument
without delivery to the intended payee shall not constitute payment.

6.07.  Inspection Rights. At any reasonable time and from time to time permit
the Bank or any representative thereof to examine and flake copies of the
records and visit the properties of the Borrower and to discuss the business and
operations of the Borrower with any employee or representative thereof. If the
Borrower now or at any time hereafter maintains any records (including, but not
limited to, computer generated records and computer programs for the generation
of such records) in the possession of a third party, the Borrower hereby agrees
to notify such third party to permit the Bank free access to such records at all
reasonable times and to provide the Bank with copies of any records it may
request, all at the Borrower's expense, the amount of which shall be
payable immediately upon demand. In addition, the Bank may, at any reasonable
time and from time to time, conduct inspections and audits of the Collateral and
the Borrower's accounts payable, the cost and expenses of which shall be paid by
the Borrower to the Bank upon demand.

6.08.  Reporting Requirements. Deliver or cause to be delivered to the bank in
form and detail satisfactory to the Bank:

       A. Annual Statements. Not later than 120 days after the end of each of
       the Borrower's fiscal years, a copy of the annual financial report of the
       Borrower for such year, which report shall be a CPA audited report.

       B. Interim Statements. Not later than 30 days after the end of each
       fiscal quarter, the Borrower's financial statement as of the end of such
       fiscal quarter.

       C. Receivables and Payables Agings. Not later than 30 days after the end
       of each month, an aging of accounts receivable and an aging of accounts
       payable indicating separately (i) the amount of Eligible Accounts; (ii)
       the amount of total accounts receivable which are current, 1 to 30 days
       past the date of invoice, 31 to 60 days past the
<PAGE>
 
       date of invoice, and over 60 days past the date of invoice; and an aging
       of accounts payable indicating the amount of such payables which are
       current, 1 to 30 days past the date of invoice, 31 to 60 days past the
       date of invoice, and over 60 days past the date of invoice.

       D.  Borrowing Base Certificate. Not later than 30th day of each month,
       the Borrower shall deliver to the Bank a certificate (each a "Borrowing
       Base Certificate") in form and substance satisfactory to the Bank with 
       proper insertions, duly executed by the Borrower, certifying the value of
       Eligible Accounts as of the last day of the preceding month. Such
       Borrowing Base Certificate shall establish the Borrowing Base for
       purposes hereof from the date of receipt by the Bank until the earlier of
       the date the next Borrowing Base Certificate is received or the date such
       Borrowing Base Certificate is due. Notwithstanding anything to the
       contrary in this Agreement, the Bank may, at its option, at any time and
       from time to time require that each request for an Advance under the
       Accounts Receivable Line of Credit facility described in Section II of
       this Agreement be accompanied by a Borrowing Base Certificate based upon
       which the Bank shall calculate the Borrowing Base for the purpose of
       determining the maximum dollar amount which may, from time to time, be
       outstanding under such Accounts Receivable Line of Credit.

       E.  Other Information. Promptly upon the Bank's request, such other
       information pertaining to the Borrower, the Collateral, or any Guarantor
       as the Bank may reasonably request.

6.09.  Payment of Dividends. The Borrower shall not declare or pay any dividends
on any claim of its stock now or hereafter outstanding except dividends payable
solely in the corporation's capital stock.

6.10.  Redemption or Repurchase of Stock. The Borrower shall not redeem or
repurchase any claim of its corporate stock now or hereafter outstanding.

6.11.  Additional Indebtedness. Not, after the date hereof, create, incur or
assume, directly or indirectly, any liability or indebtedness other than
(i) indebtedness owed or to be owed to the Bank, (ii) indebtedness to trade
creditors incurred in the ordinary course of the Borrower's business, or (iii)
additional indebtedness incurred in equipment leasing up to an aggregate amount
not exceeding $2,000,000.00 in any one fiscal year.

6.12.  Loans. Not make any loans or advances or extend credit to any third
person, including, but not limited to, directors, officers, shareholders,
partners, employees, affiliated entities or subsidiaries of the Borrower, except
for credit extended in the ordinary course of the Borrower's business as
presently conducted.

