EXHIBIT 10.2
                                                                    ------------


                                    FORM OF

                           LOAN AND SECURITY AGREEMENT

                                     between

                         CASUAL MALE RETAIL GROUP, INC.

                                    as Lender

                                       and

                              LP INNOVATIONS, INC.

                                   as Borrower




                          _______________________, 2002





<PAGE>


                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

ARTICLE 1      INTERPRETATION................................................1
  Section 1.1  Definitions...................................................1
  Section 1.2  Rules of Construction.........................................4

ARTICLE 2      TERMS OF LOAN AND OBLIGATION..................................4
  Section 2.1  Terms of Loan.................................................4
  Section 2.2  Interest on Overdue Payments; Default Rate....................6
  Section 2.3  Prepayments of Principal......................................6
  Section 2.4  Time and Place of Payments....................................7
  Section 2.5  Application of Funds..........................................7
  Section 2.6  Payments to be Free of Deductions.............................7

ARTICLE 3      SECURITY INTERESTS; FURTHER ASSURANCES........................7
  Section 3.1  Grant of Security Interest....................................7
  Section 3.2  Other Collateral; Lien Perfection.............................8
  Section 3.3  Further Assurances............................................8
  Section 3.4  Locations of Collateral.......................................8
  Section 3.5  Protection of Collateral......................................8

ARTICLE 4      REPRESENTATIONS AND WARRANTIES................................8
  Section 4.1  Enforceable Obligations.......................................8
  Section 4.2  No Legal Bar..................................................9
  Section 4.3  Compliance with Laws; Licenses and Permits....................9
  Section 4.4  Location......................................................9
  Section 4.5  Organization and Qualification................................9
  Section 4.6  Corporate Power and Authority.................................9
  Section 4.7  Solvent Financial Condition...................................9
  Section 4.8  Taxes.........................................................9
  Section 4.9  Litigation...................................................10
  Section 4.10 No Defaults..................................................10
  Section 4.11 General Collateral Representation............................10
  Section 4.12 Disclosure...................................................10
  Section 4.13 Survival of Representations and Warranties...................11

ARTICLE 5      AFFIRMATIVE COVENANTS........................................11
  Section 5.1  Maintenance of Property; Insurance; Licenses.................11
  Section 5.2  Inspection of Property; Books and Records....................11
  Section 5.3  Notices......................................................11
  Section 5.4  Collateral...................................................11
  Section 5.5  Further Documents............................................12
  Section 5.6  Licenses and Permits.........................................12
  Section 5.7  Financial Statements.........................................12
  Section 5.8  Projections..................................................13

                                       i

<PAGE>



                                Table of Contents
                                -----------------
                                   (continued)
                                                                           Page
                                                                           ----

  Section 5.9  Conversion Shares............................................13
  Section 5.10 Other Information............................................13

ARTICLE 6      NEGATIVE COVENANTS...........................................13
  Section 6.1  Limitation on Liens..........................................13
  Section 6.2  Limitation on Sale of Assets.................................13
  Section 6.3  Change of Locations..........................................13
  Section 6.4  Mergers; Consolidations; Acquisitions........................14
  Section 6.5  Loans........................................................14
  Section 6.6  Total Indebtedness...........................................14
  Section 6.7  Capital Expenditures.........................................14
  Section 6.8  Operating Income.............................................14
  Section 6.9  Dividends....................................................14

ARTICLE 7      EVENTS OF DEFAULT AND REMEDIES...............................14
  Section 7.1  Events of Default............................................14
  Section 7.2  Remedies.....................................................16
  Section 7.3  Application of Proceeds......................................17
  Section 7.4  Set-Off......................................................17
  Section 7.5  Rights Cumulative; Waiver....................................17

ARTICLE 8      COLLECTION OF COLLATERAL AND NOTICE OF ASSIGNMENT............17
  Section 8.1  Disclaimer of Liability......................................17

ARTICLE 9      MISCELLANEOUS................................................18
  Section 9.1  Amendments and Waivers.......................................18
  Section 9.2  Notices......................................................18
  Section 9.3  Successors and Assigns.......................................18
  Section 9.4  Collection Costs.............................................18
  Section 9.5  Counterparts.................................................19
  Section 9.6  Governing Law................................................19
  Section 9.7  Consent to Jurisdiction......................................19
  Section 9.8  WAIVER OF JURY TRIAL.........................................19
  Section 9.9  Other Waivers................................................20
  Section 9.10 Power of Attorney............................................20
  Section 9.11 Indemnity....................................................20
  Section 9.12 Entire Agreement.............................................20
  Section 9.13 Interpretation...............................................20

                                       ii

<PAGE>


                                Table of Contents
                                -----------------
                                   (continued)

EXHIBITS

      A     Form of Convertible Secured Promissory Note

SCHEDULES

      Schedule 1.1            Evidence of Previous Advancements

      Schedule 1.2            Permitted Liens

      Schedule 3.4            Locations of Collateral

      Schedule 4.2            Legal Bars

      Schedule 4.4            Location, ID Number, etc.

      Schedule 4.11(c)        UCC Filing Locations


                                      iii

<PAGE>

                                     FORM OF
                           LOAN AND SECURITY AGREEMENT


      This LOAN AND SECURITY  AGREEMENT (this "Agreement") is made this ____ day
of  ____________,  2002,  by and between  CASUAL MALE RETAIL  GROUP,  INC.  (the
"Lender"), a Delaware corporation, and LP INNOVATIONS,  INC. (the "Borrower"), a
Nevada corporation.

