Titan Corp · 10-Q · For 6/30/97 · EX-10

Filed On 8/13/97   ·   SEC File 1-06035   ·   Accession Number 32258-97-9

Quarterly Report   ·   Form 10-Q
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Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        10-Q Form                                             15±    76K 
 2: EX-10       Amended and Restated Commercial Loan Agreement        80±   323K 
 3: EX-27       Financial Data Schedule                                1      9K 

EX-10   ·   Amended and Restated Commercial Loan Agreement
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EX-10
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AMENDED AND RESTATED                
COMMERCIAL LOAN AGREEMENT                 

This Amended and Restated Commercial Loan Agreement ("Agreement")               
is made as of May 15, 1997 by and among Imperial Bank, a California banking     
corporation ("Imperial"),  The Sumitomo Bank of California, a California        
banking corporation ("Sumitomo"), The Titan Corporation, a Delaware             
corporation ("Borrower"), and Sumitomo in its capacity as agent for             
Sumitomo and Imperial (the "Agent").  Imperial and Sumitomo are sometimes       
collectively referred to herein as the "Banks."                                 

RECITALS                    

A.     Borrower and Sumitomo entered into that certain Commercial               
Loan Agreement dated August 8, 1994 and subsequently amended pursuant to        
amendments dated May 25, 1995, December 29, 1995, May 9, 1996, September 6,     
1996, October 18, 1996 and March 26, 1997 (collectively, the "Existing          
Agreement").                                                                    

B.     Borrower, Sumitomo and Imperial are entering into this                   
Agreement in order to amend, restate, replace and supersede the Existing        
Agreement in its entirety.                                                      

NOW, THEREFORE, in consideration of the foregoing Recitals, and                 
for other good and valuable consideration, the receipt and sufficiency of       
which is hereby acknowledged, the parties hereby agree as follows:              

1.     REVOLVING LINE OF CREDIT, AMOUNT AND TERMS.                              

Banks agree to make available to Borrower the following line(s) of              
credit and/or credit accommodations on the following terms, covenants and       
conditions:                                                                     

1.1     Revolving Line of Credit Amount.                                        

(a)     Revolving Line of Credit.  During the Availability                      
Period, Banks will provide a line of credit (the "Revolving Line of             
Credit") to Borrower.  The maximum amount of the Revolving Line of Credit       
including the subline facility for letters of credit (the "Total                
Commitment") is Twenty-Four Million Dollars ($24,000,000).  Of the Total        
Commitment, Sumitomo's Commitment is Fourteen Million Dollars ($14,000,000)     
and Imperial's Commitment is Ten Million Dollars ($10,000,000).  Upon           
execution of this Agreement, the respective Commitments of the Banks shall      
be as set forth above.  Under no circumstances shall any Bank be obligated      
to advance more than its particular Commitment.  The respective Commitments     
of the Banks may be assigned pursuant to Section 9.1 hereof.  As used in        
this Agreement, "Pro Rata Share" means, as to any Bank at any time, the         
percentage equivalent (expressed as a decimal, rounded to the ninth decimal     
place) at such time of such Bank's Commitment divided by the Total              
Commitment of all Banks.  Sumitomo's initial Pro Rata Share is .583333333       
and Imperial's initial Pro Rata Share is .416666667.  Borrower's obligation     
to repay the Revolving Line of Credit is evidenced by two promissory notes      
(one in favor of Sumitomo and one in favor of Imperial) substantially in        
the forms of Exhibits A-1 and A-2 attached hereto (collectively, the            
"Revolving Line Notes").                                                        

(b)     Revolving Nature of Line of Credit.  During the                         
Availability Period, Borrower may repay principal amounts and reborrow them     
under the Revolving Line of Credit.                                             

(c)     Subline Facility for Letters of Credit.  The Revolving                  
Line of Credit includes a subline facility for letters of credit.  The          
subline facility for letters of credit  is not to exceed Five Million           
Dollars ($5,000,000).                                                           

(d)     Maximum Loan Balance.  Borrower agrees not to permit                    
the outstanding principal balance of the Revolving Line of Credit plus the      
outstanding amounts of any letters of credit under the subline facility,        
including amounts drawn on letters of credit and not yet reimbursed (such       
sum being referred to herein as the "Loan Balance"), to exceed the Total        
Commitment.                                                                     

(e)     Imperial to Make Payment.  Imperial acknowledges that                   
amounts have previously been drawn under the Revolving Line of Credit.          
Imperial shall pay to the Agent, immediately upon demand by the Agent, for      
payment to Sumitomo, an amount equal to Imperial's Pro Rata Share of the        
outstanding principal balance of all previous advances under the Revolving      
Line of Credit.                                                                 

1.2     Availability Period.  The period under which Borrower may               
draw on the Revolving Line of Credit ("Availability Period") is between the     
date of this Agreement and May 31, 1998 (the "Maturity Date"), unless           
Borrower is in default, in which event Banks need not make any advances.        

1.3     Interest Rates.                                                         

(a)     Interest Rate Absent Optional Interest Rate Election.                   
Unless Borrower elects an Optional Interest Rate as described below, the        
"Interest Rate" shall be Sumitomo's Prime Rate in effect from time to time.     

(b)     Definition of Prime Rate.  The "Prime Rate" equals the                  
rate of interest set from time to time by Sumitomo at its head office in        
San Francisco, California as its Prime Rate.  The Prime Rate is determined      
by Sumitomo as a means of pricing credit extensions to some customers and       
is neither tied to any external rate of interest or index nor is it             
necessarily the lowest rate of interest charged by Sumitomo at any given        
time for any particular class of customers or credit extensions.  Any           
changes in the interest rate resulting from a change in the Prime Rate          
shall take effect without notice on the date specified at the time the          
Prime Rate is set.                                                              

(c)     Optional Interest Rate.  Instead of the interest rate                   
based on Sumitomo's Prime Rate, Borrower may elect to have all or portions      
of the Revolving Line of Credit (during the Availability Period) bear           
interest at the Offshore Rate plus two percent (2.00%), as more fully           
described in Section 1.3(d) below (the "Optional Interest Rate"), during an     
interest period agreed to by Agent and Borrower.  Each interest rate is a       
rate per annum.  Interest will be paid on the last day of each interest         
period and, if the interest period is longer than 30 days, then on the          
first day of each month during the interest period.  At the end of any          
interest period, the interest rate will revert to the rate based on the         
Prime Rate, unless Borrower has designated another Optional Interest Rate       
for that portion.                                                               

(d)     Offshore Rate/Rate Plus Disclosed Spread.  Borrower may                 
elect to have all or portions of the principal balance of the Revolving         
Line of Credit (including, without limitation, amounts representing             
unreimbursed draws under the subline facility letters of credit) bear           
interest at the Offshore Rate plus two percent (2.00%).                         

Designation of an Offshore Rate portion is subject to the following             
requirements:                                                                   

(i)     The interest period during which the Offshore Rate                      
will be in effect will be 30 days, 60 days, 90 days or 180 days                 
as selected by Borrower (except that Borrower may select an                     
interest period of 14 days so long as the Offshore Rate portion                 
is at least $1,000,000).  The last day of the interest period                   
will be determined by Agent using the practices of the offshore                 
dollar inter-bank market.                                                       

(ii)     Each Offshore Rate portion will be for an amount                       
not less than two hundred fifty thousand dollars ($250,000)                     
(other than for an interest period of 14 days, in which event the               
amount may not be less than $1,000,000) and increments of fifty                 
thousand dollars above the minimum.                                             

(iii)     At any given time, Borrower may have no more                          
than five portions of the principal balance of the Revolving Line               
of Credit bearing interest based upon the Offshore Rate.                        

(iv)     The "Offshore Rate" means the interest rate                            
determined by the following formula, rounded upward to the                      
nearest 1/100 of one percent.  (All amounts in the calculation                  
will be determined by Agent as of the first day of the interest                 
period.)                                                                        

Offshore Rate  =        Eurodollar Rate                                         
---------------------------                 
(1.00 - Reserve Percentage)                 

Where,                                                                          

(A)     "Eurodollar Rate" means the interest rate                               
quoted by the Agent's International Department as the "LIBOR                    
rate" applicable for the interest period chosen by Borrower                     
and for borrowings in an amount equal to Sumitomo's Pro Rata                    
Share of the requested borrowing.                                               

(B)     "Reserve Percentage" means the total of the                             
maximum reserve percentages for determining the reserves to                     
be maintained by member banks of the Federal Reserve System                     
for Eurocurrency Liabilities, as defined in the Federal                         
Reserve Board Regulation D.  The percentage will be                             
expressed as a decimal, and will include, but not be limited                    
to, marginal, emergency, supplemental, special, and other                       
reserve percentages.                                                            

(v)     Borrower may not elect an Offshore Rate with                            
respect to any portion of the principal balance of the Revolving                
Line of Credit which is scheduled to be repaid before the last                  
day of the applicable interest period.                                          

(vi)     No portion of the principal balance of the                             
Revolving Line of Credit already bearing interest at the Offshore               
Rate may be converted to a different rate during its interest                   
period.                                                                         

(vii)     Each prepayment of an Offshore Rate portion,                          
whether voluntary, by reason of acceleration or otherwise, will                 
be accompanied by the amount of accrued interest on the amount                  
prepaid, and a prepayment fee equal to the amount (if any) by                   
which:                                                                          

(A)     the additional interest which would have been                           
payable on the amount prepaid had it not been paid until the                    
last day of the interest period, exceeds                                        

(B)     the interest which would have been                                      
recoverable by Banks by placing the amount prepaid on                           
deposit in the offshore dollar market for a period starting                     
on the date on which it was prepaid and ending on the last                      
day of the interest period for such portion.                                    

(C)     Agent will have no obligation to accept an                              
election of an Offshore Rate portion if any of the following                    
described events has occurred and is continuing:                                

(x) Dollar deposits in the principal amount,                                    
and for periods equal to the interest period, of an                             
Offshore Rate portion are not available in the offshore                         
Dollar interbank market; or                                                     

(y)     the Offshore Rate does not accurately                                   
reflect the cost of an Offshore Rate portion.                                   