6.13.  Liens and Encumbrances. Not create, assume or permit to exist any
security interest, encumbrance, mortgage, deed of trust or other lien
(including, but not limited to, a lien of attachment, judgment or execution)
affecting any of the Borrower's properties, or execute or allow to be filed any
financing statement or continuation thereof affecting any such properties,
except for Permitted Liens or as otherwise provided in this Agreement and except
for liens or encumbrances up to an aggregate amount not exceeding $2,000,000.00
for equipment leasing in any one fiscal year.

6.14.  Transfer Assets. Not sell, contract for sale, transfer, convey, assign,
lease or sublet any assets of the Borrower, including, but not limited to, the
Collateral, except in the ordinary course of business as presently conducted by
the Borrower, and then, only for full, fair and reasonable consideration.

6.15.  Change in the Nature of Business. Not make any material change in the
Borrower's financial structure or in the nature of the Borrower's business as
existing or conducted as of the date of this Agreement.

6.16.  Financial Condition. Maintain at all times:

       A.  Net Worth. A minimum Effective Tangible Net Worth of not less than
       $10,600,000.00.

       E.  Debt to Net Worth Ratio. A Debt to Effective Tangible Net Worth ratio
       of not more than 1.15 to 1.00.

       C.  Quick Ratio. A Quick ratio of not less than 120 to 1.00. For purposes
       of foregoing, the term "Quick Ratio" is defined as cash plus billed
       receivables divided by current liabilities.

       D.  Debt Service Coverage Ratio, A minimum Debt Service Coverage Ratio of
       not less than 1.05 to 1.00. For purposes of the foregoing, the term "Debt
       Service Coverage Ratio" is defined as the sum of net income plus
       depreciation plus interest expense divided by current portion long term
       debt plus interest expense.

       E.  Profitability. A minimum net profit on a quarterly basis of at least
       $1.00 beginning June 30, 1996 and thereafter.

6.17.  Compensation of Employees. Compensate the employees of the Borrower for
services rendered at an hourly rate at least equal to the minimum hourly rate
prescribed by any applicable federal or state law or regulation.

6.18.  Capital Expenses. Not make any fixed capital expenditure or any
commitment therefor, including, but not limited to, incurring liability for uses
which would be, in accordance with generally accepted accounting principles,
reported as capital leases, or purchase any real or personal property except for
expenditures in an aggregate amount not exceeding $4,000,000.00 in any one
fiscal year.

6.19.  Environmental Compliance, The Borrower shall:

       A.  Conduct the Borrower's operations and keep and maintain all of its
       properties in compliance with all Environmental Laws.

       B.  Give prompt written notice to the Bank, but in no event later than 10
       days after becoming aware, of the following: (i) any enforcement,
       cleanup, removal or other governmental or regulatory actions instituted,
       completed or threatened against the Borrower or any of its affiliates or
       any of its respective properties pursuant to any applicable Environmental
       Laws, (ii) all other Environmental Claims, and (iii) any environmental or
       similar condition on any real property adjoining or in the vicinity of
       the property of the Borrower or its affiliates that could reasonably be
       anticipated to cause such property or any part thereof to be subject to
       any restrictions on the ownership, occupancy, transferability or use of
       such property under any Environmental Laws.

   C.  Upon the written request of the Bank, the Borrower shall submit to the
   Bank at its sole cost and expense, at reasonable intervals, a report
   providing an update of the status of any environmental, health or safety
   compliance, hazard or liability issue identified in any notice required
   pursuant to this Section.

   D.  At all times indemnify and hold harmless the Bank from and against any
   and all liability arising out of any Environmental Claims.

6.20.  Notice. Give the Bank prompt written notice of any and all (i) Events of
Default; (ii) litigation, arbitration or administrative proceedings to which the
Borrower is a party and in which the claim or liability exceeds $100,000.00 or
which affects the Collateral; (iii) any change in the place of business of the
Borrower or the acquisition of more than one place of business by the Borrower;
(iv) any proposed or actual change in the name, identity or business nature of
the Borrower; (v) any change in the location of the Equipment or Inventory; and
(vi) other matters which have resulted in, or might result in a material adverse
change in the Collateral or the financial condition or business operations of
the Borrower.
<PAGE>
 
                                  SECTION VII

                               EVENTS OF DEFAULT

Any one or more of the following described events shall constitute an event of
default under this Agreement:

7.01.  Non-Payment. The Borrower shall fail to pay any Obligations within 10
days of when due.

7.02.  Performance Under This and Other Agreements. The Borrower shall fail in
any material respect to perform or observe any term, covenant or agreement
contained in this Agreement or in any document, instrument or agreement
evidencing or relating to any indebtedness of the Borrower (whether owed to the
Bank or third persons), and any such failure (exclusive of the payment of money
to the Bank under this Agreement or under any other document, instrument or
agreement, which failure shall constitute and be an immediate Event of Default
if not paid when due or when demanded to be due) shall continue for more than 30
days after written notice from the Bank to the Borrower of the existence and
character of such Event of Default.