                             Preliminary Statements

      WHEREAS,  the Borrower has been a  wholly-owned  subsidiary of the Lender,
and the  Lender  now  wishes  to  spin-off  the  shares of the  Borrower  to the
stockholders of the Lender.

      WHEREAS,  the Lender has made loans to the Borrower in the aggregate total
amount of $1,000,000.00 (collectively the "Previous Advancements") each of which
loans has been itemized by _______________.

      WHEREAS,  the Borrower has  requested  that the Lender make an  additional
loan (the "New Loan") to the  Borrower in the amount of  $500,000.00  (the "Loan
Amount").

      WHEREAS, the Lender has agreed in its sole discretion that it may make the
New Loan in the Loan Amount if the Borrower  enters into and delivers  this Loan
and Security  Agreement  governing  amongst other things,  the making of the New
Loan, the repayment of the Previous Advancements and such New Loan and, if made,
the granting of the security  interest in the Collateral to the Lender to secure
the Total Borrowings.

      NOW, THEREFORE,  in consideration of the foregoing and the mutual promises
herein contained and for other good and valuable consideration,  the receipt and
sufficiency of which are hereby  acknowledged,  the Borrower  hereby agrees with
the Lender as follows:

                                   ARTICLE 1

                                 INTERPRETATION

    Section 1.1  Definitions. The following capitalized terms are defined as
                                    follows:

      "Business Day" means any day except a Saturday, Sunday or legal holiday on
which commercial banking institutions are open for business in New York City.

      "Cash Flow" means, for any period of determination thereof, the following,
each  calculated for such period,  without  duplication:  (i) EBITDA,  less (ii)
capital  expenditures  actually  made in cash,  less (iii) income and  franchise
taxes resulting from tax payments  actually made and paid in cash, less interest
paid on  indebtedness  (including the Total  Borrowing),  during such Period the
amount of cash flow of the Borrower in excess of $25,000.00.


<PAGE>

      "Collateral" has the meaning set forth in Section 3.1.

      "Common  Stock" means the  authorized  common stock of the  Borrower,  par
value $0.01 per share.

      "Conversion Date" has the meaning set forth in Section 2.1(c)(6).

      "Conversion Price" means $0.40 per share..

      "Conversion Shares" has the meaning set forth in Section 2.1(c)(6).

      "Default" means any event or condition the occurrence of which with giving
of notice, the lapse of time, or both, would constitute an Event of Default.

      "Default Rate" means an amount equal to the Interest Rate plus two percent
(2.00%).

      "Distribution" means the distribution by the Lender of the common stock of
the Borrower to stockholders of the Lender.

      "Distribution   Date"  means  the  date  on  which  the   Distribution  is
consummated.

      "Event of Default" has the meaning set forth in Article 7 hereof.

      "Excess Cash Flow" means, for any period of  determination  (i) Cash Flow,
minus (ii)  scheduled  amortization  of principal  and  interest  and  mandatory
prepayments of any indebtedness  (including the Total  Borrowings),  minus (iii)
cash dividends and distribution  paid (or accrued during such period) on capital
stock as permitted hereunder, minus (iv) increases in working capital, and plus,
decreases in working capital.

      "Interest  Payment  Dates" has the meaning set forth in Section  2.1(c)(4)
herein.

      "Interest  Rate"  means  a  rate  of  interest  equal  to 12%  per  annum,
compounded daily.

      "Lien"  means in respect of  property  or assets,  any  mortgage,  pledge,
hypothecation,  assignment, deposit arrangement, encumbrance, lien (statutory or
other),  preference,  priority  or  other  security  agreement  or  preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement,  any financing lease having
substantially  the same economic effect as any of the foregoing,  and the filing
of any financing  statement under the Uniform  Commercial Code or comparable law
of any  jurisdiction in respect of any of the foregoing).  The term "Lien" shall
include  reservations,  exceptions,  encroachments,   easements,  rights-of-way,
covenants,  conditions,  restrictions,  leases and other  title  exceptions  and
encumbrances.

      "Loan Amount" means  $500,000.00,  as more  particularly  described in the
third "Whereas" clause of this Agreement.

      "Loan  Documents"  means this  Agreement,  the Note and the  documentation
listed on Schedule 1.1 hereto evidencing the Previous Advancements.



                                      -2-
<PAGE>

      "Maturity Date" means the one year anniversary of the Distribution Date.

      "New  Loan"  means  the  new  loan in the  Loan  Amount  requested  by the
Borrower.

      "Note"  means the  convertible  secured  promissory  note  executed by the
Borrower in favor of the Lender,  evidencing the Total Borrowings,  such note to
be in substantially the form of Exhibit A attached hereto.

      "Obligations"  means,  without  limitation,  the New Loan (if  made),  the
Previous Advancements, all interest thereon and all other debts, obligations, or
liabilities of every kind and description of the Borrower to the Lender, now due
or to become due, direct or indirect, absolute or contingent, presently existing
or  hereafter  arising,  joint or  several,  secured or  unsecured,  whether for
payment or performance,  regardless of how the same arise or by what instrument,
agreement  or book account they may be  evidenced,  or whether  evidenced by any
instrument,  agreement or book account, including, without limitation, all loans
(including any loan by renewal or extension), all extensions and advancements of
funds, all overdrafts, all guarantees, all bankers acceptances,  all agreements,
all letters of credit issued by the Lender for the Borrower and the applications
relating  thereto,  all  indebtedness  of the  Borrower to the  Lender,  and all
undertakings to take or refrain from taking any action.  Obligations  shall also
include all interest and other  charges  chargeable  to the Borrower or due from
the Borrower to the Lender from time to time and all costs and expenses referred
to in Sections 9.4.