1.4     Repayment Terms/Revolving Line of Credit.                               

(a)     Except as otherwise provided in Section 1.3(c) hereof,                  
Borrower will pay in arrears on the first day of each calendar month all        
interest accrued on amounts outstanding under the Revolving Line of Credit      
(including, without limitation, all unreimbursed amounts drawn under            
letters of credit) during the immediately preceding calendar month.             

(b)     Except as otherwise provided in Section 1.5(f) hereof                   
with respect to letters of credit having terms extending beyond the             
Maturity Date, Borrower will repay in full all principal, interest and          
other charges outstanding under the Revolving Line of Credit no later than      
the Maturity Date.                                                              

(c)     Any amount bearing interest at an Optional Interest                     
Rate may be repaid at the end of the applicable interest period.                

(d)     Subject to provisions contained elsewhere herein,                       
Borrower may prepay the Revolving Line of Credit in full or in part at any      
time.  The prepayment will be applied first to interest and charges and         
then to the principal outstanding under the Revolving Line of Credit.           

(e)     All payments of principal, interest, fees or other                      
amounts to be made by Borrower under this Agreement shall be made to Agent      
at its office located at 611 West Sixth Street, Los Angeles, California, or     
at such other place as Agent may designate by written notice to Borrower        
and Banks (herein, the "Agent's Office").                                       

1.5     Letter of Credit Subline Facility.  The Revolving Line of               
Credit may be used for financing:  (i) commercial letters of credit (which      
will require drafts payable at sight), or (ii) standby letters of credit,       
in either case with maturities not to extend more than 365 days beyond the      
Maturity Date.  Each commercial letter of credit will be issued by Sumitomo     
pursuant to a completed request for letter of credit in the form of Exhibit     
D hereto (each a "Request for Letter of Credit") delivered by Borrower to       
the Agent.                                                                      

(a)     Each Request for Letter of Credit shall be submitted to                 
the Agent not later than 11:00 a.m., Los Angeles time, at least two (2)         
Banking Days prior to the date upon which the requested letter of credit is     
to be issued.  Upon issuance of a letter of credit, the Agent promptly          
shall notify the Banks of the amount and terms thereof.                         

(b)     Upon the issuance of a letter of credit, each Bank                      
shall be deemed to have purchased a participation therein from Sumitomo in      
an amount equal to that Bank's Pro Rata Share of the face amount of the         
letter of credit.  Without limiting the scope and nature of each Bank's         
participation in any letter of credit, to the extent that Sumitomo has not      
been reimbursed by Borrower for any payment required to be made by Sumitomo     
under any letter of credit, each Bank shall, according to its Pro Rata          
Share, reimburse Sumitomo immediately upon demand for the amount of such        
payment.  The obligation of each Bank to so reimburse Sumitomo shall be         
absolute and unconditional and shall not be affected by the occurrence of       
any Event of Default or any other occurrence or event.  Any such                
reimbursement shall not relieve or otherwise impair the obligation of           
Borrower to reimburse Sumitomo for the amount of any payment made by            
Sumitomo under any letter of credit together with interest in accordance        
with this Agreement.                                                            

(c)     The amount of outstanding letters of credit, including                  
amounts drawn on letters of credit and not yet reimbursed, may not exceed       
at any one time Five Million Dollars ($5,000,000) in the aggregate.             

(d)     Standby letters of credit issued in favor of                            
governmental agencies in lieu of worker's compensation insurance premiums       
shall not exceed Two Hundred Thousand Dollars ($200,000) in the aggregate       
outstanding at any one time.                                                    

(e)     Any sum drawn under a letter of credit shall be added                   
to the principal amount outstanding under this Agreement.  The amount will      
bear interest and be due and payable by Borrower in the same manner as          
other advances under the Revolving Line of Credit, except as provided in        
Section 1.5(f), below.                                                          

(f)     In the event any subline facility letters of credit are                 
outstanding on the Maturity Date, or if an Event of Default occurs,             
Borrower shall immediately prepay all outstanding letters of credit and         
deposit with Agent on the Maturity Date, as cash collateral for the             
reimbursement obligations of Borrower with respect to such letters of           
credit (and Borrower hereby grants to Agent, for the ratable benefit of         
Banks, a security interest in such cash collateral), an amount equal to the     
entire face amount of all outstanding letters of credit, to be applied to       
repay draws under letters of credit as and when made.                           

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

(h)     Borrower will sign Sumitomo's form Application and                      
Security Agreement for Commercial Letter of Credit or Application and           
Agreement for Standby Letter of Credit, as applicable.                          

(i)     Borrower agrees that Agent may automatically charge its                 
checking account for applicable fees, discounts, and other charges relating     
to any letters of credit.                                                       

(j)     Borrower will pay to Agent, for the ratable benefit of                  
Banks, a non-refundable fee equal to 1.5% per annum (times the full term of     
the letter of credit) of the face amount of each standby letter of credit       
issued hereunder, payable fully in advance at the time of issuance and on       
each renewal date (if any).  Borrower will pay to Agent, for the ratable        
benefit of Banks, Sumitomo's standard fees in effect from time to time, as      
determined by Sumitomo, for commercial letters of credit issued under this      
Agreement.                                                                      

(k)     Borrower will pay to Agent, for the ratable benefit of                  
Banks, any issuance and/or other fees that Agent notifies Borrower will be      
charged for issuing and processing letters of credit for Borrower.              

2..     FEES, EXPENSES AND DEPOSITS.                                            

2.1     Fees.                                                                   

(a)     Commitment Fee.  Borrower agrees to pay a Sixty                         
Thousand Dollar ($60,000) commitment fee to Agent, for the ratable benefit      
of Banks, upon execution of this Agreement.                                     

(b)     Unused Commitment Fee.  Borrower agrees to pay to                       
Agent, for the ratable benefit of Banks, a fee on any difference between        
the Total Commitment and the amount of credit Borrower actually uses,           
determined by the weighted average Loan Balance maintained during the           
specified period.  This fee will be calculated at three eighths of one          
percent (.375%) per year, and is due monthly in arrears.  For purposes of       
calculating the foregoing fee, the entire face amount of all issued and         
outstanding letters of credit shall be counted as credit being "actually        
used."                                                                          

2.2     Expenses.                                                               

(a)     Borrower agrees to repay Agent, immediately upon demand                 
by Agent, for Agent's reasonable expenses incurred in connection with this      
Agreement, which may include, without limitation, filing, recording and         
search fees and documentation fees.                                             

(b)     Borrower agrees to reimburse Agent, immediately upon                    
demand by Agent, for any expenses incurred by Agent in the negotiation and      
preparation of this Agreement and any agreement or instrument required by       
this Agreement.  Expenses include, but are not limited to, reasonable           
attorneys' fees and disbursements, including the fees and disbursements of      
outside counsel and any allocated costs of Agent's in-house counsel.            

3..     DISBURSEMENTS, PAYMENTS AND COSTS.                            

3.1     Requests for Credit.  As used herein, any extension of                  
credit which bears interest based upon the Prime Rate is referred to as a       
"Prime Rate Credit" and any extension of credit which bears interest based      
upon the Offshore Rate is referred to as an "Offshore Rate Credit".             
Borrower shall make each request for an extension of credit under the           
Revolving Line of Credit (other than requests for issuance of letters of        
credit under the subline facility) by delivering to Agent an irrevocable        
written request in the form of Exhibit "B", appropriately completed (a          
"Request for Credit"), which specifies, among other things:                     

(i)     The principal amount of the requested extension of                      
credit;                                                                         
(ii)     Whether the requested extension of credit will                         
initially be a Prime Rate Credit or an Offshore Rate Credit;                    

(iii)     If the requested extension of credit is to                            
initially be an Offshore Rate Credit, the interest period                       
selected by Borrower for such extension of credit in accordance                 
with Section 1.3(d)(i); and                                                     

(iv)     The date of the requested extension of credit,                         
which shall be a Banking Day.                                                   

Borrower shall deliver to Agent, at the Agent's Office, a properly              
completed Request for Credit (i) at least three (3) Banking Days before the     
date of the requested extension of credit in case of an Offshore Rate           
Credit, and (ii) not later than 11:00 a.m., Los Angeles time, on the date       
of the requested extension of credit in the case of a Prime Rate Credit.        
The Agent may, in its sole and absolute discretion, permit any request for      
extension of credit to be made by telephone, in which case Borrower shall       
confirm the same by mailing or faxing a written Request for Credit to the       
Agent within 48 hours following the telephonic request.  If Borrower fails      
to deliver to the Agent a written Request for Credit, Borrower hereby           
waives the right to dispute the amount, interest rate or term of any            
extension of credit made pursuant to Borrower's telephonic request.             
Promptly following receipt of a Request for Credit, the Agent shall notify      
each Bank by telephone, telecopier or Telex of the date and amount of the       
requested credit, the applicable interest period (in the case of an             
Offshore Rate Credit), and that Bank's Pro Rata Share of the requested          
credit.  Not later than 1:00 p.m., Los Angeles time, on the date specified      
for any extension of credit, each Bank shall make its Pro Rata Share of the     
requested credit in immediately available funds available to the Agent at       
the Agent's Office.                                                             

3.2     Conversion of Interest Rate on Extensions of Credit.                    
Borrower may convert outstanding Prime Rate Credits into Offshore Rate          
Credits, or existing Offshore Rate Credits into other Offshore Rate             
Credits, in accordance with this Section 3.2.  Borrower shall request any       
such conversion by delivering to Agent an irrevocable written request in        
the form of Exhibit "C", appropriately completed (a "Request for                
Conversion").  Each Request for Conversion shall specify, among other           
things:                                                                         

(i)     The total dollar amount of Prime Rate Credits                           
which are to be converted to an Offshore Rate Credit;                           

(ii)     The total dollar amount and interest period                            
expiration dates of any existing Offshore Rate Credits which are                
to be converted to other Offshore Rate Credits;                                 

(iii)     The interest period selected by Borrower for any newly converted      
Offshore Rate Credits in accordance with Section 1.3(d)(i); and                 

(iv)     The date of the requested conversion, which shall                      
be a Banking Day.                                                               

Borrower shall deliver to Agent, at the Agent's office, a properly              
completed Request for Conversion not later than 11:00 a.m., Los Angeles         
time, at least two (2) Banking Days prior to the first day of the               
applicable interest period as set forth in the Request for Conversion.  The     
Agent may, in its sole and absolute discretion, permit a Request for            
Conversion to be made by telephone, in which case Borrower shall confirm        
the same by mailing or faxing a written Request for Conversion to the Agent     
within 48 hours following the telephonic request.  If Borrower fails to         
make a written Request for Conversion, Borrower hereby waives the right to      
dispute the amount, interest rate or term of any such Offshore Rate Credit.     
Unless Borrower has timely delivered to Agent a Request for Conversion in     
accordance with this Section 3.2 with respect to any existing Offshore Rate     
Credit, such Offshore Rate Credit shall automatically become a Prime Rate       
Credit on the day immediately following the last day of the applicable          
interest period for such Offshore Rate Credit.  With respect to any             
conversion pursuant to this Section 3.2, at or about 1:00 p.m., Los Angeles     
time, two (2) Banking Days before the first day of the requested interest       
period, the Agent shall determine the applicable Offshore Rate (which           
determination shall be conclusive in the absence of manifest error) and         
promptly shall give notice of the same to Borrower and the Banks by             
telephone, telecopier or Telex.  Upon fulfillment of the conditions set         
forth in this Section 3.2, the conversion shall become effective on the         
first day of the requested interest period.                                     