7.03.  Representations and Warranties; Financial Statements. Any representation
or warranty made by the Borrower under or in connection with this Agreement or
any financial statement given by the Borrower or any Guarantor shall prove to
have been incorrect in any material respect when made or given or when deemed to
have been made or given.

7.04.  Insolvency. The Borrower or any Guarantor shall: (i) become insolvent or
be unable to pay its debts as they mature; (ii) make an assignment for the
benefit of creditors or to an agent authorized to liquidate any substantial
amount of its properties or assets; (iii) file a voluntary petition in
bankruptcy or seeking reorganization or to effect a plan or other arrangement
with creditors; (iv) file an answer admitting the material allegations of an
involuntary petition relating to bankruptcy or reorganization or join in any
such petition; (v) become or be adjudicated a bankrupt; (vi) apply for or
consent to the appointment of, or consent that an order be made, appointing any
receiver, custodian or trustee for itself or any of its properties, assets or
businesses; or (vii) any receiver, custodian or trustee shall have been
appointed for all or a substantial part of its properties, assets or businesses
and shall not be discharged within 30 days after the date of such appointment.

7.05.  Execution. Any writ of execution or attachment or any judgment lien shall
be issued against any property of the Borrower and shall not be discharged or
bonded against or released within 30 days after the issuance or attachment of
such writ or lien.

7.06.  Revocation or Limitation of Guaranty. Any Guaranty shall be revoked or
limited or its enforceability or validity shall be contested by any Guarantor,
by operation of law, legal proceeding or otherwise or any Guarantor who is a
natural person shall die.

7.07.  Suspension. The Borrower shall voluntarily suspend the transaction of
business or allow to be suspended, terminated, revoked or expired any permit,
license or approval of any governmental body necessary to conduct the Borrower's
business as now conducted.

7.08.  Change in Ownership. There shall occur a sale, transfer, disposition or
encumbrance (whether voluntary or involuntary), or an agreement shall be entered
into to do so, with respect to more than 10% of the issued and outstanding
capital stock of the Borrower.

7.09.  Impairment of Collateral. There shall occur any injury or damage to
all or any part of the Collateral or all or any part of the Collateral shall be
lost, stolen or destroyed which changes cause the Collateral, in the sole and
absolute judgement of the Bank, to become unacceptable as to character and
value.

                                  SECTION VIII

                              REMEDIES ON DEFAULT

       Upon the occurrence of any Event of Default, the Bank may, at its sole
       election, without demand and upon only such notice as may be required by
       law:

8.01.  Acceleration. Declare any or all of the Borrower's indebtedness owing to
the Bank, whether under this Agreement or under any other document, instrument
or agreement, immediately due and payable, whether or not otherwise due and
payable.

8.02.  Cease Extending Credit. Cease making Advances or otherwise extending
credit to or for the account of the Borrower under this Agreement or under any
other agreement now existing or hereafter entered into between the Borrower and
the Bank.

8.03.  Termination. Terminate this Agreement as to any future obligation of the
Bank without affecting the Borrower's obligations to the Bank or the Bank's
rights and remedies under this Agreement or under any other document, instrument
or agreement.

8.04.  Segregate Collections. Require the Borrower to segregate all collections
and proceeds of the Collateral so that they are capable of identification and to
deliver such collections and proceeds to the Bank, in kind, without commingling,
at such times and in such manner as required by the Bank.

8.05.  Records of Collateral. Require the Borrower to periodically deliver to
the Bank records and schedules showing the status, condition and location of the
Collateral and such contracts or other matters which affect the Collateral. In
connection herewith, the Bank may conduct such audits or other examination of
such records, including, but not limited to, verification of balances owing by
any account debtor of the Borrower, as the Bank, in its sole and absolute
discretion, deems necessary.