      "Operating  Income" means for any period of determination,  the difference
between the Borrower's revenues and the related costs and expenses; all itemized
in accordance with GAAP but excluding income derived from sources other than its
regular activities and before income deductions.

      "Other  Loan  Documents"  means  all  documents,  instruments,   financing
statements,  certificates and other  agreements  executed in connection with the
Loan Documents but excluding such Loan Documents.

      "Organizational ID Number" means the organizational  identification number
assigned to Borrower by the applicable  governmental unit or agency of the State
of Nevada.

      "Permitted  Liens"  means those liens set forth on Schedule  1.2  attached
hereto.

      "Person" means an individual, partnership,  corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.

      "Previous  Advancements"  means  the  aggregate  amount  of  $1,000,000.00
advanced  by the  Lender to the  Borrower  from May 14,  2002  through,  but not
including,  the Distribution Date as more particularly described on Schedule 1.1
hereto.

      "Proceeds" has the meaning provided in the Uniform Commercial Code.

      "Requirements of Law" means, with respect to any Person,  any law, treaty,
rule or  regulation  or  determination  of an  arbitrator  or a court  or  other
governmental  authority,  in each



                                      -3-
<PAGE>

case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

      "Solvent" as to any Person,  that such Person (i) owns property and assets
the fair saleable value of which is greater than the amount  required to pay all
of such Person's indebtedness  (including contingent debts), (ii) is able to pay
all of its  indebtedness  as such  indebtedness  matures  and (iii) has  capital
sufficient  to carry on its  business  and  transactions  and all  business  and
transactions in which it is about to engage.

      "Total Borrowings" $1,500,000, being the aggregate of the New Loan, if and
when made, and the Previous Advancements.

      "Uniform  Commercial  Code" or "UCC" means the Uniform  Commercial Code in
effect  in the  State of New York on the date  hereof  as it may be  amended  or
revised.

       Section 1.2 Rules of Construction.

            (a) Use of Capitalized Terms. For purposes of this Agreement, unless
the context  otherwise  requires,  the capitalized  terms used in this Agreement
shall have the meanings herein assigned to them, and such  definitions  shall be
applicable  to both  singular and plural forms of such terms.  In addition,  all
terms  defined in the  Uniform  Commercial  Code shall have the  meanings  given
therein unless otherwise defined herein.

            (b)  Construction.  All  references in this  Agreement to the single
number and neuter  gender shall be deemed to mean and include the plural  number
and all genders, and vice versa, unless the context shall otherwise require.

            (c) Headings.  All headings and titles  contained in this  Agreement
are for  convenience  only and  shall  not  affect  the  interpretation  of this
Agreement.

            (d)   Severability.   Any  provision  of  this  Agreement  which  is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

            (e)  Interpretation.   This  document  is  the  result  of  reasoned
negotiation between the parties and should not be construed against any party.

                                   ARTICLE 2

                          TERMS OF LOAN AND OBLIGATION

      Section 2.1 Terms of Loan.

            (a) Previous Advancements.  The Borrower acknowledges the receipt of
the Previous  Advancements  and its obligation to repay such loans in accordance
with the terms of this  Agreement,  and  hereby  agrees to repay  such  Previous
Advancements  in  accordance  with  the



                                      -4-
<PAGE>

terms hereof.  Any  reference in this  Agreement to the Total  Borrowings  shall
include the Previous Advancements.

            (b) New Loan. Subject to and upon the terms and conditions of and in
reliance upon the  representations  and warranties made in this  Agreement,  the
Lender  hereby  agrees  that it may, in its sole  discretion,  make the New Loan
available  to the  Borrower in the Loan Amount on the  Distribution  Date or any
later date. Such New Loan, if made, shall be deposited to account number _______
at  __________.  Such New Loan  shall be used  solely  for the  working  capital
requirements of the Borrower following the Distribution.

            (c)  Obligations of the Borrower.  Subject to and upon the terms and
conditions  of this  Agreement,  the Borrower  hereby  agrees to repay the Total
Borrowings to the Lender on the earlier to occur of the due date therefor or the
Maturity  Date.  The absolute and  unconditional  obligation  of the Borrower to
repay the Total  Borrowings and interest thereon shall be evidenced by the Note.
The Note shall include the following terms:

               (1)  Amount.  The face  amount of the Note shall  equal the Total
                    Borrowings;

               (2)  Term.  The Note  shall be  dated as of the date  hereof  and
                    shall  mature  and be due and  payable in full on, or before
                    (upon  acceleration of the Note in accordance with the terms
                    hereof), the Maturity Date;

               (3)  Interest Rate. The Note shall bear interest (computed on the
                    basis of the actual  number of days  elapsed  over a 360-day
                    year) on the daily outstanding  principal balance thereunder
                    at the Interest Rate;