3.3     Agent's Right to Assume Funds Available for Extensions of               
Credit.  Unless the Agent shall have been notified by any Bank at least two     
hours prior to the funding by the Agent of any extension of credit that         
such Bank does not intend to make available to the Agent such Bank's Pro        
Rata Share of the total amount of such extension of credit, the Agent may       
assume that such Bank has made such amount available to the Agent on the        
date of the extension of credit and the Agent may, in reliance upon such        
assumption, make available to Borrower a corresponding amount.  If such         
corresponding amount is not in fact made available to the Agent by such         
Bank, the Agent shall be entitled to recover such corresponding amount on       
demand from such Bank, which demand shall be made in a reasonably prompt        
manner.  If such Bank does not pay such corresponding amount immediately        
upon the Agent's demand therefor, the Agent promptly shall notify Borrower      
and Borrower shall pay such corresponding amount to the Agent within            
five (5) Banking Days after demand.  In the event no Event of Default has       
occurred and is continuing and a Bank does not fund its Pro Rata Share of       
an extension of credit, the other Banks shall increase the amount of their      
funding to cover the Request for Credit, provided that such increased           
funding does not cause any Bank's Pro Rata Share of the Total Commitment to     
be exceeded.  The Agent also shall be entitled to recover from such Bank or     
Borrower, as the case may be, interest on such corresponding amount for         
each day from the date such corresponding amount was made available by the      
Agent to Borrower to the date such corresponding amount is recovered by the     
Agent, at a rate per annum equal to the Interest Rate or the Offshore Rate,     
depending upon whether the extension of credit is a Prime Rate Credit or an     
Offshore Rate Credit.  Nothing herein shall be deemed to relieve any Bank       
from its obligation to fulfill its Pro Rata Share of the Total Commitment       
or to prejudice any rights which the Agent and/or Borrower may have against     
any Bank as a result of any default by such Bank hereunder.                     

3.4     Payments by Borrower.  Each payment by Borrower will be:                

(a)     made at Agent's Office (or such other location as may                   
be selected by Agent from time to time by written notice to Borrower),          

(b)     made for the account of Agent's Office or such other                    
office as may be selected by Agent from time to time,                           

(c)     made in immediately available funds, or such other type                 
of funds reasonably selected by Agent, and                                      

(d)     evidenced by records kept by Agent.                                     

3.5     Telephone Authorization.                                                

(a)     Subject to Section 1.5, Section 3.1 or Section 3.2, as                  
applicable, Agent may, in its sole and absolute discretion, honor               
telephonic requests for extensions of credit, requests for conversion and       
requests for issuance of subline facility letters of credit made by any         
officer of Borrower or by any person or persons so authorized by any            
authorized officer of Borrower, promptly followed up with a completed           
Request for Letter of Credit as provided in Section 1.5, a completed            
Request for Credit as provided in Section 3.1 or a completed Request for        
Conversion as provided in Section 3.2, as applicable.                           

(b)     Proceeds of extensions of credit will be deposited in,                  
and repayments will be withdrawn from, Borrower's account                       
number 058-15052570, or such other account with Agent as may be designated      
in writing by Borrower.                                                         

(c)     Agent will provide written confirmation to Borrower and                 
Banks of transactions made based on telephone instructions.  Borrower           
agrees to notify Agent promptly of any discrepancy between the written          
confirmation and telephone instructions.  If there is a discrepancy and         
Agent has already acted on the telephone instructions, the telephone            
instructions will prevail over the written confirmation.                        

(d)     Borrower and Banks indemnify and hold harmless Agent                    
(including its officers, employees, and agents) from all liability, loss,       
and costs in connection with any act resulting from telephone instructions      
it reasonably believes are made by an officer of Borrower or a person           
authorized by an officer of Borrower.  This indemnity and agreement to hold     
harmless will survive this Agreement's termination.                             

3.6     Direct Debit.                                       

(a)     Borrower agrees that interest and any fees will be                      
deducted automatically on the due date from Borrower's checking account         
number 058-15052570 with Agent.                                                 

(b)     Agent will also debit Borrower's account on the dates                   
any principal payments become due hereunder.  If a due date for any payment     
does not fall on a Banking Day, Agent will debit the account on the first       
Banking Day following the due date.                                             

(c)     Borrower will maintain sufficient funds in the                          
referenced account on the dates Agent enters debits authorized by this          
Agreement in order to cover all such debits by Agent.  If there are             
insufficient funds in the account on the date Agent enters any debit            
authorized by this Agreement, Borrower shall immediately pay such shortfall     
to Agent.                                                                       

3.7     Banking Days.  Unless otherwise provided in this Agreement,             
a "Banking Day" is a day other than a Saturday or a Sunday on which Agent       
is open for business in California.  For Offshore Rate Credits (if any), a      
Banking Day is a day other than a Saturday or a Sunday on which Agent is        
open for business in California and dealing in offshore dollars. 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 applicable Line of      
Credit on the next Banking Day.                                                 

3.8     Taxes.  Borrower will not deduct any taxes from any payments            
made to Agent or Banks hereunder.  If any government authority imposes any      
taxes or charges on any payments made by Borrower, Borrower will pay the        
taxes or charges.  Upon request by Agent, Borrower will confirm that it has     
paid the taxes by giving Agent official tax receipts (or notarized copies)      
within 30 days after the due date.                                              

3.9     Additional Costs.  Borrower will pay Agent, on demand by                
Agent, for Banks' costs or losses relating to this Agreement arising from       
any statute or regulation, or any request or requirement of a regulatory        
agency which is applicable to Banks.  The costs and losses will be              
allocated to the Revolving Line of Credit in a manner determined by Agent,      
using any reasonable method.  The costs include the following:                  

(a)     any reserve or deposit requirements; and                                

(b)     any capital requirements relating to any Bank's assets                  
and commitments for credit.                                                     

3.10     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.                        

3.11     Interest on Late Payments.  At Agent's sole option in each             
instance, any amount not paid when due under this Agreement (including          
interest) shall bear interest from the due date at Sumitomo's Prime Rate        
plus two and one-half percent (2.50%).  This may result in compounding of       
interest.                                                                       

3.12     Default Rate.  Upon the occurrence and during the                      
continuance of any Event of Default, at Agent's sole option Borrower shall      
pay interest on the outstanding principal of the Revolving Line of Credit       
at the rate of interest otherwise provided under this Agreement plus            
two and one-half percent (2.50%) (the "Default Rate").  This will not           
constitute a waiver of any Event of Default.                                    

3.13     Overdrafts.  Subject to the other terms and conditions of              
this Agreement, Agent may, in its sole and absolute discretion, make            
advances under the Revolving Line of Credit to prevent or cover an              
overdraft on any account of Borrower with Sumitomo.  Each such advance will     
accrue interest from the date of the advance or the date on which the           
account is overdrawn, whichever occurs first, in accordance with this           
Agreement.  Each Bank agrees to fund any such advance (and Borrower agrees      
to repay any such advance) at the same times and in the same manner as          
required for any other advances under the Revolving Line of Credit pursuant     
to this Agreement.                                                              

3.14     Overadvances.  If at any time the principal outstanding                
balance of the Revolving Line of Credit (including the undrawn amounts, and     
drawn and unpaid amounts, of all outstanding subline facility letters of        
credit) exceeds the Total Commitment, at Agent's option, that amount shall      
be immediately due and payable by Borrower on demand.                           

4.     CONDITIONS.                                                    

4.1     Initial Extension of Credit.  Agent must have received the              
following items, in form and content reasonably acceptable to Agent, before     
Banks are required to extend any credit to Borrower under this Agreement:       

(a)     Authorizations.  Evidence that the execution, delivery                  
and performance by Borrower of this Agreement and any instrument or             
agreement required under this Agreement have been duly authorized.              

(b)     Revolving Line Notes.  The fully executed Revolving                     
Line Notes.                                                                     

(c)     Insurance.  Evidence of the insurance coverage required                 
by Section 6.22 of this Agreement.                                              

(d)     Legal Opinion.  A written opinion from Borrower's legal                 
counsel in favor of Agent and Banks, covering such matters as Agent may         
require.  The legal counsel and the terms of the opinion must be reasonably     
acceptable to Agent.                                                            

(e)     Good Standing.  Certificates of good standing (i) for                   
Borrower from its state of incorporation and from California and Virginia,      
and (ii) for such Guarantors (as defined in Section 4.1(f)) as Agent may        
require, from their respective states of incorporation.                         

(f)     Ancillary Documents.  Fully executed originals of  this                 
Agreement and the following additional documents (collectively, the             
"Ancillary Documents"):  (i) the Revolving Line Notes, (ii) a continuing        
guaranty (the "Guaranty") executed by such wholly-owned subsidiaries of         
Borrower (each a "Guarantor") as Agent may require, (iii) the Security          
Documents (as defined in Section 7.3 below, and (iv) such additional            
documents as the Agent may reasonably require.                                  