8.06.  Notification of Account Debtors.

       A. Notify any or all of the Borrower's Account Debtors, or any buyers or
       transferees of the Collateral or other persons of the Bank's interest in
       the Collateral and the proceeds thereof and instruct such person(s) to
       thereafter make any payment due the Borrower directly to the Bank.

       B. The Borrower hereby irrevocably and unconditionally appoints the Bank
       as its attorney-in-fact to: (i) endorse the Borrower's name on any notes,
       acceptances, checks, drafts, money orders or other evidence of payment
       that may come into the Bank's possession; (ii) sign the Borrower's name
       on any invoice or bill of lading relating to any of the Collateral; (iii)
       notify post office authorities to change the address for delivery of mail
       addressed to the Borrower to such address as the Bank may designate and
       take possession of and open mail addressed to the Borrower and remove
       therefrom, proceeds of and payments on the Collateral; and (iv) demand,
       receive and endorse payment and give receipts, releases and satisfactions
       for and sue for all money payable to the Borrower. All of the preceding
       may be done either in the name of the Bank or in the name of the Borrower
       with the same force and effect a the Borrower could have done had this
       Agreement not been entered into.

       C. Require the Borrower to indicate on the face of all invoices (or such
       other documentation as may be specified by the Bank relating to the sale,
       delivery or shipment of goods giving rise to the account) that the
       account has been assigned to the Bank and that all payments are to be
       made directly to the Bank at such address as the Bank may designate.

8.07.  Compromise. Grant extensions, compromise claims and scale any account for
less than the amount owing thereunder, all without notice to the Borrower or
<PAGE>
 
any obligor on or guarantor of the Obligations.

8.08.  Protection of Security Interest. Make such payments and do such acts as
the Bank, in its sole judgment, considers necessary and reasonable to protect
its security interest or lien in the Collateral. The Borrower hereby irrevocably
authorizes the Bank to pay, purchase, contest or compromise any encumbrance,
flea or claim which the Bank. in its sole judgment, deems to be prior or
superior toils security interest. Further, the Borrower hereby agrees to pay to
the Rant, upon demand there for, all expenses and expenditures (including
attorneys' fees) incurred in connection with the foregoing.

8.09.  Foreclosure. Enforce any security interest or lien given or provided for
under this Agreement or under any security agreement, mortgage, deed of trust or
other document relating to the Collateral, in such manner and such order, as to
all or any part of the Collateral, as the Bank, in its said judgment, deems to
be necessary or appropriate and the Borrower hereby waives any and all right:,
obligations or defenses now or hereafter established by law relating to the
foregoing. In the enforcement of its security interest or lien, the Bank is
authorized to enter upon the premises where any Collateral is located and take
possession of the Collateral or any part thereof, together with the Borrower's
records pertaining thereto, or the Bank may require the Borrower to assemble the
Collateral and records pertaining thereto and make such Collateral and records
available to the Bank at a place designated by the Bank. The Bank may sell the
Collateral or any portions thereof, together with all additions, accessions and
accessories thereto, giving only such notices and following only such procedures
are required by law, at either a public or private sale, or both, with or
without having the Collateral present at the time of sale, which sale shall be
on such terms and conditions and conducted in such manner as the Bank determines
in its sole judgment to be commercially reasonable. Any deficiency which exists
after the disposition or liquidation of the Collateral shall be a continuing
liability of any obligor on or any guarantor of the Obligations and shall be
immediately paid to the Rant

8.10.  Application of Proceeds. All amounts received by the Bank as proceeds
from the disposition or liquidation of the Collateral shall be applied to the
Borrower's indebtedness to the Bank as follows: first, to the costs and expenses
of collection, enforcement, protection and preservation of the Bank's lien in
the Collateral, including court costs and reasonable attorneys' fees, whether or
not suit is commenced by the Bank; next, to these costs and expenses incurred by
the Bank in protecting, preserving, enforcing, collecting, selling or disposing
of the Collateral; next, to the payment of accrued and unpaid interest on all of
the Obligations; next, to the payment of the outstanding principal balance of
the Obligations; and last, to the payment of any other indebtedness owed by the
Borrower to the Bank. Any excess Collateral or excess proceeds existing after
the disposition or liquidation of the Collateral will be returned or paid by the
Bank to the Borrower.