               (4)  Interest  Payment  Dates.  Interest on the Note shall be due
                    and  payable  on  the  first  Business  Day of  each  month,
                    commencing  on the  Distribution  Date  and on the  date the
                    Total  Borrowings are due whether by maturity,  acceleration
                    or otherwise (each an "Interest Payment Date");

               (5)  Principal  Payment.  Other than as specified with respect to
                    prepayments in Section 2.3 hereof, the Borrower shall pay to
                    the  order of the  Lender,  in  lawful  money of the  United
                    States of America,  the aggregate unpaid principal amount of
                    the Total  Borrowings  on the  Maturity  Date,  without  any
                    action  being  taken  on  the  part  of  the  Lender  and in
                    accordance with Section 2.4 hereof; and

               (6)  Convertibility.  At any time during  normal  business  hours
                    following  the date hereof,  the Lender,  at its sole option
                    and  discretion,   upon  five  (5)  days'  prior  notice  to
                    Borrower,  shall be  entitled  to convert all or any part of
                    the principal amount  outstanding under the Note into Common
                    Stock  of  the  Borrower  at  the   Conversion   Price  (the
                    "Conversion  Shares"). In the event that the Lender notifies
                    Borrower of its  decision to convert a portion  only of such
                    outstanding principal amount of the Note, the Borrower shall
                    execute  and  deliver  to Lender



                                      -5-
<PAGE>

                    a new convertible  secured  promissory  note,  substantially
                    similar to the Note and  reflecting  the  reduced  principal
                    amount then due hereunder.  Simultaneously with the delivery
                    of  such  new  convertible   secured  promissory  note,  the
                    Borrower   shall  also  deliver  to  the  Lender  the  stock
                    certificates  representing the Conversion  Shares.  Upon the
                    issuance of any Conversion  Shares,  the  Obligations of the
                    Borrower  under  the  Note  shall be  satisfied  to the full
                    extent of the value of such Conversion Shares.

      Section 2.2 Interest on Overdue Payments; Default Rate. (a) If any payment
of interest or principal is not paid when due for any period  (after  expiration
of any  applicable  grace period),  the interest rate for the applicable  period
shall be calculated at the Default Rate.

            (b) Upon the occurrence  and during the  continuance of any Event of
Default, the outstanding principal and all accrued interest as well as any other
charges due the Lender hereunder or under the Note, shall bear interest from the
date on which such amount  shall have first become due and payable to the Lender
(or, in the case of other  charges due the Lender  hereunder,  five (5) Business
Days after demand therefor by the Lender) to the date on which such amount shall
be paid to the Lender (whether before or after  judgment),  at the Default Rate.
Upon the  occurrence  and during the  continuance  of any Event of Default,  any
accrued and unpaid  interest  shall become and be absolutely  due and payable to
the Lender, on demand,  at any time.  Interest will continue to accrue until the
Obligations are discharged (whether before or after judgment) in full.

      Section 2.3 Prepayments of Principal.

            (a)  Mandatory  Prepayments.  The  Borrower  shall  mandatorily  and
immediately  prepay  the Total  Borrowings,  in part or in full,  to the  extent
applicable, in any and/or all of the following circumstances:

               (1)  Upon any partial or full sale or encumbrance by the Borrower
                    of any  Collateral,  the  Borrower  shall  make a  mandatory
                    prepayment  to Lender in an amount equal to the total amount
                    realized from such sale or the value of such encumbrance;

               (2)  Upon any sale of  equity  securities  by the  Borrower,  the
                    Borrower shall make a mandatory prepayment to the extent the
                    net proceeds thereof exceed $500,000.00; and

               (3)  Upon the  realization  by the  Borrower of Excess Cash Flow,
                    the Borrower shall make a mandatory  prepayment in an amount
                    equal to such Excess Cash Flow.

            (b)  Voluntary  Prepayments.  The Borrower may  voluntarily  prepay,
without premium or penalty,  the Total Borrowings in part or in full at any time
upon  notice to the  Lender  of at least  five (5) days  prior to the  specified
prepayment date.



                                      -6-
<PAGE>

      Section 2.4 Time and Place of  Payments.  Notwithstanding  anything in the
Loan  Documents to the  contrary,  each  payment  payable by the Borrower to the
Lender under this  Agreement or the Note shall be made directly by wire transfer
to an  account  of the  Lender  at  __________,  or such  other  place as may be
designated by the Lender,  not later than 12:00 p.m. local time, on the due date
of each such payment in immediately available funds.

      Section 2.5 Application of Funds. Notwithstanding anything in this Article
2 to the contrary,  the funds received by the Lender shall be applied toward the
Obligations  as follows:  first,  to the payment of all fees,  charges and other
sums (with the  exception  of  principal  and  interest)  due and payable to the
Lender  under  the  Note  or this  Agreement  at such  time  including,  without
limitation,  all reasonable and necessary  costs,  expenses,  disbursements  and
losses  which  shall  have  been  incurred  or  sustained  by the  Lender in the
collection  of the  Obligations  hereunder  (including  attorneys  fees)  or the
exercise,  protection, or enforcement by the Lender of all or any of the rights,
remedies, powers and privileges of the Lender under this Agreement, the Note, or
any of the other Loan  Documents  and in and towards the  provision  of adequate
indemnity to the Lender  against all taxes or Liens which by law shall have,  or
may have priority over the rights of the Lender in and to such funds; second, to
the payment of interest  which shall be due and payable on the  principal of the
Note;  third,  to the payment of principal on the Note; and fourth,  the surplus
remaining  (if any),  to the  Borrower or such other Person or Persons as may be
determined by the Borrower or any court of competent jurisdiction.