(g)     Commitment Fee.  Agent shall have received payment by                   
Borrower of the $60,000 commitment fee pursuant to Section 2.1(a).              

(h)     Agent's Legal Fees and Costs.  Agent shall have                         
received payment by Borrower of Agent's legal fees and costs pursuant to        
Section 2.2(b).                                                                 

(i)     Crestar Demand and Release Documents.  Agent shall have                 
received (i) an irrevocable written demand from Crestar setting forth the       
amount required to pay the existing Crestar debt in full, and (ii) UCC-2        
termination statements (or evidence satisfactory to the Banks that such         
termination statements are forth-coming) executed by Crestar and such other     
release documents as the Banks may require to release all liens in favor of     
Crestar and any other lender (except the Banks) with respect to all             
property covered by the Security Documents.                                     

4.2     Conditions to Each Extension of Credit.  Before each                    
extension of credit, including the first:                                       

(a)     The representations and warranties of Borrower                          
hereunder must be true and correct.                                             

(b)     Any other items that Agent reasonably requires must be                  
delivered to Agent.                                                             

5.     REPRESENTATIONS AND WARRANTIES.                                

When Borrower signs this Agreement, and until Banks are repaid in               
full, Borrower makes the following representations and warranties.  Each        
Request for Credit, Request for Conversion and Request for Letter of Credit     
executed by Borrower shall constitute a renewed representation and warranty     
by Borrower.                                                                    

5.1     Organization of Borrower.  Borrower is a corporation duly               
formed and existing under the laws of the State of Delaware.                    

5.2     Authorization.  This Agreement, those Ancillary Documents to            
which Borrower is a party and any other instrument or agreement required to     
be executed by Borrower hereunder or thereunder, are within Borrower's          
powers, have been duly authorized, and do not conflict with any of              
Borrower's organizational papers.                                               

5.3     Enforceable Agreement.  This Agreement and those Ancillary              
Documents to which Borrower is a party are legal, valid and binding             
agreements of Borrower, enforceable against Borrower in accordance with         
their terms, and any instrument or agreement required hereunder or              
thereunder, when executed and delivered, will be similarly legal, valid,        
binding and enforceable.                                                        

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

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

5.6     Financial Information.  To the best of Borrower's knowledge             
and belief, all financial statements, information and other data which may      
have been or which may be hereafter submitted by the Borrower to Agent or       
any Bank accurately reflect and have been or will be prepared in accordance     
with generally accepted accounting principles consistently applied and          
accurately represent the financial condition, or, as applicable, the other      
information disclosed therein.                                                  

To the best of Borrower's knowledge and belief, since the date of               
Borrower's December 31, 1996 financial statements, there has been no            
material adverse change in the assets, operations, business prospects or        
financial condition of Borrower.                                                

5.7     Lawsuits.  Except as have been disclosed to the Banks 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 or operations.                     

5.8     Permits, Franchises.  Borrower possesses all permits,                   
memberships, franchises, contracts and licenses required and all trademark      
rights, trade name rights, patent rights and fictitious name rights             
necessary to enable it to conduct the business in which it is now engaged       
and where the absence of which would cause a material adverse effect on the     
Borrower's financial condition or operations.                                   

5.9     Other Obligations.  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 Banks prior to the date hereof.               

5.10     Income Tax Returns.  Borrower has filed all required tax               
returns and has no knowledge of any material pending assessments or             
adjustments of its income tax for any year.                                     

5.11     No Event of Default.  No event has occurred which is, or               
with notice or lapse of time or both would be, an Event of Default under        
this Agreement or any of the Ancillary Documents.                               

5.12     ERISA Plans.                                                           

(a)     Borrower has fulfilled its obligations, if any, under                   
the minimum funding standards of ERISA and the Code with respect to each        
Plan and is in compliance in all material respects with the presently           
applicable provisions of ERISA and the Code, and has not incurred any           
liability with respect to any Plan under Title IV of ERISA.                     
(b)     No reportable event has occurred under Section 4043(b)                  
of ERISA for which the PBGC requires 30 day notice.                             

(c)     As of the date of this Agreement, no action by Borrower                 
to terminate or withdraw from any Plan has been taken and no notice of          
intent to terminate a Plan has been filed under Section 4041 of ERISA.          

(d)     No proceeding has been commenced with respect to a Plan                 
under Section 4042 of ERISA, and no event has occurred or condition exists      
which might constitute grounds for the commencement of such a proceeding.       

(e)     The following terms have the meanings indicated for                     
purposes of this Agreement:                                                     

(i)     "Code" means the Internal Revenue Code of 1986, as                      
amended from time to time.                                                      

(ii)     "ERISA" means the Employee Retirement Income Act                       
of 1974, as amended from time to time.                                          

(iii)     "PBGC" means the Pension Benefit Guaranty                             
Corporation established pursuant to Subtitle A of Title IV of                   
ERISA.                                                                          

(iv)     "Plan" means any employee pension benefit plan                         
maintained or contributed to by Borrower and insured by the                     
Pension Benefit Guaranty Corporation under Title IV of ERISA.                   

6..     COVENANTS.                                                              

Borrower agrees, so long as credit is available under this                      
Agreement and until Banks are repaid in full:                                   

6.1     Use of Proceeds.  To use the proceeds of the Revolving Line             
of Credit only for working capital, letters of credit and other general         
corporate purposes in the ordinary course of Borrower's business.               

6.2     Financial Information.  To provide directly to each Bank the            
following financial information and statements and such additional              
information as may be reasonably requested by Agent or any Bank from time       
to time:                                                                        

(a)     Within 100 days after Borrower's fiscal year end, a                     
copy of Borrower's annual audited financial report and Securities and           
Exchange Commission Form 10K Report, all opined to without either a "going      
concern" qualification or an "adverse" qualification, along with a              
compliance certificate in a form satisfactory to Agent.                         

(b)     Within 55 days of each fiscal quarter end, a copy of                    
Borrower's Securities and Exchange Commission Form 10Q Report, along with a     
compliance certificate in a form satisfactory to Agent.                         

(c)     Within 15 days after Borrower's receipt thereof, an                     
annual CPA management letter.                                                   

(d)     Copies of Borrower's Form 10-K Annual Report, Form 10-Q                 
Quarterly Report and any Form 8-K Report within 10 days after the date of       
filing with the Securities and Exchange Commission.                             

(e)     Borrower will submit annual projections, prepared by                    
quarter, for each new fiscal year within 30 days of the end of the old          
fiscal year.  Such projections will detail management's best estimate of        
revenues, expenses and balance sheet categories and will be presented in        
the customary form of Balance Sheet, Income Statement and Cash Flow             
Statement.                                                                      

6.3     Quick Assets.  To maintain on a consolidated basis as of the            
last day of each quarter, a ratio of Quick Assets to current liabilities of     
at least 1.15:1.00.  As used herein, "Quick Assets" means cash, short-term      
cash investments, net trade receivables and marketable securities not           
classified as long-term investments.                                            

6.4     Net Worth.  To maintain on a consolidated basis as of the               
last day of each calendar quarter, a Net Worth in an amount at least equal      
to Seventy-Nine Million Dollars ($79,000,000).  As used herein, "Net Worth"     
means the gross book value of Borrower's assets plus the Subordinated Debt      
less total liabilities including, without limitation, accrued and deferred      
income taxes, and any reserves against assets.  As used in this Agreement,      
the "Subordinated Debt" means Borrower's 8 1/4% convertible subordinated        
debentures due November 1, 2003, subordinated to Banks in a manner              
acceptable to Agent.                                                            

6.5     Total Liabilities to Tangible Net Worth.  To maintain on a              
consolidated basis as of the last day of each quarter, a ratio of Total         
Liabilities to Tangible Net Worth not exceeding 1.15:1.00.  As used herein,     
(i) "Total Liabilities" means the sum of current liabilities plus long term     
liabilities, excluding the Subordinated Debt, and (ii) "Tangible Net Worth"     
means book net worth minus intangible assets (such as goodwill, patents,        
trademarks, trade names, organization expense, treasury stock, unamortized      
debt discount and expense, deferred research and development costs,             
capitalized software costs, license fees, deferred marketing expenses, and      
other like intangibles, and monies due from affiliates, officers, directors     
or shareholders of Borrower) plus the Subordinated Debt.  Deferred income       
taxes shall not be deemed intangible assets.                                    

6.6     Profitability.  To maintain on a consolidated basis a                   
positive net income before taxes and extraordinary items and a positive net     
income after taxes and extraordinary items on an annual basis and not to        
experience two consecutive quarterly losses in aggregate of greater than        
Five Hundred Thousand Dollars ($500,000), beginning with the fiscal quarter     
ending March 31, 1997.                                                          

6.7     Interest Coverage Ratio.  To maintain on a consolidated                 
basis for the two quarters ending March 31, 1997, a minimum Interest            
Coverage Ratio of 1.00:1.00, for the three quarters ending June 30, 1997, a     
minimum Interest Coverage Ratio of 1.15:1.00, and for the four quarters         
ending September 30, 1997, a minimum Interest Coverage Ratio of 1.25:1.00.      
As used herein, "Interest Coverage Ratio" means, for any period, the ratio    
of all EBIT to interest expenses.  "EBIT" is defined as the sum of net          
income (or net loss), plus income tax provision, plus gross interest            
expense, minus extraordinary income/gains, plus extraordinary non-cash          
expenses/losses, minus gains (or plus losses) on sales/dispositions of          
fixed assets.                                                                   

6.8     Fixed Charge Coverage Ratio.  To maintain on a rolling four-            
quarter basis starting with fiscal year end December 31, 1997, a Fixed          
Charge Ratio of at least 1.15:1.00.  As used herein, (i) "Fixed Charge          
Coverage Ratio" for any period means the sum of EBITDA, less capital            
expenditures (net of purchase money financing), less cash taxes payable,        
less cash dividends payable, less cash stock repurchases divided by the sum     
of interest expense for that period, plus scheduled payments under all          
indebtedness including capital leases for that period, and (ii) "EBITDA" is     
defined as the sum of net income (or net loss), plus income tax provision,      
plus gross interest expense, plus depreciation, plus non-cash amortization,     
minus extraordinary income/gains, plus extraordinary non-cash                   
expenses/losses, minus gains (or plus losses) on sales/dispositions of          
fixed assets.                                                                   

6.9     Other Debts.  Not to have outstanding or incur (or for any              
of Borrower's wholly-owned subsidiaries to have outstanding or incur) any       
direct or contingent debts or lease obligations (other than existing debts      
and credit facilities with Sumitomo), or become liable (or for any              
wholly-owned subsidiary of Borrower to become liable) for the debts of          
others without Agent's written consent.  This does not prohibit:                

(a)     Acquiring goods, supplies, merchandise, services, or                    
other payables 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)     Debt and lease obligations reflected in the                             
December 31, 1996 fiscal year end financial statement of Borrower submitted     
to Agent.                                                                       

(e)     Other debts and lease obligations, not to exceed                        
$5,000,000 in the aggregate outstanding at any time.                            

