AMENDMENT TO LOAN AGREEMENT

March 12, 2001


Barrett Business Services, Inc.
March 12, 2001
Page 3


BARRETT BUSINESS SERVICES, INC.
4724 SW Macadam Avenue
Portland, OR 97201

Dear Mike:

This letter amendment (this "Amendment") is to confirm the changes agreed
upon between WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") and BARRETT
BUSINESS SERVICES, INC. ("Borrower") to the terms and conditions of that certain
letter agreement between Bank and Borrower dated as of May 31, 2000, as amended
from time to time (the "Agreement"). For valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree
that the Agreement shall be amended as follows to reflect said changes.

1. The Agreement is hereby amended by deleting "Fifteen Million Dollars
($15,000,000.00)" as the maximum principal amount available under the Line of
Credit, and by substituting for said amount "Thirteen Million Dollars
($13,000,000.00)," with such change to be effective upon the execution and
delivery to Bank of a promissory note substantially in the form of Exhibit A
attached hereto (which promissory note shall replace and be deemed the Line of
Credit Note defined in and made pursuant to the Agreement) and all other
contracts, instruments and documents required by Bank to evidence such change.

2. Paragraph I.4 is hereby amended by adding thereto the following,
as the first subparagraph thereof:

"As security for all indebtedness of Borrower to Bank under the Line
of Credit, Borrower hereby grants to Bank a lien of not less than first
priority in all its rights to payment from customers and accounts
receivable arising from services rendered or to be rendered, whether or
not the same has been earned by performance, all rights under any
contracts it has or may have with its customers, all its general
intangibles directly associated with only the foregoing, and proceeds of
all of the foregoing."

3. Paragraph V.9 is hereby deleted in its entirety, and the
following substituted therefor:

"9. Financial Condition. Maintain Borrower's financial
-------------------
condition as follows using generally accepted accounting principles
consistently applied and used consistently with prior practices (except
to the extent modified by the definitions herein):

(a) Current Ratio as of the end of each fiscal quarter not at any
time less than 1.10 to 1.0, with "Current Ratio" defined as total current
assets divided by total current liabilities.

(b) EBITDA not less than $5,750,000.00 as of each fiscal quarter
end, determined on a trailing four quarters basis including the current
quarter then ended, with "EBITDA" defined as net income before tax plus
interest expense (net of capitalized

1
Barret Business Services, Inc.
March 12 2001
Page 2

interest expense), depreciation expense and amortization expense for the
trailing four quarters, including the current quarter then ended.

(c) Funded Debt to EBITDA Ratio not more than 2.25 to 1.0 as of each
fiscal quarter end, with "Funded Debt" defined as all borrowed funds plus
the amount of all capitalized lease obligations of Borrower, "EBITDA" as
defined above, and "Funded Debt to EBITDA Ratio" defined as Funded Debt
divided by EBITDA.

(d) EBITDA Coverage Ratio not less than 1.50 to 1.0 as of each
fiscal quarter end, with "EBITDA" as defined above, and with "EBITDA
Coverage Ratio" defined as EBITDA divided by the aggregate of (i) total
interest expense for the trailing four quarters, including the current
quarter then ended, plus (ii) scheduled principal payments on long-term
debt for the trailing four quarters, including the current quarter then
ended.

(e) Outstanding Line Liabilities not greater than sixty-five percent
(65%) of Borrower's trade accounts receivable as of each fiscal quarter
end, with "Outstanding Line Liabilities" defined as outstanding borrowings
under the Line of Credit plus the face amount of outstanding Letters of
Credit ."

4. Paragraph V.10 is hereby deleted in its entirety, and the
following substituted therefor:

"10. Other Indebtedness. Create, incur, assume or permit to exist
any indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured, liquidated
or unliquidated, joint or several, except (a) the liabilities of Borrower
to Bank, (b) any other liabilities of Borrower existing as of, and
disclosed to Bank prior to, the date hereof, (c) unsecured liabilities of
Borrower to sellers of companies acquired by Borrower, the total of which
shall not exceed an aggregate of $3,500,000.00, and (d) purchase money
indebtedness for equipment or real estate."