      Section 2.6 Payments to be Free of Deductions. Each payment payable to the
Lender  under  this  Agreement  or the Note,  shall be made in  accordance  with
Section 2.4 hereof,  without set-off or  counterclaim  and free and clear of and
without  any  deduction  of any kind for any  taxes,  levies,  imposts,  duties,
charges,  fees,  deductions,  withholdings,  restrictions  or  conditions of any
nature  now or  hereafter  imposed or levied as a result of any change in law or
regulation or any change in the  interpretation  or  application of any existing
law by any  political  subdivision  or any  taxing or other  authority  therein,
unless  the  Borrower  is  compelled  by law  to  make  any  such  deduction  or
withholding

                                   ARTICLE 3

                     SECURITY INTERESTS; FURTHER ASSURANCES

      Section 3.1 Grant of Security  Interest.  To secure the prompt payment and
performance of all of the  Obligations  under the Loan  Documents,  the Borrower
hereby grants to the Lender a continuing security interest in and assigns to the
Lender all of the Borrower's assets or property whether real, personal or mixed,
or tangible or intangible,  wheresoever located, now owned or hereafter acquired
by the  Borrower,  including  without  limitation,  all  Accounts,  Certificated
Securities,   Chattel  Paper,  Contract  Rights,  Deposit  Accounts,  Documents,
Equipment, Financial Assets, Fixtures, General Intangibles,  Goods, Instruments,
Inventory,   Investment   Property,   Security   Entitlements,    Uncertificated
Securities,  Commercial Tort Claims,  Software,  Letter of Credit Rights and all
Proceeds  thereof (as each such  defined  term is defined in the UCC) and to the
extent not  included in the  foregoing,  all  property and assets of any kind or
description   owned  by  Borrower,   all  of  such  assets  and  property  being
collectively hereinafter the "Collateral."



                                      -7-
<PAGE>

      Section 3.2 Other  Collateral;  Lien  Perfection.  Borrower shall promptly
notify  Lender  in  writing  upon  acquiring  or  otherwise  obtaining  any  New
Collateral  and, upon the request of Lender,  will  promptly  execute such other
documents,  and do such other  acts or things  deemed  appropriate  by Lender to
deliver to Lender a perfected  security  interest in such  Collateral.  Borrower
shall  execute such UCC-1  financing  statements  as are required by the UCC and
such other  instruments,  assignments  or documents as are  necessary to perfect
Lender's Lien upon any of the Collateral and shall take such other action as may
be required to perfect or to continue the  perfection  of Lender's Lien upon the
Collateral.  Unless  prohibited by applicable law,  Borrower hereby  irrevocably
authorizes Lender to execute and file any such financing statements,  including,
without  limitation,  financing  statements  that indicate the Collateral (i) as
being all assets of Borrower or words of similar effect,  or (ii) as being of an
equal or lesser scope,  or with greater or lesser  detail,  than as set forth in
Section 3.1, on  Borrower's  behalf.  The parties agree that a  photographic  or
other  reproduction  of  this  Agreement  shall  be  sufficient  as a  financing
statement and may be filed in any appropriate office in lieu thereof.

      Section  3.3  Further  Assurances.  At Lender's  request,  Borrower  shall
promptly execute or cause to be executed and shall deliver to Lender any and all
documents,  certificates,  instruments and agreements deemed necessary by Lender
to give  effect  to, or carry  out,  the terms or intent of the Loan  Documents,
including,  without limitation,  the perfection of Lender's security interest in
the Collateral  and the issuance to Lender of the  Conversion  Shares in full or
partial settlement of the Obligations.

      Section 3.4 Locations of Collateral. All Collateral,  will at all times be
kept by Borrower at the business  locations set forth in Schedule 3.4 hereto and
shall not, without the prior written approval of Lender, be moved therefrom.

      Section 3.5 Protection of Collateral. All expenses of protecting, storing,
warehousing,  insuring,  handling,  maintaining and shipping the Collateral, any
and all excise, property, sales, and use taxes imposed by any state, federal, or
local authority on any of the Collateral or in respect of the sale thereof shall
be borne and paid by  Borrower.  If Borrower  fails to promptly  pay any portion
thereof when due,  Lender may, at its option,  but shall not be required to, pay
the same and charge Borrower therefor. Lender shall not be liable or responsible
in any way for  the  safekeeping  of any of the  Collateral  or for any  loss or
damage  thereto  (except for  reasonable  care in the custody  thereof while any
Collateral is in Lender's actual  possession) or for any diminution in the value
thereof,  or for any act or default  of any  warehouseman,  carrier,  forwarding
agency,  or other person  whomsoever,  but the same shall be at Borrower's  sole
risk.

                                   ARTICLE 4

                         REPRESENTATIONS AND WARRANTIES

      In order to induce the Lender to enter  into this  Agreement  and make the
New Loan, the Borrower hereby represents and warrants to the Lender that:

      Section 4.1 Enforceable Obligations. This Agreement and the Note have been
duly executed and delivered on behalf of the Borrower, and constitute the legal,
valid  and  binding  obligation  of  the  Borrower,  enforceable  against  it in
accordance  with  their  terms,  except  as



                                      -8-
<PAGE>

enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,  moratorium,  or  similar  laws  affecting  the  enforcement  of
creditors' rights generally and by general  principles of equity  (regardless of
whether enforcement is sought in a proceeding in equity or at law).