6.10     Other Liens.  Not to create, assume, or allow any security             
interest or lien (including judicial liens) on property Borrower (or any        
wholly-owned subsidiary of Borrower) now or later owns, except:                 

(a)     Liens or security interests in favor of Sumitomo.                       

(b)     Liens for taxes not yet due.                                            

(c)     Liens disclosed in the December 31, 1996 fiscal year                    
end financial statement of Borrower submitted to Agent.                         

          (d)     Additional purchase money security interests in real
property or in personal property (including equipment and equipment leases)     
that do not exceed, in the aggregate, $5,000,000 at any time.                   

6.11     Capital Expenditures.  Not to spend or incur obligations               
(including the total amount of any capital leases) for more than Seven          
Million Dollars ($7,000,000) in any fiscal year.                                

6.12     Dividends/Distributions.  Not to declare or pay any cash               
dividends or cash distributions on any of its shares of capital stock,          
except up to $875,000 (in the aggregate) in a specific fiscal year on its       
preferred stock.                                                                

6.13     Loans to Officers.  Not to make any loans, advances, stock             
purchases, capital contributions or other extensions of credit to any of        
Borrower's executives, officers, directors, shareholders or employees (or       
any relatives of any of the foregoing) in excess of $75,000 to one              
individual or $250,000 in total in any fiscal year (other than those            
reflected in Borrower's December 31, 1996 fiscal year end financial             
statements).                                                                    

6.14     Acquisitions of Businesses or Assets.  Not to, without the             
prior written consent of all Banks (which consent shall not be unreasonably     
withheld), acquire or purchase a business or its assets for a                   
consideration, including assumption of debt, in excess of One Million           
Dollars ($1,000,000).                                                           

6.15     Notices to Agent.  To promptly notify Agent in writing of:             

(a)     any lawsuit with aggregate claims over Five Hundred                     
Thousand Dollars ($500,000) filed against Borrower; and all lawsuits filed      
against Borrower which in the aggregate involve claims totaling $3,000,000      
or more.                                                                        

(b)     any substantial dispute between Borrower and any                        
government authority;                                                           

(c)     any failure to comply with this Agreement;                              

(d)     any material adverse change in Borrower's business                      
prospects, financial condition or operations;                                   

(e)     any change in Borrower's name, address, or legal                        
structure; and                                                                  

(f)     the occurrence of any Event of Default.                                 

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

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

6.18     Compliance with Laws.  To comply with the laws, regulations,           
and orders of any government body with authority over Borrower's business       
(including any fictitious name statute and all statutes regarding the           
processing, manufacture, storage, transportation, sale or use of hazardous      
or toxic materials).                                                            

6.19     Preservation of Rights.  To maintain and preserve all                  
rights, privileges, and franchises Borrower now has necessary to carry on       
Borrower's business.                                                            

6.20     Maintenance of Properties.  To make any repairs, renewals,             
or replacements to keep Borrower's properties in good working condition.        

6.21     Cooperation.  To take any action reasonably requested by               
Agent to carry out the intent of this Agreement.                                
6.22     Insurance.                                                             

(a)     General Business Insurance.  To maintain insurance as                   
is usual for the business it is in.  To maintain insurance satisfactory to      
Agent as to amount, nature and carrier covering property damage (including      
loss of use and occupancy) to any of Borrower's properties, public              
liability insurance including coverage for contractual liability, product       
liability and workers' compensation, and any other insurance which is usual     
for Borrower's business.                                                        

(b)     Evidence of Insurance.  Upon the request of Agent, to                   
deliver to Agent a copy of each insurance policy, or, if permitted by           
Agent, a certificate of insurance listing all insurance in force.               

6.23     Operating/Business Accounts.  Establish and maintain with              
Sumitomo Borrower's primary operating and business accounts and other           
banking services associated with the operation of Borrower's business,          
including without limitation any demand deposit accounts.                       

6.24     Additional Negative Covenants.  Not to, without the prior              
written consent of all Banks (which consent shall not be unreasonably           
withheld):                                                                      

(a)     engage in any business activities substantially                         
different from Borrower's present business.                                     

(b)     liquidate or dissolve Borrower's business.                              

(c)     enter into any consolidation, merger, pooling of                        
interest, or other combination (other than partnerships or joint ventures       
within the limitations specified in subparagraph (j) below).                    

(d)     sell, lease, transfer or otherwise dispose of (i) any                   
patents or other intellectual property of Borrower, or (ii) any other part      
of Borrower's business or Borrower's assets except in the ordinary course       
of Borrower's business or only to the extent that the aggregate book value      
of  personal property assets involved in all such sales, leases, transfers      
or other dispositions do not exceed $500,000 in any one fiscal year.  As a      
singular exception to the foregoing, Borrower shall be permitted to sell up     
to 80% of its stock in Servnow Nettechnologies, Inc., a Delaware                
corporation, so long as such stock sale does not result in a breach of any      
of Borrower's other covenants under this Agreement.                             

(e)     sell, transfer or otherwise dispose of any assets for                   
less than fair market value.                                                    

(f)     enter into sale and leaseback agreements covering more                  
than $1,000,000 of Borrower's fixed or capital assets during any one fiscal     
quarter.  The amount of Borrower's obligations under any sale/leaseback         
agreements shall be counted as "other debt and lease obligations" for           
purposes of computing the $5,000,000 cap under Section 6.9(e) hereof.           

(g)     voluntarily suspend its business for more than three                    
days in any thirty day period.                                                  

(h)     purchase shares of its capital stock in exchange for                    
cash if such purchase exceeds (in the aggregate when combined with all such     
other purchases made during that fiscal year) $2,000,000.                       

(i)     enter into any transaction with an affiliate on terms                   
less favorable than those available to Borrower from entities or persons        
not affiliated with Borrower.                                                   

(j)     enter into any partnerships or joint ventures in any                    
fiscal year where the aggregate of all amounts which Borrower will or may       
be required to contribute to such partnerships or joint ventures, plus all      
amounts which Borrower may be liable to pay in connection therewith, shall      
exceed $1,000,000.                                                              

     6.25     ERISA Plans.  To give prompt written notice to Agent of:

(a)     The occurrence of any reportable event under                            
Section 4043(b) of ERISA for which the PBGC requires 30 day notice.             

(b)     Any action by Borrower to terminate or withdraw from a                  
Plan or the filing of any notice of intent to terminate under Section 4041      
of ERISA.                                                                       

(c)     Any notice of noncompliance made with respect to a Plan                 
under Section 4041(b) of ERISA.                                                 

(d)     The commencement of any proceeding with respect to a                    
Plan under Section 4042 of ERISA.                                               

7.     SECURITY DOCUMENTS.                                                      

7.1     Existing Security Documents.  In connection with the                    
Existing Agreement, Borrower executed in favor of Sumitomo (i) that certain     
Pledge Agreement dated September 6, 1996, (ii) that certain Security            
Agreement dated September 6, 1996, (iii) that certain Patent Collateral         
Assignment dated September 6, 1996, as supplemented by the Supplement to        
Patent Collateral Assignment dated December 3, 1996, (iv) UCC-1 Financing       
Statement dated August 30, 1996 and filed September 3, 1996 as file number      
9625060451 in Sacramento, California, as amended by a form UCC-2 amendment      
dated September of 1996 and filed September 16, 1996 as file number             
96263C0234 and by a form UCC-2 amendment dated December 3, 1996 and filed       
December 30, 1996 as file number 96366C0270 in Sacramento, California, and      
(v) UCC-1 Financing Statement dated August 30, 1996 and filed September 4,      
1996 as file number 9609047846 in the office of the Virginia Secretary of       
State.  Various wholly-owned subsidiaries of Borrower also executed             
security documents in favor of Sumitomo in connection with the Existing         
Agreement including (i) that certain Security Agreement executed by Titan       
Information Systems Corporation dated September 6, 1996, (ii) that certain      
Patent Collateral Assignment dated September 6, 1996 executed by Titan          
Information Systems Corporation, and (iii) UCC-1 Financing Statement dated      
August 30, 1996 executed by Titan Information Systems Corporation and filed     
September 3, 1996 as file number 9625060446 in Sacramento, California, as       
amended by UCC-2 Amendment dated September of 1996 and filed September 16,      
1996 as file number 96263C0229 in Sacramento, California.  All documents        
referenced in this Section 7.1 are collectively referred to herein as the       
"Existing Security Documents".                                                  

7.2     Additional Security Documents.   Eldyne, Inc. and Unidyne               
Corporation will be executing security agreements dated as of even date         
herewith in favor of Agent, for the benefit of Banks, in connection with        
this Agreement.  In addition, Borrower, Titan Information Systems               
Corporation, the Agent, and the Banks will be amending the Existing             
Security Documents pursuant to an Amendment to Existing Security Documents      
dated as of even date herewith.                                                 