8.11.  Non-Exclusivity of Remedies. Exercise one or more of the Bank's rights
set forth herein or seek such other rights or pursue such other remedies as may
be provided by law, in equity or in any other agreement now existing or
hereafter entered into between the Borrower and the Bank, or otherwise.


                                   SECTION IX
                            MISCELLANEOUS PROVISIONS

9.01.  Default Interest Rate. If an Event of Default has occurred and is
continuing, the Bank, at its option, may require the Borrower to pay to the Bank
interest on any Indebtedness or amount payable under this Agreement at a rate
which is 3% in excess of the rate or rates otherwise then in effect under' this
Agreement.

9.02.  Disposal of Invoices. All documents, schedules, invoices or other paper
received by the Bank from the Borrower may be destroyed or disposed of six (6)
months after receipt by the Bank, unless the Borrower requests in writing the
return thereof, which shall be done at the Borrower's expense.

9.03.  Rights of the Bank With or Without Default. The Borrower agrees that the
Bank may at any time and at its option, whether or not the Borrower is in
default:

       A. Require the Borrower to provide daily, or at such other time as
       required by the Bank: (i) a transaction report and schedule of accounts
       receivable which indicates all sales made and all collections received
       for each such day; (ii) all remittances and collections of accounts in
       kind, and without commingling, to be applied to the payment of the
       Borrower's Obligations on the next Business Day following receipt
       thereof; provided however, that if such amounts are received in a form
       other than cash or bank wire, the Bank may withhold application of such
       amounts for such time to the extent permitted by law as the Bank, in its
       sole discretion. deems reasonable to allow for collection and provided
       further that any remittances and collections received by the Bank later
       than 2:00 p.m. (California time) on any day shall be deemed received on
       the next succeeding Business Day; and (iii) clear and legible copies of
       all invoices or sales receipt: evidencing the sale of goods or services
       by the Borrower.

       The Borrower hereby understands and agrees that, in the event the Bank
       directs the Borrower to comply with the provisions of the above
       paragraph, the proceeds of accounts ("Collections") shall not be
       immediately applied to reduce the Borrower's Obligations but shall he
       applied only when final settlement for such Collections is effected.

       B. Require the Borrower to direct all Account Debtors to forward all
       remittances, payments and proceeds of the Collateral directly to the Bank
       at such address as the Bank may designate. In connection therewith, the
       Borrower hereby irrevocably constitutes and appoints the Bank as its
       attorney-in-fact to endorse the Borrower's name on any notes,
       acceptances, checks, drafts, money orders or other evidence of payment
       that may come into the Bank's possession.

       C. Require the Borrower to deliver to the Bank, at such times designated
       by the Bank, records and schedules which show the status and condition of
       the Collateral, where it is located and such contracts or other matters
       which affect the Collateral.

       D. Send verification requests to any Account Debtor.

       E. Make inquiries of the Borrower's trade vendors.

 9.04. Indemnification. The Borrower agrees to hold the Bank harmless from and
 to indemnify and defend the Bank from any liability, claim, loss or expense
 (including, but not limited to, attorneys' fees) arising from any transaction
 between the Borrower and any Account Debtor including, but not limited to, any
 loss, claim or liability arising from:

        A. Any violation of any federal or state consumer protection law
        (including, but not limited to, the federal Truth-In-Lending Act) and
        regulations promulgated thereunder.

        E. Improper collection practices or procedures of the Borrower.

        C. Any unlawful acts taken by the Borrower in connection with the
        collection of any account(s).

        D. Any suit by any person against the Bank resulting or arising from
        such person's dealings with the Borrower.

 9.05.  Reliance. Each warranty, reprepresentation, covenant and agreement
 contained in this Agreement shall be conclusively presumed to have been relied
 upon by the Bank regardless of any investigation made or information possessed
 by the Bank and shall be cumulative and in addition to any other warranties,
 representations, covenants or agreements which the Borrower shall now or
 hereafter give, or cause to be given, to the Bank.
<PAGE>
 