      Section  4.2 No Legal Bar.  Except as set forth on Schedule  4.2  attached
hereto, the execution, delivery and performance of this Agreement, the Note, and
the other Loan Documents and the consummation of the  transactions  contemplated
thereby,  will not (i) violate any Requirements of Law, or (ii) conflict with or
result in a breach of the terms or provisions of, or constitute a default under,
or (except as  otherwise  contemplated  and  required or permitted by any of the
Loan  Documents)  result  in  the  creation  of any  Lien,  under  any  material
contractual obligation of the Borrower.

      Section 4.3 Compliance with Laws; Licenses and Permits. The Borrower is in
compliance  with all  Requirements of Law and possesses all licenses and permits
required for the operation of the Collateral.

      Section 4.4 Location.  Schedule 4.4 attached  hereto lists the  Borrower's
exact legal name, principal place of business, and the Borrowers  Organizational
I.D. Number and federal tax identification  number. The Borrower will not change
any of the foregoing, absent Lender's prior written consent.

      Section 4.5 Organization and Qualification. Borrower is a corporation duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its incorporation.  Borrower is duly qualified and is authorized
to do business and is in good standing as a foreign corporation in each state or
jurisdiction  listed  on  Schedule  4.5  hereto  and in  all  other  states  and
jurisdictions  in which the failure of Borrower to be so qualified  would have a
material adverse effect on the financial  condition,  business or properties and
assets of Borrower .

      Section 4.6 Corporate Power and Authority. Borrower is duly authorized and
empowered to enter into, execute, deliver and perform this Agreement and each of
the other Loan  Documents.  The  execution,  delivery  and  performance  of this
Agreement and each of the other Loan Documents have been duly  authorized by all
necessary  corporate  action and do not and will not (i)  require any consent or
approval of the shareholders; (ii) contravene Borrower's articles or certificate
of incorporation or by-laws; (iii) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease or
instrument  to which  Borrower is a party or by which it or its  properties  and
assets may be bound or affected.

      Section 4.7 Solvent Financial Condition. Borrower is now and, after giving
effect to the New Loan to be made hereunder, at all times will be, Solvent.

      Section 4.8 Taxes.  Borrower  has filed all  federal,  state and local tax
returns and other  reports it is  required by law to file and has paid,  or made
provision  for the payment of, all taxes,  assessments,  fees,  levies and other
governmental charges upon it, its income, properties and assets as and when such
taxes, assessments,  fees, levies and charges are due and payable, unless and to
the  extent  any  thereof  are being  actively  contested  in good  faith and by
appropriate  proceedings and Borrower maintains reasonable reserves on its books
therefor.  The provision for



                                      -9-
<PAGE>

taxes on the  books of  Borrower  are  adequate  for all  years  not  closed  by
applicable statutes, and for its current fiscal year.

      Section 4.9 Litigation.  Except as set forth on Schedule 4.9 hereto, there
are  no  actions,  suits,  proceedings  or  investigations  pending,  or to  the
knowledge  of  Borrower,  threatened,  against  or  affecting  Borrower,  or the
business,  operations,  properties,  assets  prospects,  profits or condition of
Borrower.  The  Borrower  is not in default  with  respect  to any order,  writ,
injunction,  judgment,  decree or rule of any court,  governmental  authority or
arbitration board or tribunal.

      Section  4.10 No Defaults.  No event has occurred and no condition  exists
which  would,  upon or after the  execution  and  delivery of this  Agreement or
Borrower's performance hereunder, constitute a Default or an Event of Default.

      Section 4.11 General Collateral Representation.

            (a) The  Borrower  is and at all times will be the sole owner of and
have good title to the  Collateral,  free from all Liens, in favor of any Person
other than the Permitted Liens, and has full right and power to grant the Lender
a security interest therein. All information  furnished to the Lender concerning
the  Collateral  is and will be  complete,  accurate and correct in all respects
when furnished;

            (b) No security agreement, financing statement,  equivalent security
or Lien  instrument or  continuation  statement  covering all or any part of the
Collateral is on file or of record in any public office, except such as may have
been  filed  (i) by the  Borrower  in  favor  of the  Lender  pursuant  to  this
Agreement,  or (ii)  in  respect  of the  items  of  Collateral  subject  to the
Permitted Liens; and

            (c) The  provisions of this  Agreement  are  sufficient to create in
favor of the Lender, from and after the date hereof, a valid and continuing lien
on, and security  interest in, the types of the Collateral  hereunder in which a
security  interest  may  be  created  under  Article  9 of  the  UCC.  Financing
Statements  on Form UCC-1 have been duly  executed on behalf of the Borrower and
the  description  of such  Collateral set forth therein is sufficient to perfect
security  interests  in such  Collateral  in which a  security  interest  may be
perfected  by the  filing  of  financing  statements  under  the UCC.  When such
financing  statements  are duly filed in the filing  offices  listed on Schedule
4.5(c)  hereto,  and the  requisite  filing fees are paid,  such filings will be
sufficient to perfect the security interests in such of the Collateral described
in the  financing  statements  as can be  perfected by filing,  which  perfected
security  interests  will be prior to all  other  Liens in favor of  others  and
rights of  others  except  for  Permitted  Liens,  enforceable  as such  against
creditors of and purchasers from the Borrower.  All action  necessary to protect
and perfect a security  interest in each item of the Collateral  (excluding cash
and cash equivalents not constituting Proceeds) in which a security interest may
be  perfected  under  Article 9 of the UCC has been duly  taken,  except  that a
security  interest in cash and cash  equivalents  not in the  possession  of the
Lender is not perfected.