7.3     Definition of Security Documents.  As used in this                      
Agreement, "Security Documents" means and includes (i) the various              
documents referenced in Sections 7.1 and 7.2, above, (ii) any other             
security agreement which may now or hereafter be executed by Borrower or        
any other entity in favor of Agent, for the benefit of Banks, to secure         
performance of Borrower's obligations under this Agreement, and (iii) any       
modifications or amendments to any of the foregoing documents.  Borrower        
intends that each Security Document (as the same may be modified or amended     
from time to time) shall grant to Agent, for the ratable benefit of Banks,      
a security interest in the items of collateral referenced in such Security      
Document.                                                                       

8..     DEFAULT.                                                                

8.1     Events of Default.  The occurrence of any one or more of the            
following events shall constitute an "Event of Default":                        

(a)     Failure to Pay.  Borrower fails to make a payment under                 
this Agreement when due and such failure shall continue for more than two       
Banking Days after written notice from Agent to Borrower of the existence       
of such Event of Default.                                                       

(b)     Non-Compliance.  Borrower fails to meet the conditions                  
of, or fails to perform any obligation under:                                   

(i)     this Agreement,                                                         

(ii)     any Ancillary Document or any other agreement made                     
in connection with this Agreement, or                                           

(iii)     any other agreement Borrower has with (x)                             
Sumitomo or any affiliate of Sumitomo, or (y) Imperial or any                   
affiliate of Imperial;                                                          

and any such failure shall continue for more than fifteen (15) days (or         
such other cure period as is specified in this Agreement or any such other      
agreement as to such default, if less than 15 days) after written notice        
from the applicable lender to Borrower of the existence of such Event of        
Default.                                                                        

(c)     Other Defaults.  Any default occurs under any agreement                 
in connection with any credit Borrower has obtained from any other creditor     
or which Borrower has guaranteed if the default consists of failing to make     
a payment when due or gives the other creditor the right to accelerate the      
obligation.                                                                     

(d)     False Information.  Any representation or warranty                      
under this Agreement or any agreement, instrument or certificate executed       
pursuant to this Agreement or in connection with any transaction                
contemplated hereby shall prove to have been false or misleading in any         
material respect when made or when deemed to have been made.                    

(e)     Bankruptcy.  Borrower files a bankruptcy petition, a                    
bankruptcy petition is filed against Borrower or Borrower makes a general       
assignment for the benefit of creditors.  The default will be deemed cured      
if any bankruptcy petition filed against Borrower is dismissed within a         
period of sixty (60) days after the filing; provided, however, that Banks       
will not be obligated to extend any additional credit to Borrower during        
any bankruptcy period.                                                          

(f)     Receivers.  A receiver or similar official is appointed                 
for Borrower's business, or the business is terminated.                         

(g)     Lawsuits.  Any lawsuit or lawsuits are filed on behalf                  
of one or more trade creditors against Borrower in an aggregate amount of       
two million dollars ($2,000,000) or more and such lawsuit or lawsuits are       
not dismissed or fully bonded within ten (10) calendar days after service       
of process upon Borrower.                                                       

(h)     Judgments.  Any judgments or arbitration awards are                     
entered against Borrower and, absent procurement of a stay of execution,        
such judgment or award remains unbonded or unsatisfied for ten (10)             
calendar days after the date of entry; or Borrower enters into any              
settlement agreement with respect to any litigation or arbitration, in an       
aggregate amount of five hundred thousand dollars ($500,000) or more in         
excess of any insurance coverage, unless the Banks determine that the           
Borrower has adequate available liquid resources to pay such settlement.        

(i)     Government Action.  Any government authority takes                      
action that adversely affects Borrower's  financial condition or ability to     
repay.                                                                          

(j)     Default under Guaranty or Subordination Agreement.  Any                 
guaranty, subordination agreement, security agreement, deed of trust, or        
other document required by this Agreement is violated, revoked or no longer     
in effect.                                                                      

(k)     Material Adverse Change.  A material adverse change                     
occurs in Borrower's financial condition, properties or prospects, or           
Borrower's ability to repay its obligations hereunder.                          

(l)     ERISA Plans.  The occurrence of a reportable event with                 
respect to a Plan which is likely to result in the termination of such Plan     
for purposes of Title IV of ERISA, or could reasonably be expected, to          
subject Borrower to any tax, penalty or liability (or any combination of        
the foregoing) which, in the aggregate, would have an adverse effect on the     
financial condition of Borrower with respect to a Plan.                         

8.2     Remedies.  Upon and after the occurrence of an Event of                 
Default, Banks, acting through Agent, shall have all of the following           
rights and remedies:                                                            

(a)     All obligations and indebtedness hereunder may, at the                  
option of Agent and without demand, notice, or legal process of any kind,       
be declared, and immediately shall become, due and payable;                     

(b)     The indebtedness under the Revolving Line Notes shall                   
bear interest at the Default Rate;                                              

(c)     All of the rights and remedies of a creditor under                      
California law or other applicable law, all of which rights and remedies        
shall be cumulative, and not exclusive, to the extent permitted by law, in      
addition to any other rights and remedies contained in this Agreement and       
in any of the documents or agreements executed in connection herewith; and      

(d)     All other rights and remedies which Banks may have in                   
law or equity.                                                                  

8.3     Costs and Expenses.  Upon the occurrence of any Event of                
Default, Agent and Banks shall be entitled to recover from Borrower all         
costs, expenses, and reasonable attorneys' fees (including any allocated        
costs of in-house counsel) in connection with the administering or              
enforcing of this Agreement, whether or not an action is filed.                 

9..     PARTICIPATIONS; AGENCY; AMENDMENT, CONSENTS AND WAIVERS; OTHER
EXTENSIONS OF CREDIT.                                                           

9.1     Binding Effect; Assignment; Addition and Substitution of                
Banks.                                                                          

(a)     As used herein, an "Institutional Lender" means any                     
bank or other institution which makes commercial loans on an ongoing basis      
in the ordinary course of its business.  Each Bank may, with the prior          
written consent of Agent (which consent shall not be unreasonably               
withheld), at any time sell to one or more banks or other entities              
("Participants") participating interests in all or any portion of its           
Commitments and advances or any other interest of such Bank hereunder and       
under the Ancillary Documents (in respect of any Bank, its "Credit              
Exposure").  If the proposed Participant is not an Institutional Lender,        
and provided no Event of Default has occurred and is continuing, then           
Borrower's prior written consent (which consent shall not be unreasonably       
withheld) shall also be required as a condition to the sale.  In the event      
of any such sale by a Bank of participating interests to a Participant,         
such Bank's obligations under this Agreement shall remain unchanged, such       
Bank shall remain solely responsible for the performance thereof, and           
Borrower and Agent shall continue to deal solely and directly with such         
Bank in connection with such Bank's rights and obligations under this           
Agreement.  Each Bank shall from time to time upon request of Borrower          
notify Borrower of the identity of any Participants with respect to its         
Credit Exposure hereunder; provided, however, that failure to provide such      
notice will not affect the validity of such participation.  Borrower agrees     
that if amounts outstanding under this Agreement are due or unpaid, or          
shall have been declared or shall have become due and payable upon the          
occurrence of an Event of Default, each Participant shall be deemed to have     
the right of set-off in respect of its participating interest in amounts        
owing under this Agreement to the same extent as if the amount of its           
participating interest were owing directly to it as a Bank under this           
Agreement, provided that such right of set-off shall be subject to the          
obligation of such Participant to share with the Banks, and the Banks agree     
to share with such Participant, as provided in Section 9.4.  Each Bank          
agrees that any agreement between such Bank and any Participant in respect      
of such participating interest shall not restrict such Bank's right to          
approve or agree to any amendment, restatement, supplement or other             
modification to, waiver of, or consent under, this Agreement except to          
extend the Maturity Date, reduce the rate of interest or fees, extend the       
time of payment of interest thereon, reduce the principal amount thereof,       
or release all or substantially all of any collateral.                          

(b)     Notwithstanding any other provision contained in this                   
Agreement or any of the Ancillary Documents to the contrary, any Bank may,      
upon written notice to Agent, Borrower and the other Banks, pledge all or       
any portion of its Revolving Line Note to any Federal Reserve Bank or the       
United States Treasury as collateral security pursuant to Regulation A of       
the Board of Governors of the Federal Reserve System and any Operating          
Circular issued by such Federal Reserve Bank, provided that any payment in      
respect of such pledged Revolving Line Note made by Borrower to or for the      
account of the pledging Bank in accordance with the terms of this Agreement     
shall satisfy Borrower's obligations hereunder in respect to such pledged       
Revolving Line Note to the extent of such payment.  No such pledge shall        
release the pledging Bank from its obligations hereunder.                       

(c)     Borrower authorizes each Bank to disclose to any                        
Participant any and all financial information in such Bank's possession         
concerning Borrower and any subsidiary of Borrower which has been delivered     
to such Bank by Borrower or Agent pursuant to this Agreement or which has       
been delivered to such Bank by Borrower or Agent in connection with such        
Bank's credit evaluation of Borrower prior to entering into this Agreement,     
provided such Participant executes a confidentiality agreement in form and      
content reasonably acceptable to Borrower.                                      

(d)     For so long as any Bank shall be in default of its                      
obligation to fund its applicable Pro Rata Share of any extension of            
credit, no fees shall be accrued by or paid to such Bank.                       

9.2     Agent.                                                                  

(a)     Appointment.  Each Bank hereby designates and appoints                  
Sumitomo as its agent under this Agreement and the Ancillary Documents, and     
each Bank hereby irrevocably authorizes Agent to take such action or to         
refrain from taking such action on its behalf under the provisions of this      
Agreement and the Ancillary Documents and to exercise such powers as are        
set forth herein or therein, together with such other powers as are             
reasonably incidental thereto.  Agent agrees to act as such on the express      
conditions contained in this Section 9.2.  The provisions of this               
Section 9.2 are solely for the benefit of Agent and Banks, and Borrower         
shall not have any rights as a third party beneficiary of any of the            
provisions hereof.  In performing their functions and duties under this         
Agreement, Agent shall act solely as agent of the Banks and does not assume     
and shall not be deemed to have assumed any obligation toward or                
relationship of agency or trust with or for Borrower.  Agent may perform        
any of its duties hereunder, or under the Ancillary Documents, by or            
through its agents or employees.                                                

(b)     Nature of Duties as Agent.  Agent shall have no duties                  
or responsibilities except those expressly set forth in this Agreement.         
The duties of Agent shall be mechanical and administrative in nature.           
Agent shall not have by reason of this Agreement a fiduciary relationship       
with any Bank.  Nothing in this Agreement, the Ancillary Documents or any       
other agreements, express or implied, is intended to or shall be construed      
to impose upon Agent any obligations in respect of this Agreement, the          
Ancillary Documents or any other agreement except as expressly set forth        
herein or therein.  Each Bank shall make its own independent investigation      
of the financial condition and affairs of Borrower and its subsidiaries in      
connection with the extensions of credit hereunder and shall make its own       
appraisal of the creditworthiness of Borrower and its subsidiaries, and         
Agent shall have no duty or responsibility, either initially or on a            
continuing basis, to provide any Bank with any credit or other information      
with respect thereto (other than financial information received by it in        
accordance herewith), whether coming into its possession before the date        
hereof or at any time or times thereafter.  If Agent seeks the consent or       
approval of any Bank to the taking or refraining from taking any action         
hereunder, then Agent shall send notice thereof to each Bank.                   