 9.06.  Dispute Resolution.

    A. Disputes. It is understood and agreed that, upon the request or any party
    to this Agreement, any dispute, claim or controversy of any kind, whether in
    contract or in tort, statutory or common law, legal or equitable, now
    existing or hereinafter arising between the parties in any way arising out
    of, pertaining to or in connection with: (i) this Agreement, or any related
    agreements, documents or instruments, (ii) all past and present loans,
    credits, accounts, deposit accounts (whether demand deposits or time
    deposits), safe deposit boxes, safekeeping agreements, guarantees, letters
    of credit, goods or service, or other transactions, contracts or agreements
    of any kind, (iii) any incidents, omissions, acts, practices, or occurrences
    causing injury to any party whereby another party or its agents, employees
    or representatives may be liable, in whole or in part, or (iv) any aspect of
    the past or present relationships of the parties, shall be resolved through
    a two-step dispute resolution process administered by the Judicial
    Arbitration & Mediation Services, Inc. ("JAMS") as follows:

    B. Step I - Mediation. At the request of any party to the dispute, claim, or
    controversy, the matter shall be referred to the nearest office of JAMS for
    mediation, which is an informal, non-binding conference or conferences
    between the parties in which a retired judge or justice from the JAMS panel
    will seek to guide the parties to a resolution of the case.

    C.  Step II - Arbitration (Contracts Not Secured By Real Property). Should
    any dispute, claim or controversy remain unresolved at the conclusion of the
    Step I Mediation Phase, then (subject to the restriction at the end of this
    subparagraph) all such remaining matters shall be resolved by final and
    binding arbitration before a different judicial panelist, unless the parties
    shall agree to have the mediator panelist act as arbitrator. The hearing
    shall be conducted at a location determined by the arbitrator in Los
    Angeles, California (or such other city as may be agreed upon by the
    parties) and shall be administered by and in accordance with the then
    existing Rules of Practice and Procedure of JAMS and judgement upon any
    award rendered by the arbitrator may be entered by any State or Federal
    Court having jurisdiction thereof. The arbitrator shall determine which is
    the prevailing party and shall include in the award that party's reasonable
    attorneys' fees and costs. This subparagraph shall apply only if, at the
    time of the submission of the matter to JAMS, the dispute or issues involved
    do not arise out of any transaction which is secured by real property
    collateral or, if so secured, all parties consent to such submission.

    As soon as practicable after selection of the arbitrator, the arbitrator, or
    the arbitrator's designated representative, shall determine a reasonable
    estimate of anticipated fees and costs of the arbitrator, and render a
    statement to each party setting forth that party's pro-rata share of said
    fees and costs. Thereafter, each party shall, within 10 days of receipt of
    said statement, deposit said sum with the arbitrator. Failure of any party
    to make such a deposit shall result in a forfeiture by the non-depositing
    party of the right to prosecute or defend the claim which is the subject of
    the arbitration, but shall not otherwise serve to abate, stay or suspend the
    arbitration proceedings.

    D.  Step II - Trial by Court Reference (Contracts Secured By Real Property).
    If the dispute, claim or controversy is not one required or agreed to be
    submitted to arbitration, as provided in the above subparagraph, and has not
    been resolved by Step I mediation, then any remaining dispute, claim or
    controversy shall be submitted for determination by a trial on Order of
    Reference conducted by a retired judge or justice from the panel of JAMS
    appointed pursuant to the provisions of Section 638(1) of the California
    Code of Civil Procedure, or any amendment, addition or successor section
    thereto, to hear the case and report a statement of decision thereon. The
    parties intend this general reference agreement to be specifically
    enforceable in accordance with said section. If the parties are unable to
    agree upon a member of the JAMS panel to act as referee, then one shall be
    appointed by the Presiding Judge of the county wherein the hearing is to be
    held. The parties shall pay in advance, to the referee, the estimated
    reasonable fees and costs of the reference, as may be specified in advance
    by the referee. The parties shall initially share equally, by paying their
    proportionate amount of the estimated fees and costs of the reference.
    Failure of any party to make such a fee deposit shall result in a forfeiture
    by the non-depositing party of the right to prosecute or defend any cause of
    action which is the subject of the reference, but shall not otherwise serve
    to abate, stay or suspend the reference proceeding.