5. Paragraph V.14 is hereby deleted in its entirety, and the
following substituted therefor:

"14. Pledge of Assets. Not mortgage, pledge, grant or permit to
exist a security interest in, or lien upon, all or any portion of
Borrower's assets now owned or hereafter acquired, except (a) any of the
foregoing in favor of Bank or which are existing as of, and disclosed to
Bank in writing prior to, the date hereof, (b) purchase money security
interests securing purchase money indebtedness permitted hereunder, and
(c) other security interests for the purchase or lease of tangible assets
securing an aggregate principal amount not to exceed $25,000.00."

6. Except as specifically provided herein, all terms and conditions of the
Agreement remain in full force and effect, without waiver or modification. All
terms defined in the Agreement shall have the same meaning when used herein.
This Amendment and the Agreement shall be read together, as one document.

7. Borrower hereby remakes all representations and warranties contained in
the Agreement and reaffirms all covenants set forth therein. Borrower further
certifies that as of the date of Borrower's acknowledgment set forth below there
exists no default or defined event of default under the Agreement or any
promissory note or other contract, instrument or document

Barret Business Services, Inc.
March 12 2001
Page 3

executed in connection therewith, nor any condition, act or event which with the
giving of notice or the passage of time or both would constitute such a default
or defined event of default.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK AFTER
OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE
ENFORCEABLE.

Your acknowledgment of this Amendment shall constitute acceptance of the
foregoing terms and conditions.

Sincerely,

WELLS FARGO BANK,
NATIONAL ASSOCIATION


By: /s/ Julie Wilson
---------------------
Julie Wilson
Vice President

Acknowledged and accepted as of March 20, 2001:


BARRETT BUSINESS SERVICES, INC.


By: /s/ Michael D. Mulholland
----------------------------
Michael D. Mulholland
Vice President-Finance


REVOLVING LINE OF CREDIT NOTE

$13,000,000.00 Portland, Oregon
March 12, 2001

FOR VALUE RECEIVED, the undersigned BARRETT BUSINESS SYSTEMS, INC. ("Borrower")
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
at its office at 1300 S. W. Fifth Avenue, T-13, Portland, Oregon, or at such
other place as the holder hereof may designate, in lawful money of the United
States of America and in immediately available funds, the principal sum of
Thirteen Million Dollars ($13,000,000.00), or so much thereof as may be advanced
and be outstanding, with interest thereon, to be computed on each advance from
the date of its disbursement as set forth herein.

DEFINITIONS:

As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:

(a) "Business Day" means any day except a Saturday, Sunday or any other
day on which commercial banks in Oregon are authorized or required by law to
close.

(b) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for one (1), two (2), or three (3) months, as designated by Borrower,
during which all or a portion of the outstanding principal balance of this Note
bears interest determined in relation to LIBOR; provided however, that no Fixed
Rate Term may be selected for a principal amount less than Five Hundred Thousand
Dollars ($500,000.00); and provided further, that no Fixed Rate Term shall
extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would
end on a day which is not a Business Day, then such Fixed Rate Term shall be
extended to the next succeeding Business Day.

(c) "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) and determined pursuant to the following formula:

LIBOR = Base LIBOR
--------------------------------
100% - LIBOR Reserve Percentage

(i) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

(ii) "LIBOR Reserve Percentage" means the reserve percentage prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
"Eurocurrency

-1-

Liabilities" (as defined in Regulation D of the Federal Reserve Board, as
amended), adjusted by Bank for expected changes in such reserve percentage
during the applicable Fixed Rate Term.

(d) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

INTEREST:

(a) Interest. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) either
(i) at a fluctuating rate per annum one and seven-tenths percent (1.7%) below
the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum
determined by Bank to be one percent (1%) above LIBOR in effect on the first day
of the applicable Fixed Rate Term. When interest is determined in relation to
the Prime Rate, each change in the rate of interest hereunder shall become
effective on the date each Prime Rate change is announced within Bank. With
respect to each LIBOR selection hereunder, Bank is hereby authorized to note the
date, principal amount, interest rate and Fixed Rate Term applicable thereto and
any payments made thereon on Bank's books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.