(c)     Neither Agent nor any of its officers, directors,                       
employees or agents shall be liable to any Bank for any action taken or         
omitted by it hereunder or under any other agreement, or in connection          
herewith or therewith, except that Agent shall be obligated on the terms        
set forth herein for performance of its express obligations hereunder, and      
Agent shall be liable with respect to its own gross negligence or willful       
misconduct.  Agent shall not be liable for any apportionment or                 
distribution of payments made by it in good faith and if any such               
apportionment or distribution is subsequently determined to have been made      
in error the sole recourse of any Bank to whom payment was due but not made     
shall be to recover from the other Banks any payment in excess of the           
amount to which it is determined to be entitled (and such other Banks           
hereby agree to return to such Bank any such erroneous payments received by     
them).  In performing its functions and duties hereunder, Agent shall           
exercise the same care which it would in dealing with loans for its own         
account, but Agent shall not be responsible to any Bank for any recitals,       
statements, representations or warranties herein or for the execution,          
effectiveness, genuineness, validity, enforceability, collectibility, or        
sufficiency of this Agreement or any other agreement, or the transactions       
contemplated hereby or thereby, or for the financial condition of Borrower.     
Agent shall not be required to make any inquiry concerning either the         
performance or observance of any of the terms, provisions or conditions of      
this Agreement or any agreement or the financial condition of Borrower, or      
the existence or possible existence of any Event of Default or any event        
which, with the giving of notice or the passage of time, or both, would         
constitute an Event of Default.  Agent may at any time request instructions     
from Banks with respect to any actions or approvals which by the terms of       
this Agreement or of any agreement Agent is permitted or required to take       
or to grant, and if such instructions are promptly requested, Agent shall       
be absolutely entitled to refrain from taking any action or to withhold any     
approval and shall not be under any liability whatsoever to any person or       
entity for refraining from any action or withholding any approval under         
this Agreement or any other agreement until it shall have received such         
instructions from all Banks.  Without limiting the foregoing, no Bank shall     
have any right of action whatsoever against Agent as a result of Agent          
acting or refraining from acting under this Agreement, any of the Ancillary     
Documents or any other agreement in accordance with the instructions of all     
Banks.                                                                          

(d)     Agent shall be entitled to rely upon any written                        
notices, statements, certificates, orders or other documents or any             
telephone message or other communication (including any writing, telex,         
telecopy or telegram) believed by it in good faith to be genuine and            
correct and to have been signed, sent or made by the proper person or           
entity, and with respect to all matters pertaining to this Agreement, the       
Ancillary Documents or any other agreement and its duties hereunder or          
thereunder, upon advice of counsel selected by it.  Agent shall be entitled     
to rely upon the advice of legal counsel, independent accountants and other     
experts selected by Agent in its sole discretion.                               

(e)     Banks will reimburse and indemnify Agent for and                        
against any and all liabilities, obligations, losses, damages, penalties,       
actions, judgments, suits, costs, expenses, advances or disbursements of        
any kind or nature whatsoever which may be imposed on, incurred by, or          
asserted against Agent in any way relating to or arising out of this            
Agreement, the Ancillary Documents or any other agreement or any action         
taken or omitted by Agent under this Agreement, the Ancillary Documents or      
any other agreement, in proportion to each Bank's Pro Rata Share; provided,     
however, that no Bank shall be liable for any portion of such liabilities,      
obligations, losses, damages, penalties, actions, judgments, suits, costs,      
expenses, advances or disbursements resulting from Agent's gross negligence     
or willful misconduct.  The obligations of the Banks under this Section 9.2     
shall survive the payment in full of all extensions of credit hereunder and     
the termination of this Agreement.                                              

(f)     With respect to the extensions of credit made by it,                    
Agent shall have and may exercise the same rights and powers hereunder and      
is subject to the same obligations and liabilities as and to the extent set     
forth herein for any other Bank.  The term "Banks" or any similar terms         
shall, unless the context clearly otherwise indicates, include Agent in its     
individual capacity as a Bank.  Agent may lend money to, and generally          
engage in any kind of banking, trust or other business with Borrower as if      
it were not acting as Agent pursuant hereto.                                    

(g)     (i)     Agent may resign from the performance of all its                
functions and duties hereunder at any time by giving at least                   
thirty (30) Banking Days' prior written notice to Borrower and                  
Banks.  Such resignation shall take effect upon the acceptance by               
a successor Agent of appointment pursuant to clause (g)(ii) below               
or as otherwise provided below.                                                 

(ii)     Upon any such notice of resignation pursuant to                        
clause (g)(i) above, the Banks shall, upon receipt of Borrowers'                
prior consent, which shall not unreasonably be withheld, appoint                
a successor Agent.  If a successor Agent shall not have been so                 
appointed within said thirty (30) Banking Day period, the                       
retiring Agent, upon notice to Borrower, shall then appoint a                   
successor Agent who shall serve as Agent until such time, if any,               
as Banks, upon receipt of Borrowers' prior written consent, which               
shall not be unreasonably withheld, appoint a successor Agent as                
provided above.                                                                 

(iii)     Upon the acceptance by a successor Agent of                           
any appointment as an Agent under this Agreement and the                        
Ancillary Documents, such successor Agent shall thereupon succeed               
to and become vested with all the rights, powers, privileges and                
duties of the retiring Agent, and the retiring Agent shall be                   
discharged from its duties and obligations under this Agreement.                
After any retiring Agent's resignation as Agent under this                    
Agreement, the provisions of this Section 9.2 shall inure to its                
benefit as to any actions taken or omitted to be taken by it                    
while it was Agent under this Agreement.                                        

(h)     (i)     Banks hereby irrevocably authorize Agent, at its                
option and in its discretion, to release any lien granted to or                 
held by Agent upon any property covered by this Agreement or the                
Security Documents (A) upon termination of the Total Commitment                 
and payment and satisfaction of all liabilities of Borrower                     
hereunder; or (B) constituting property being sold or disposed of               
if Borrower certifies to Agent that the sale or disposition is                  
made in compliance with the provisions of this Agreement (and                   
Agent may rely in good faith conclusively on any such                           
certificate, without further inquiry); or (C) constituting                      
property leased to Borrower under a lease which has expired or                  
been terminated in a transaction permitted under this Agreement                 
or is about to expire and which has not been, and is not intended               
by such Borrower to be, renewed or extended.  Upon request by                   
Agent at any time, any Bank will confirm in writing the Agent's                 
authority to release particular types or items of property                      
covered by this Agreement or the Ancillary Documents pursuant to                
this Section 9.2(h)(i) or Section 9.3.                                          

(ii)     Without in any manner limiting Agent's authority                       
to act without any specific or further authorization or consent                 
by the Banks (as set forth in Section 9.2(h)(i)), each Bank                     
agrees to confirm in writing, upon request by Borrower, the                     
authority to release any property covered by this Agreement and                 
the Security Documents conferred upon Agent under clauses (A)                   
through (C) of Section 9.2(h)(i) and under Section 9.3.  So long                
as no Event of Default is then continuing, upon receipt by Agent                
of confirmation from the Banks of their authority to release any                
particular item or types of property covered by this Agreement or               
the Ancillary Documents, and upon at least five (5) Banking Days'               
prior written request by Borrower, Agent shall (and is hereby                   
irrevocably authorized by the Banks to) execute such documents as               
may be necessary to evidence the release of the liens granted to                
Agent for the benefit of the Banks herein or pursuant hereto upon               
such collateral; provided, however, that (A) Agent shall not be                 
required to execute any such document on terms which, in Agent's                
opinion, would expose Agent to liability or create any obligation               
or entail any consequence other than the release of such liens                  
without recourse or warranty, and (B) such release shall not in                 
any manner discharge, affect or impair the obligations of                       
Borrower hereunder.                                                             

(iii)     Agent shall have no obligation whatsoever to                          
any Bank or any other person or entity to assure that the                       
property covered by this Agreement or any of the Security                       
Documents exists or is owned by Borrower, or is cared for,                      
protected or insured or has been encumbered or that the liens                   
granted to Agent pursuant to the Security Documents have been                   
properly or sufficiently or lawfully created, perfected,                        
protected or enforced or are entitled to any particular priority,               
or to exercise at all or in any particular manner or under any                  
duty of care, disclosure or fidelity, or to continue exercising,                
any of the rights, authorities and powers granted or available to               
Agent in this Section 9.2(h) or elsewhere in this Agreement or in               
any of the Security Documents, it being understood and agreed                   
that in respect of the property covered by any of the Security                  
Documents or any act, omission or event related thereto, Agent                  
may act in any manner Agent deems appropriate, in its sole                      
discretion, given Agent's own interest in property covered by any               
of the Security Documents as one of the Banks and that Agent                    
shall have no duty or liability whatsoever to any of the other                  
Banks; provided, that Agent shall exercise the same care which it               
would exercise in dealing with loans for its own account.                       