      Section  4.12  Disclosure.  No  representation  or  warranty  made  by the
Borrower in this Agreement or in any other document furnished or to be furnished
from time to time in



                                      -10-
<PAGE>

connection herewith or therewith contains or will contain any  misrepresentation
of a material fact or omits or will omit to state any material fact necessary to
make the statements herein or therein not misleading.

      Section 4.13 Survival of  Representations  and  Warranties.  The foregoing
representations  and  warranties are made by the Borrower with the knowledge and
intention that the Lender will rely thereon, and shall survive the execution and
delivery  of this  Agreement.  Such  representations  and  warranties  shall  be
continuous  in nature and shall remain  accurate,  complete  and not  misleading
during the term of this  Agreement,  except for changes to which Lender consents
in writing.

                                    ARTICLE 5

                              AFFIRMATIVE COVENANTS

      So long as any amount due on the Note  remains  outstanding  and unpaid or
any other Obligation is owing to the Lender, the Borrower agrees as follows:

      Section 5.1 Maintenance of Property;  Insurance;  Licenses.  To the extent
applicable,  the Borrower  shall keep the  Collateral  in good working order and
condition,  ordinary wear and tear excepted;  maintain all workers' compensation
insurance  required  by law;  maintain  with  financially  sound  and  reputable
insurance  companies  insurance on the Collateral  and liability  insurance with
respect to its  activities  against at least such risks as are  usually  insured
against in the same general  area by companies  engaged in the same or a similar
business or use of Equipment similar to the Collateral,  or, in case of an Event
of Default which shall occur and be  continuing,  as the Lender may specify from
time to time, with insurers and in amounts acceptable to the Lender; and furnish
to the Lender,  upon  written  request,  full  information  as to the  insurance
carried. Such insurance,  other than Workers' compensation  insurance shall name
the Lender as additional insured or loss payee, as the case may be.

      Section 5.2 Inspection of Property; Books and Records. The Borrower grants
to the Lender, or its  representatives,  upon reasonable notice (or no notice if
the Lender believes that an Event of Default has occurred and deems it necessary
for the protection of the Collateral or its rights under this  Agreement),  full
and  complete  access  to the  Collateral  and all  books of  account,  records,
correspondence  and  other  papers  relating  to the  Collateral  during  normal
business hours and the right to inspect, examine, verify and make abstracts from
the copies of such books of account,  records,  correspondence  and other papers
and discuss the contents thereof and Borrowers business and financial  condition
and prospects with officers of the Lender.

      Section 5.3 Notices. The Borrower shall promptly give notice to the Lender
of (i) any breach of any  representation  or warranty and (ii) the occurrence of
any  Default or Event of Default  setting  forth the  details of the  Default or
Event of Default and any action taken or  contemplated  to be taken with respect
to the same.

      Section 5.4 Collateral. The Borrower shall maintain the Collateral, as the
same is  constituted  from  time to time,  free and clear of all  Liens,  except
Permitted  Liens;  defend the  Collateral  against all claims and demands of all
Persons at any time claiming the same or any



                                      -11-
<PAGE>

interest therein and pay all costs and expenses (including reasonable attorney's
fees) incurred in connection with such defense.

      Section 5.5 Further  Documents.  The Borrower  shall  execute such further
documents and  instruments and take such other action as to enable the Lender to
cause the Lender's Lien to be noted on each document of ownership or title as to
which  evidence of the  Lender's  Lien is  necessary  or, in the Lender's or the
Lender's  counsel's  opinion,  advisable  to be shown in  order to  perfect  the
Lender's Lien on the Collateral covered by such document.

      In  addition,  the  Borrower  shall  promptly  pay all  necessary  filing,
subscription  and inscription fees and all recording and other similar fees, and
all  taxes  and  other  expenses  related  to  such  filings,  registrations  or
recordings.

      After the date hereof,  at the request of the Lender,  the Borrower  shall
pay, upon demand, all expenses (including  reasonable  attorneys' fees) incurred
by the Lender in  connection  herewith and the other Loan  Documents  including,
protecting the Collateral or exercising any rights in connection therewith.

      Section 5.6 Licenses and Permits. The Borrower shall maintain all licenses
and permits applicable to the Collateral.