(b) Selection of Interest Rate Options. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR selection, (A)
if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option
but without obligation to do so, accepts Borrower's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance or
the principal amount to which such Fixed Rate Term applied.

(c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately
upon demand, in addition to any other amounts due or to become due hereunder,
any and all (i) withholdings, interest equalization taxes, stamp taxes or other
taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any

-2-

manner to LIBOR, and (ii) future, supplemental, emergency or other changes in
the LIBOR Reserve Percentage, assessment rates imposed by the Federal Deposit
Insurance Corporation, or similar requirements or costs imposed by any domestic
or foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central
bank or other governmental authority and related in any manner to LIBOR to the
extent they are not included in the calculation of LIBOR. In determining which
of the foregoing are attributable to any LIBOR option available to Borrower
hereunder, any reasonable allocation made by Bank among its operations shall be
conclusive and binding upon Borrower.

(d) Payment of Interest. Interest accrued on this Note shall be payable on
the first day of each month, commencing April 1, 2001.

(e) Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:


(a) Borrowing and Repayment. Borrower may from time to time during the
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced
hereunder by the holder hereof less the amount of principal payments made hereon
by or for any Borrower, which balance may be endorsed hereon from time to time
by the holder. The outstanding principal balance of this Note shall be due and
payable in full on May 31, 2001.

(b) Advances. Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the oral or written request of (i)
William W. Sherertz, Jr. or Michael D. Mulholland, any one acting alone, who are
authorized to request advances and direct the disposition of any advances until
written notice of the revocation of such authority is received by the holder at
the office designated above, or (ii) any person, with respect to advances
deposited to the credit of any deposit account of any Borrower, which advances,
when so deposited, shall be conclusively presumed to have been made to or for
the benefit of each Borrower regardless of the fact that persons other than
those authorized to request advances may have authority to draw against such
account. The holder shall have no obligation to determine whether any person
requesting an advance is or has been authorized by any Borrower.

(c) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.


-3-

PREPAYMENT:

(a) Prime Rate. Borrower may prepay principal on any portion of this
----------
Note which bears interest determined in relation to the Prime Rate at any
time, in any amount and without penalty.

(b) LIBOR. Borrower may prepay principal on any portion of this Note
-----
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of One Hundred Thousand Dollars ($100,000.00); provided however,
that if the outstanding principal balance of such portion of this Note is less
than said amount, the minimum prepayment amount shall be the entire outstanding
principal balance thereof. In consideration of Bank providing this prepayment
option to Borrower, or if any such portion of this Note shall become due and
payable at any time prior to the last day of the Fixed Rate Term applicable
thereto by acceleration or otherwise, Borrower shall pay to Bank immediately
upon demand a fee which is the sum of the discounted monthly differences for
each month from the month of prepayment through the month in which such Fixed
Rate Term matures, calculated as follows for each such month:

(i) Determine the amount of interest which would have accrued each
month on the amount prepaid at the interest rate applicable to
such amount had it remained outstanding until the last day of the
Fixed Rate Term applicable thereto.

(ii) Subtract from the amount determined in (i) above the amount of
interest which would have accrued for the same month on the
amount prepaid for the remaining term of such Fixed Rate Term at
LIBOR in effect on the date of prepayment for new loans made for
such term and in a principal amount equal to the amount prepaid.

(iii) If the result obtained in (ii) for any month is greater than
zero, discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum two percent (2%) above
the Prime Rate in effect from time to time (computed on the basis of a 360-day
year, actual days elapsed). Each change in the rate of interest on any such past
due prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.

EVENTS OF DEFAULT:

The occurrence of any of the following shall constitute an "Event of
Default" under this Note:

(a) The failure to pay any principal, interest, fees or other charges when
due hereunder or under any contract, instrument or document executed in
connection with this Note.