(i)     Each Bank hereby appoints each other Bank as agent for                  
the purpose of perfecting security interests in assets which, in accordance     
with Article 9 of the Uniform Commercial Code in any applicable                 
jurisdiction, can be perfected only by possession.  Should any Bank (other      
than Agent) obtain possession of any such collateral, such Bank shall           
notify Agent thereof and, promptly upon Agent's request therefor, shall         
deliver such collateral to Agent or in accordance with Agent's                  
instructions.  Each Bank agrees that it will not have any right                 
individually to enforce or seek to enforce any right or remedy under this       
Agreement or any of the Security Documents or to realize upon any               
collateral securing any extensions of credit hereunder, it being understood     
and agreed that such rights and remedies may be exercised only by Agent.        

9.3     Amendments; Consents and Waivers for Certain Actions.  No               
amendment, modification, termination or waiver of any provision of this         
Agreement or consent to any departure by Borrower therefrom, shall in any       
event be effective unless the same shall be in writing and signed by the        
Agent and Borrower; provided, that no amendment, modification, termination      
or waiver shall, unless in writing and signed by all Banks or, in the case      
of subsection (a) below, the affected Bank, do any of the following:            

(a)     increase the Commitment of any Bank;                                    

(b)     reduce the principal of, rate of interest on or fees                    
payable with respect to any extensions of credit hereunder;                     

(c)     postpone the Maturity Date or any date fixed for any                    
payment with respect to any amount of principal, interest or fees with          
respect to any extensions of credit hereunder;                                  

(d)     amend or waive any of the covenants contained in                        
Article 6 hereof, or this Section 9.3; or                                       

(e)     consent to the assignment or other transfer by Borrower                 
of any of its rights and obligations under this Agreement or any of the         
Ancillary Documents.                                                            

Each amendment, modification, termination or waiver shall be effective only     
in the specific instance and for the specific purpose for which it was          
given.  No amendment, modification, termination or waiver shall be required     
for Agent to accept from the Borrower additional collateral.  No notice to      
or demand on Borrower not required by the terms hereof in any case shall        
entitle Borrower to any other or further notice or demand in similar or         
other circumstances.                                                            

9.4     Set Off and Sharing of Payments.  In addition to any rights             
now or hereafter granted under applicable law and not by way of limitation      
of any such rights, upon the occurrence and during the continuance of any       
Event of Default, each Bank is hereby authorized by Borrower at any time or     
from time to time, with reasonably prompt subsequent notice to Borrower         
(any prior or contemporaneous notice being hereby expressly waived) to set      
off and to appropriate and to apply any and all (a) balances (including,        
without limitation, all account balances, whether provisional or final and      
whether or not collected or available) held by such Bank at any of its          
offices for the account of Borrower (regardless of whether such balances        
are then due to Borrower) and (b) other property held or owing by such Bank     
to or for the credit or for the account of Borrower, against and on account     
of any amounts owed by Borrower hereunder which are not paid when due.          

9.5     Other Extensions of Credit From Banks to Borrower or                    
Subsidiaries.  Imperial acknowledges that Borrower presently has in place       
certain other credit facilities with Sumitomo associated with the operation     
of Borrower's business.  Other than such existing Sumitomo credit               
facilities (and the credit being extended to Borrower pursuant to this          
Agreement), in no event shall Sumitomo or Imperial extend credit or make        
loans of any nature to Borrower (or to any subsidiary of Borrower) unless       
all Banks have consented in writing to such proposed extension of credit or     
loan.                                                                           

10..     MISCELLANEOUS.                                                         

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

10.2     California Law.  This Agreement is governed by California              
law without reference to its conflict of laws principles.                       

10.3     Successors and Assigns.  This Agreement is binding on                  
Borrower's, Agent's and Banks' successors and assignees.  Borrower agrees       
that it may not assign this Agreement without the prior written consent of      
Agent and Banks.  Bank may sell participations in or assign these loans, or     
any portion thereof, and may exchange financial information about Borrower      
with actual or potential participants or assignees subject to appropriate       
and mutually agreed upon confidentiality restrictions.  If a participation      
is sold or any portion of the loans is assigned, the purchaser will have        
the right of set-off against Borrower.                                          

10.4     Severability; Waivers.  If any part of this Agreement is not           
enforceable, the rest of the Agreement may be enforced.  No failure on the      
part of Agent to exercise, and no delay in exercising, any right, power, or     
remedy under this Agreement shall operate as a waiver thereof; nor shall        
any single or partial exercise of any right under this Agreement preclude       
any other or further exercise thereof or the exercise of any other right.       
Any consent or waiver under this Agreement must be in writing.  If Agent        
waives a default, it may enforce a later default.                               

10.5     Costs and Expenses.  In addition to the recovery of costs              
and expenses upon an occurrence of an Event of Default, if Agent incurs         
expenses in connection with the preparation, administering or enforcing of      
this Agreement, Borrower shall pay Agent all such costs and reasonable          
attorneys' fees, including any allocated costs of in-house counsel.             

10.6     Entire Agreement.  This Agreement and the Ancillary                    
Documents, collectively:                                                        

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

(b)     replace any prior oral or written agreements between                    
Agent, Banks and Borrower concerning this credit; and                           

(c)     are intended by Agent, Banks and 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.             

10.7     Notices.  Except as otherwise expressly provided elsewhere             
in this Agreement or in the Ancillary Documents:  (a) all notices,              
requests, demands, directions and other communications provided for             
hereunder or under any of the Ancillary Documents must be in writing and        
must be mailed, telecopied or personally delivered to the appropriate party     
at the address set forth on the signature pages of this Agreement or, as to     
any party, at any other address as may be designated by it in a written         
notice sent to all other parties in accordance with this Section 10.7; and      
(b) any notice, request, demand, direction or other communication given by      
telecopier, must be confirmed within 48 hours by letter mailed or delivered     
to the appropriate party at its respective address.  Except as otherwise        
expressly provided elsewhere herein or in any Ancillary Document, if any        
notice, request, demand, direction or other communication required or           
permitted hereunder or under any Ancillary Document is given by mail it         
will be effective on the earlier of receipt or the third calendar day after     
deposit in the United States mail with first class or airmail postage           
prepaid; if given by telecopier, upon electronic confirmation of receipt,       
and if given after 4:00 p.m., Los Angeles time, effective on the next           
Banking Day; or if given by personal delivery, when delivered.                  

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

10.9     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.                                                                      

10.10     Further Assurances.  Borrower shall, at its expense and               
without expense to Agent, do, execute and deliver such further acts and         
documents as Agent from time to time reasonably requires to assure Agent        
the rights created or intended to be created by this Agreement, and for         
carrying out the intention or facilitating the performance of the terms of      
this Agreement or any document executed in connection with this Agreement.      

10.11     Hazardous Waste Indemnification.  Borrower will                       
indemnify and hold harmless Agent and Banks from any loss or liability          
directly or indirectly arising 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 Borrower's property or operations     
or property leased to 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 Agent, each Bank,     
their parents and subsidiaries and all of their directors, officers,            
employees, agents, successors, attorneys and assigns.  For these purposes,      
the term "hazardous substances" means any substance which is or becomes         
designated as "hazardous" or "toxic" under any federal, state or local law.     
This indemnity will survive repayment of Borrower's obligations hereunder.    

Upon demand by Agent, Borrower will defend any investigation,                   
action or proceeding alleging the presence of any hazardous substance in        
any such location, which affects any of Borrower's property or operations       
or property leased to Borrower or which is brought or commenced against         
Agent, whether alone or together with Borrower or any other person, all at      
Borrower's own cost and by counsel to be approved by Agent in the exercise      
of its reasonable judgment.  If Borrower fails to so defend the                 
investigation, action, or proceeding, then Agent may elect to conduct its       
own defense at the expense of Borrower.                                         

10.12     Waiver of Jury Trial.  The parties to this Agreement                  
acknowledge that jury trials often entail additional expenses and delays        
not occasioned by nonjury trials.  The parties to this Agreement further        
agree and stipulate that a fair trial may be had before a state or federal      
judge by means of a bench trial without a jury.  In view of the foregoing,      
and as a specifically negotiated provision of this Agreement, each party to     
this Agreement hereby expressly waives any right to trial by jury of any        
claim, demand, action or cause of action (1) arising under this Agreement       
or any other instrument, document or agreement executed or delivered in         
connection herewith, or (2) in any way connected with or related or             
incidental to the dealings of the parties hereto or any of them with            
respect to this Agreement or any other instrument, document or agreement        
executed or delivered in connection herewith, or the transactions related       
hereto or thereto, in each case whether now existing or hereafter arising,      
and whether sounding in contract or tort or otherwise; and each party           
hereby agrees and consents that any such claim, demand, action or cause of      
action shall be decided by court trial without a jury, and that any party       
to this Agreement may file an original counterpart or a copy of this            
section with any court as written evidence of the consent of the parties        
hereto to the waiver of their right to trial by jury.                           

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

"Borrower"                                                                      

THE TITAN CORPORATION, a Delaware corporation                                   

By:     /s/________________________________                                     

_Eric DeMarco, Sr. V.P. & CFO______                                 
[Printed Name and Title]                                            

Address where notices to Borrower are to be sent:                               

3033 Science Park Road                                                          
San Diego, CA  92121                                                            
Attn:  Eric DeMarco, CFO                                                        
Telecopier:     (619) 552-9471                                                  
Telephone:     (619) 552-9536                                                   

"Banks"                                                                         

THE SUMITOMO BANK OF CALIFORNIA, a California                                   
banking corporation, in its individual capacity                                 

By:     /s/_________________________________                                    
Sajeda Simjee, Vice President                                                   

Address where notices to Sumitomo are to be sent:                               

The Sumitomo Bank of California                                                 
20100 Magnolia Street                                                           
Huntington Beach, CA 92646                                                      
Attn:  Manager                                                                  
Telecopier: (714) 968-4959                                                      
Telephone: (714) 965-5560                                                       

IMPERIAL BANK, a California banking corporation                                 

By:     /s/_________________________________                                    
Tim Bubnack, Vice President                                         

Address where notices to Imperial are to be sent:                               

Imperial Bank                                                                   
701 "B" Street, Suite 600                                                       
San Diego, CA 92101                                                             
Attn.:     Mr. Tim Bubnack, Vice President                                      
Telecopier: (619) 234-2234                                                      
Telephone: (