Security & Loan Agreement

IMPERIAL BANK
Member FDIC


SECURITY AND LOAN AGREEMENT
(ACCOUNTS RECEIVABLE)


This Agreement is entered into between Alpha Microsystems, a California corporation


(herein called "Borrower") and IMPERIAL BANK (herein called "Bank").


1. Bank hereby commits, subject to all the terms and conditions of this
Agreement and prior to the termination of its commitment as hereinafter
provided, to make loans to Borrower from time to time in such amounts as may
be determined by Bank up to, but not exceeding in the aggregate unpaid
principal balance, the following Borrowing Base:


75% of Eligible Accounts and in no event more than $2,000,000.00


2. The amount of each loan made by Bank to Borrower hereunder shall be debited
to the loan ledger account of Borrower maintained by Bank (herein called
"Loan Account") and Bank shall credit the Loan Account with all loan
repayments made by Borrower. Borrower promises to pay Bank (a) the unpaid
balance of Borrower's Loan Account on demand and (b) on or before the tenth
day of each month, interest on the average daily unpaid balance of the Loan
Account during the immediately preceding month at the rate of two percent (
2.000 %) per annum in excess of the rate of interest which Bank has
announced as its prime lending rate ("Prime Rate") which shall vary
concurrently with any change in such Prime Rate. Interest shall be computed
at the above rate on the basis of the actual number of days during which the
principal balance of the loan account is outstanding divided by 360, which
shall for interest computation purposes be considered one year. Bank at its
option may demand payment of any or all of the amount due under the Loan
Account including accrued but unpaid interest at any time. Such notice may
be given verbally or in writing and should be effective upon receipt by
Borrower. The amount of interest payable each month by Borrower shall not be
less than a minimum monthly charge of $ 250.00 . Bank is hereby authorized
to charge Borrower's deposit account(s) with Bank for all sums due Bank
under this Agreement.


3. Requests for loans hereunder shall be in writing duly executed by Borrower
in a form satisfactory to Bank and shall contain a certification setting
forth the matters referred to in Section 1, which shall disclose that
Borrower is entitled to the amount of loan being requested.


4. As used in this Agreement, the following terms shall have the following
meanings:


A. "Accounts" means any right to payment for goods sold or leased, or to
be sold or to be leased, or for services rendered or to be rendered no
matter how evidenced, including accounts receivable, contract rights,
chattel paper, instruments, purchase orders, notes, drains, acceptances,
general intangibles and other forms of obligations and receivables.


B. "Collateral" means any and all personal property of Borrower which is
assigned or hereafter is assigned to Bank as security or in which Bank
now has or hereafter acquires a security interest.


C. "Eligible Accounts" means all of Borrowers Accounts excluding,
however, (1) all Accounts under which payment is not received within 90
days from any invoice date, (2) all Accounts against which the account
debtor or any other person obligated to make payment thereon asserts any
defense, offset, counterclaim or other right to avoid or reduce the
liability represented by the Account and (3) any Accounts if the account
debtor or any other person liable in connection therewith is insolvent,
subject to bankruptcy or receivership proceedings or has made an
assignment for the benefit of creditors or whose credit standing is
unacceptable to Bank and Bank has so notified Borrower. Eligible
Accounts shall only include such accounts as Bank in its sole discretion
shall determine are eligible from time to time.


5. Borrower hereby assigns to Bank all Borrowers present and future Accounts,
including all proceeds due thereunder, all guaranties and security therefor,
and hereby grants to Bank a continuing security interest in all moneys in
the Collateral Account referred to in Section 6 hereof, as security for any
and all obligations of Borrower to Bank, whether now owing or hereafter
incurred and whether direct, indirect, absolute or contingent. So long as
Borrower is indebted to Bank or Bank is committed to extend credit to
Borrower, Borrower will execute and deliver to Bank such assignments,
including Bank's standard forms of Specific or General Assignment covering
individual Accounts, notices, financing statements, and other documents and
papers as Bank may require in order to affirm, effectuate or further assure
the assignment to Bank of the Collateral or to give any third party,
including the account debtors obligated on the Accounts, notice of Bank's
interest in the Collateral.


6. Until Bank exercises its rights to collect the Accounts pursuant to
paragraph 10, Borrower will collect with diligence ail Borrower's Accounts,
provided that no legal action shall be maintained thereon or in connection
therewith without Bank's prior written consent. Any collection of Accounts
by Borrower, whether in the form of cash, checks, notes, or other
instruments for the payment of money (properly endorsed or assigned where
required to enable Bank to collect same), shall be in trust for Bank, and
Borrower shall keep ail such collections separate and apart from all other
funds and property so as to be capable of identification as the pr ...