-4-

(b) The filing of a petition by or against any Borrower, any guarantor of
this Note or any general partner or joint venturer in any Borrower which is a
partnership or a joint venture (with each such guarantor, general partner and/or
joint venturer referred to herein as a "Third Party Obligor") under any
provisions of the Bankruptcy Reform Act, Title 11 of the United States Code, as
amended or recodified from time to time, or under any similar or other law
relating to bankruptcy, insolvency, reorganization or other relief for debtors;
the appointment of a receiver, trustee, custodian or liquidator of or for any
part of the assets or property of any Borrower or Third Party Obligor; any
Borrower or Third Party Obligor becomes insolvent, makes a general assignment
for the benefit of creditors or is generally not paying its debts as they become
due; or any attachment or like levy on any property of any Borrower or Third
Party Obligor.

(c) The death or incapacity of any individual Borrower or Third Party
Obligor, or the dissolution or liquidation of any Borrower or Third Party
Obligor which is a corporation, partnership, joint venture or other type of
entity.

(d) Any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of any contract, instrument or
document pursuant to which any Borrower or Third Party Obligor has incurred any
obligation for borrowed money, any purchase obligation, or any other liability
of any kind to any person or entity, including the holder; provided, however,
that any cure period applicable to such default has expired, and with respect to
a default under any obligation to any person or entity other than Bank, the
amount of the debts or other liabilities in default exceeds $2,000,000.00 in the
aggregate.

(e) Any financial statement provided by any Borrower or Third Party
Obligor to Bank proves to be incorrect, false or misleading in any material
respect.

(f) Any sale or transfer of all or a substantial or material part of the
assets of any Borrower or Third Party Obligor other than in the ordinary course
of its business.

(g) Any violation or breach of any provision of, or any defined event of
default under, any addendum to this Note or any loan agreement, guaranty,
security agreement, deed of trust, mortgage or other document executed in
connection with or securing this Note, which, if such violation or breach is
curable, in not cured within the earlier to occur of (i) 30 days after the
occurrence thereof or (ii) any applicable cure period expressly provided in such
document.

MISCELLANEOUS:

(a) Remedies. Upon the occurrence of any Event of Default, the holder of
this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the

-5-

foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion brought
by Bank or any other person) relating to any Borrower or any other person or
entity.

(b) Obligations Joint and Several. Should more than one person or
-----------------------------
entity sign this Note as a Borrower, the obligations of each such Borrower
shall be joint and several.

(c) Governing Law. This Note shall be governed by and construed in
-------------
accordance with the laws of the State of Oregon.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK AFTER
OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE
ENFORCEABLE.


IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.

BARRETT BUSINESS SERVICES, INC.


By: /s/ Michael D. Mulholland
--------------------------
Michael D. Mulholland
Vice President-Finance


CONTINUING SECURITY AGREEMENT:
RIGHTS TO PAYMENT


1. GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned BARRETT BUSINESS SERVICES, INC. ("Debtor"), hereby grants and
transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") a security interest
in all its rights to payment from customers and accounts receivable arising from
services rendered or to be rendered, whether or not the same has been earned by
performance, all rights under any contracts it has or may have with its
customers, and all its general intangibles directly associated with only the
foregoing (collectively called "Collateral"), now existing or at any time
hereafter and prior to the termination hereof arising, together with whatever is
receivable or received when any of the Collateral or proceeds thereof are sold,
collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, including without limitation, all rights to payment
with respect to any cause of action affecting or relating to any of the
foregoing (hereinafter called "Proceeds").

2. OBLIGATIONS SECURED. The obligations secured hereby are the payment
and performance of: (a) all present and future Indebtedness of Debtor to Bank;
(b) all obligations of Debtor and rights of Bank under this Agreement; and (c)
all present and future obligations of Debtor to Bank of other kinds. The word
"Indebtedness" is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations and liabilities of Debtor, or any of them,
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether Debtor may
be liable individually or jointly with others, or whether recovery upon such
Indebtedness may be or hereafter becomes unenforceable.

3. TERMINATION. This Agreement will terminate upon the performance of
all obligations of Debtor to Bank, including without limitation, the payment of
all Indebtedness of Debtor to Bank, and the termination of all commitments of
Bank to extend credit to Debtor, existing at the time Bank receives written
notice from Debtor of the termination of this Agreement.