    E.  Provisional Remedies, Self Help and Foreclosure. No provision of, or the
    exercise of any rights under any portion of this Dispute Resolution
    provision, shall limit the right of any party to exercise self-help remedies
    such as set off, foreclosure against any real or personal property
    collateral, or the obtaining of provisional or ancillary remedies, such is
    injunctive relief or the appointment of a receiver, from any court having
    jurisdiction before, during or after the pendency of any arbitration. At the
    Bank's option, foreclosure under a deed of trust or mortgage may be
    accomplished either by exercise of power of sale under the deed of trust or
    mortgage, or by judicial foreclosure. The institution and maintenance of an
    action for provisional remedies, pursuit of provisional or ancillary
    remedies or exercise of self-help remedies shall not constitute a waiver of
    the right of any party to submit the controversy or claim to arbitration.

9.07.  Waiver of Jury. The Borrower and the Bank hereby expressly and
voluntarily waive any and all rights, whether arising under the California
constitution, any rules of the California Code of Civil Procedure, common law or
otherwise, to demand a trial by jury in any action, matter, claim or cause of
action whatsoever arising out of or in any way related to this Agreement or any
other agreement, document or transaction contemplated hereby.

9.08.  Restructuring Expenses. In the event the Bank and the Borrower negotiate
for, or enter into, any restructuring, modification or refinancing of the
Indebtedness under this Agreement for the purposes of remedying an Event of
Default, The Bank, may require the Borrower to reimburse all of the Bank's costs
and expenses incurred in connection therewith, including, but not limited to
reasonable attorneys' fees and the costs of any audit or appraisals required by
the Bank to be performed in connection with such restructuring, modification or
refinancing.

9.09.  Attorneys' Fees. In the event of any suit, mediation, arbitration or
other action in relation to this Agreement or any document, instrument or
agreement executed with respect to, evidencing or securing the indebtedness
hereunder, the prevailing party, in addition to all other sums to which it may
be entitled, shall be entitled to reasonable attorneys' fees.

9.10.  Notices. All notices, payments, requests, information and demands which
either party hereto may desire, or may be required to give or make to the other
party shall be given or made to such party by hand delivery or through deposit
in the United States mail, postage prepaid, or by Western Union telegraph
addressed to the address set forth below such party's signature to this
Agreement or to such other address a may be specified from time to time in
writing by either pay to the other.

9.11.  Waiver. Neither the failure nor delay by the Bank in exercising any right
hereunder or under any document, instrument or agreement mentioned herein shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder or under any document, instrument or agreement mentioned herein
preclude other or further exercise thereof or the exercise of any other right;
nor shall any waiver of any right or default hereunder or under any other
document, instrument or agreement mentioned herein constitute a waiver of any
other right or default or constitute a waiver of any other default of the same
or any other term or provision.

9.12.  Conflicting Provisions. To the extent that any of the terms or provisions
contained in this Agreement are inconsistent with those contained in any other
document, instrument or agreement executed pursuant hereto, the terms and
provisions contained herein shall control. Otherwise, such provisions shall be
considered cumulative.

9.13.  Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the Bank's prior
written consent. The Bank may sell, assign or grant participations in all or any
portion of its rights and benefits hereunder. The Borrower agrees that, in
connection with any such sale, grant or assignment, the Bank may deliver to the
prospective buyer, participant or assignee financial statements and other
relevant information relating to the Borrower and any guarantor.
<PAGE>
 
9.14.  Jurisdiction. This Agreement, any notes issued hereunder, the rights of
the parties hereunder to and concerning the Collateral, and any documents,
instruments or agreements mentioned or referred to herein shall be governed by
and construed according to the laws of the State of California, to the
jurisdiction of whose courts the parties hereby submit.

9.15.  Headings. The headings set forth herein are solely for the purpose of
identification and have no legal significance.

9.16.  Entire Agreement This Agreement and all documents, instruments and
agreements mentioned herein constitute the entire and complete understanding of
the parties with respect to the transactions contemplated hereunder. All
previous conversations, memoranda and writings between the parties or pertaining
to the transactions contemplated hereunder that are not incorporated or
referenced in this Agreement or in such documents, instruments and agreements
are superseded hereby.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of
the date first hereinabove written.

BANK:                                           BORROWER

By:___________________________________          By:_____________________________
   Jo-Jo Kochaphum, Authorized Officer             Doreen Chiu, President


   Address:                                     Address:

Oakland Office                                  47375 Fremont Boulevard
2127 Broadway                                   Fremont, CA 94538
Oakland, CA 94612

Source: OneCLE Business Contracts.