4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans
hereunder. Any money received by Bank in respect of the Collateral may be
deposited, at Bank's option, into a non-interest bearing account over which
Debtor shall have no control, and the same shall, for all purposes, be deemed
Collateral hereunder.

5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Bank that: (a) Debtor is the owner and has possession or control of the
Collateral and Proceeds; (b) Debtor has the right to grant a security interest
in the Collateral and Proceeds; (c) all Collateral and Proceeds are genuine,
free from liens, adverse claims, setoffs, default, prepayment, defenses and
conditions precedent of any kind or character, except the lien created hereby or
as otherwise agreed to by Bank, or as heretofore disclosed by Debtor to Bank, in
writing; (d) all statements contained herein and, where applicable, in the
Collateral are true and complete in all material respects; (e) no financing
statement covering any of the Collateral or Proceeds, and naming any secured
party other than Bank, is on file in any public office; (f) all persons
appearing to be obligated on Collateral and Proceeds

-1-

have authority and capacity to contract and are bound as they appear to be; and
(g) all Collateral and Proceeds comply with all applicable laws concerning form,
content and manner of preparation and execution, including where applicable
Federal Reserve Regulation Z and any State consumer credit laws.

6. COVENANTS OF DEBTOR

(a) Debtor agrees in general: (i) to pay Indebtedness secured hereby
when due; (ii) to indemnify Bank against all losses, claims, demands,
liabilities and expenses of every kind caused by property subject hereto; (iii)
to pay all costs and expenses, including reasonable attorneys' fees, incurred by
Bank in the perfection and preservation of the Collateral or Bank's interest
therein and/or the realization, enforcement and exercise of Bank's rights,
powers and remedies hereunder; (iv) to permit Bank to exercise its powers; (v)
to execute and deliver such documents as Bank deems necessary to create, perfect
and continue the security interests contemplated hereby; and (vi) not to change
its chief place of business or the places where Debtor keeps any of the
Collateral or Debtor's records concerning the Collateral and Proceeds without
first giving Bank written notice of the address to which Debtor is moving same.

(b) Debtor agrees with regard to the Collateral and Proceeds, unless
Bank agrees otherwise in writing: (i) where applicable, to insure the Collateral
with Bank as loss payee, in form, substance and amounts, under agreements,
against risks and liabilities, and with insurance companies satisfactory to
Bank; (ii) not to permit any lien on the Collateral or Proceeds, except in favor
of Bank; (iii) not to sell, hypothecate or otherwise dispose of, nor permit the
transfer by operation of law of, any of the Collateral or Proceeds or any
interest therein; (iv) to keep, in accordance with generally accepted accounting
principles, complete and accurate records regarding all Collateral and Proceeds,
and to permit Bank to inspect the same and make copies thereof at any reasonable
time; (v) if requested by Bank, to receive and use reasonable diligence to
collect Proceeds, in trust and as the property of Bank, and to immediately
endorse as appropriate and deliver such Proceeds to Bank daily in the exact form
in which they are received together with a collection report in form
satisfactory to Bank; (vi) not to commingle Collateral or Proceeds, or
collections thereunder, with other property (except that prior to any Event of
Default hereunder Debtor shall be permitted to deposit collections in its
general bank accounts; (vii) to give only normal allowances and credits and to
advise Bank thereof immediately in writing if they affect any Collateral or
Proceeds in any material respect; (viii) from time to time, when requested by
Bank, to prepare and deliver a schedule of all Collateral and Proceeds subject
to this Agreement and to assign in writing and deliver to Bank all related
contracts, documents and other evidences thereof; (ix) in the event Bank elects
to receive payments of Collateral or Proceeds hereunder, to pay all expenses
incurred by Bank in connection therewith, including expenses of accounting,
correspondence, collection efforts, reporting to account or contract debtors,
filing, recording, record keeping and expenses incidental thereto; and (x) to
provide any service and do any other acts which may be necessary to keep all
Collateral and Proceeds free and clear of all defenses, rights of offset and
counterclaims.

7. POWERS OF BANK. Debtor appoints Bank its true attorney in fact to
perform any of the following powers, which are coupled with an interest, are
irrevocable until termination of this Agreement and may be exercised from time
to time by Bank's officers and employees, or any of them, whether or not Debtor
is in default: (a) to perform any obligation of Debtor hereunder in Debtor's
name or otherwise; (b) to give notice to account debtors or others of Bank's
rights in the Collateral and Proceeds, to enforce the same and make extension
agreements with respect thereto; (c) to release persons liable on Collateral or
Proceeds and to

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give receipts and acquittances and compromise disputes in connection therewith;
(d) to release security; (e) to resort to security in any order; (f) to prepare,
execute, file, record or deliver notes, assignments, schedules, designation
statements, financing statements, continuation statements, termination
statements, statements of assignment, applications for registration or like
papers to perfect, preserve or release Bank's interest in the Collateral and
Proceeds; (g) to receive, open and read mail addressed to Debtor; (h) to take
cash, instruments for the payment of money and other property to which Bank is
entitled; (i) to verify facts concerning the Collateral and Proceeds by inquiry
of obligors thereon, or otherwise, in its own name or a fictitious name; (j) to
endorse, collect, deliver and receive payment under instruments for the payment
of money constituting or relating to Proceeds; (k) to prepare, adjust, execute,
deliver and receive payment under insurance claims directly related to
Collateral, and to collect and receive payment of and endorse any instrument in
payment of loss or returned premiums or any other insurance refund or return
directly related to Collateral, and to apply such amounts received by Bank, at
Bank's sole option, toward repayment of the Indebtedness; (l) to exercise all
rights, powers and remedies which Debtor would have, but for this Agreement,
with respect to all Collateral and Proceeds subject hereto; and (m) to do all
acts and things and execute all documents in the name of Debtor or otherwise,
deemed by Bank as necessary, proper and convenient in connection with the
preservation, perfection or enforcement of its rights hereunder.

8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor
agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral, if applicable, and Proceeds, and
upon the failure of Debtor to do so, Bank at its option may pay any of them and
shall be the sole judge of the legality or validity thereof and the amount
necessary to discharge the same. Any such payments made by Bank shall be
obligations of Debtor to Bank, due and payable immediately upon demand, together
with interest at a rate determined in accordance with the provisions of Section
15 hereof, and shall be secured by the Collateral and Proceeds, subject to all
terms and conditions of this Agreement.

9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement: (a) any default in the
payment or performance of any obligation, or any defined event of default, under
(i) any contract or instrument evidencing any Indebtedness, or (ii) any other
agreement between any Debtor and Bank, including without limitation any loan
agreement, relating to or executed in connection with any Indebtedness; (b) any
representation or warranty made by any Debtor herein shall prove to be
incorrect, false or misleading in any material respect when made; (c) any Debtor
shall fail to observe or perform any obligation or agreement contained herein;
(d) any attachment or like levy on any property of any Debtor; and (e) Bank, in
good faith, believes any or all of the Collateral and/or Proceeds to be in
danger of misuse, dissipation, commingling, loss, theft, damage or destruction,
or otherwise in jeopardy or unsatisfactory in character or value.

10. REMEDIES. Upon the occurrence of any Event of Default, Bank shall
have the right to declare immediately due and payable all or any Indebtedness
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor. Bank shall have all other rights, powers, privileges
and remedies granted to a secured party upon default under the Oregon Uniform
Commercial Code or otherwise provided by law, including without limitation, the
right to contact all persons obligated to Debtor on any Collateral or Proceeds
and to instruct such persons to deliver all Collateral and/or Proceeds directly
to Bank. All rights, powers, privileges and remedies of Bank shall be
cumulative. No delay, failure or discontinuance of Bank in exercising any right,
power, privilege or remedy hereunder shall affect

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or operate as a waiver of such right, power, privilege or remedy; nor shall any
single or partial exercise of any such right, power, privilege or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy. Any waiver, permit,
consent or approval of any kind by Bank of any default hereunder, or any such
waiver of any provisions or conditions hereof, must be in writing and shall be
effective only to the extent set forth in writing. It is agreed that public or
private sales, for cash or on credit, to a wholesaler or retailer or investor,
or user of property of the types subject to this Agreement, or public auction,
are all commercially reasonable since differences in the sales prices generally
realized in the different kinds of sales are ordinarily offset by the
differences in the costs and credit risks of such sales. While an Event of
Default exists: (a) Debtor will deliver to Bank from time to time, as requested
by Bank, current lists of all Collateral and Proceeds; (b) Debtor will not
dispose of any of the Collateral or Proceeds except on terms approved by Bank;
and (c) at Bank's request, Debtor will assemble and deliver all Collateral and
Proceeds, and books and records pertaining thereto, to Bank at a reasonably
convenient place designated by Bank.

11. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all or
any part of the Indebtedness, Bank may transfer all or any part of the
Collateral or Proceeds and shall be fully discharged thereafter from all
liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers of
Bank hereunder with respect to any of the foregoing so transferred; but with
respect to any Collateral or Proceeds not so transferred, Bank shall retain all
rights, powers, privileges and remedies herein given. Any proceeds of any
disposition of any of the Collateral or Proceeds, or any part thereof, may be
applied by Bank to the payment of expenses incurred by Bank in connection with
the foregoing, including reasonable attorneys' fees, and the balance of such
proceeds may be applied by Bank toward the payment of the Indebtedness in such
order of application as Bank may from time to time elect.

12. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been paid
in full and all commitments by Bank to extend credit to Debtor have been
terminated, the power of sale and all other rights, powers, privileges and
remedies granted to Bank hereunder shall continue to exist and may be exercised
by Bank at any time and from time to time irrespective of the fact that the
Indebtedness or any part thereof may have become barred by any statute of
limitations, or that the personal liability of Debtor may have ceased, unless
such liability shall have ceased due to the payment in full of all Indebtedness
secured hereunder.

13. MISCELLANEOUS. (a) The obligations of Debtor are joint and several;
(b) Debtor hereby waives any right (i) to require Bank to make any presentment
or demand, or give any notice of nonpayment or nonperformance, protest, notice
of protest or notice of dishonor hereunder, (ii) to direct the application of
payments or security for any Indebtedness of Debtor, or indebtedness of
customers of Debtor, or (iii) to require proceedings against others or to
require exhaustion of security; and (c) Debtor hereby consents to extensions,
forbearances or alterations of the terms of Indebtedness, the release or
substitution of security, and the release of any guarantors; provided however,
that in each instance, Bank believes in good faith that the action in question
is commercially reasonable in that it does not unreasonably increase the risk of
nonpayment of the Indebtedness to which the action applies. Until all
Indebtedness shall have been paid in full, no Debtor shall have any right of
subrogation or contribution, and each Debtor hereby waives any benefit of or
right to participate in any of the Collateral or Proceeds or any other security
now or hereafter held by Bank.

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14. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or personal residence, if applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.

15. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in exercising any right, power, privilege or remedy conferred
by this Agreement or in the enforcement thereof, whether incurred at the trial
or appellate level, in an arbitration proceeding or otherwise, and including any
of the foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding, contested matter or
motion brought by Bank or any other person) relating to Debtor or in any way
affecting any of the Collateral or Bank's ability to exercise any of its rights
or remedies with respect thereto. All of the foregoing shall be paid by Debtor
with interest from the date of demand until paid in full at a rate per annum
equal to the greater of ten percent (10%) or Bank's Prime Rate in effect from
time to time.

16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in writing signed by Bank and Debtor.

17. OBLIGATIONS OF MARRIED PERSONS. Any married person who signs this
Agreement as Debtor hereby expressly agrees that recourse may be had against his
or her separate property for all his or her Indebtedness to Bank secured by the
Collateral and Proceeds under this Agreement.

18. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall
be held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.

19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon.

Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address: 4724 S.W. Macadam Avenue,
Portland Oregon 97201.

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IN WITNESS WHEREOF, this Agreement has been duly executed as of March
12, 2001.


BARRETT BUSINESS SERVICES, INC.


By: /s/ Michael D. Mulholland
--------------------------
Michael D. Mulholland
Vice President-Finance