      Section 5.7 Financial Statements. The Borrower shall keep adequate records
and books of account  with respect to its  business  activities  in which proper
entries  are  made  in  accordance   with  GAAP  reflecting  all  its  financial
transactions;  and cause to be prepared and  furnished  to Lender the  following
(all to be prepared  in  accordance  with GAAP  applied on a  consistent  basis,
unless Borrower's  certified public accountants concur in any change therein and
such change is disclosed to Lender and is consistent with GAAP):

          (i) not later than  ninety  (90) days  after the close of each  fiscal
     year of Borrower, unqualified,  audited financial statements of Borrower as
     of the end of such  year,  certified  by a firm  of  independent  certified
     public  accountants  of  recognized   standing  selected  by  Borrower  but
     acceptable to Lender (except for a qualification for a change in accounting
     principles with which the accountant concurs);

          (ii) not later than  thirty  (30) days  after the end of each  quarter
     hereafter,  including the last month of Borrower's fiscal year,  unaudited,
     interim financial  statements of Borrower as of the end of such quarter and
     of the portion of Borrower's financial year then elapsed,  certified by the
     principal financial officer of Borrower as prepared in accordance with GAAP
     and fairly  presenting the financial  position and results of operations of
     Borrower  for such period  subject  only to changes from audit and year-end
     adjustments and except that such statements need not contain notes;

          (iii)  promptly after the sending or filing  thereof,  as the case may
     be,  copies of any proxy  statements,  financial  statements  or reports or
     other communications which Borrower has made available to its shareholders;
     and



                                      -12-
<PAGE>

          (iv) such other data and  information  (financial  and  otherwise)  as
     Lender, from time to time, may reasonably request,  bearing upon or related
     to this  Agreement,  the  Collateral  or  Borrower's  financial  condition,
     prospects or results of operations.

            Concurrently with the delivery of the financial statements described
in clause (i) of this subsection 5.7, Borrower shall forward to Lender a copy of
the accountants' letter to Borrower's  management that is prepared in connection
with such  financial  statements  and also shall cause to be prepared  and shall
furnish to Lender a certificate of the aforesaid  certified  public  accountants
certifying  to Lender  that,  based  upon  their  examination  of the  financial
statements of Borrower  performed in connection  with their  examination of said
financial statements, they are not aware of any Default or Event of Default, or,
if they are aware of such  Default or Event of  Default,  specifying  the nature
thereof,  and acknowledging,  in a manner  satisfactory to Lender, that they are
aware that Lender is relying on such financial statements.

      Section 5.8  Projections.  No later than thirty (30) days prior to the end
of each fiscal year of  Borrower,  Borrower  shall  deliver to Lender  financial
projections of Borrower for the forthcoming  three (3) years,  year by year, and
for the forthcoming  fiscal year, month by month,  with  appropriate  supporting
documentation.

      Section 5.9  Conversion  Shares.  Any Conversion  Shares issued  hereunder
shall, when issued, be duly and validly authorized,  validly issued,  fully paid
and non-assessable and free of any Lien.

      Section 5.10 Other  Information.  The Borrower shall furnish to the Lender
such other  information  and reports in form and substance  satisfactory  to the
Lender as and when the Lender may from time to time reasonably request.

                                   ARTICLE 6

                               NEGATIVE COVENANTS

      The Borrower  covenants  and agrees with the Lender and warrants  that, as
long as the Total Borrowings shall remain unpaid:

      Section 6.1  Limitation on Liens.  The Borrower  shall not create,  incur,
assume or suffer to exist any Lien upon any of the  Collateral,  except  for the
Permitted Liens.

      Section 6.2  Limitation on Sale of Assets.  The Borrower shall not convey,
sell,  lease,  assign,  transfer or otherwise  dispose of any of the Collateral,
absent the written consent of the Lender and upon such sale or disposition,  the
proceeds thereof shall be paid to Lender.

      Section  6.3  Change of  Locations.  The  Borrower  shall not  remove  the
Collateral from the location or jurisdiction set forth in Schedule 3.11;  unless
(a) the Borrower gives the Lender prior written  consent  thereto (which consent
shall not be unreasonably withheld); and (b) a financing statement covering such
location  of the  Collateral  is on  file  and  of  record  in  the  appropriate
governmental  office  creating a valid first lien and  security  interest in the
Collateral in favor of the Lender.



                                      -13-
<PAGE>

      Section 6.4 Mergers; Consolidations;  Acquisitions. The Borrower shall not
merge or consolidate,  with any Person; nor acquire, all or any substantial part
of the properties or assets of any Person.

      Section 6.5 Loans. The Borrower shall not make any loans or other advances
of money (other than for salary,  travel advances,  advances against commissions
and other similar advances in the ordinary course of business) to any Person.

      Section 6.6 Total  Indebtedness.  The  Borrower  shall not create,  incur,
assume, or suffer to exist, any indebtedness, except:

          (i) Obligations owing to Lender;

          (ii) Indebtedness existing on the date of this Agreement and disclosed
     to Lender in writing;

          (iii)  Accounts  payable  to trade  creditors  and  current  operating
     expenses  which are not aged more than sixty (60) days from billing date or
     more than thirty (30) days from the due date,  in each case incurred in the
     ordinary  course of business and paid within such time  period,  unless the
     same are being  actively  contested  in good faith and by  appropriate  and
     lawful  proceedings;  and Borrower shall have set aside such  reserves,  if
     any,  with respect  thereto as are required by GAAP and deemed  adequate by
     Borrower and its independent accountants; and

          (iv)  Indebtedness  not included in paragraphs (i) through (iii) above
     which  does  not  exceed  at  any  time,  in  the  aggregate,  the  sum  of
     $250,000.00.

      Section 6.7 Capital  Expenditures.  The  Borrower  shall not make  capital
expenditures  (including,  without  limitation,  by way of  capitalized  leases)
which, in the aggregate, exceed $250,000.00 during any fiscal year.

      Section  6.8  Operating  Income.  The  Borrower  shall  have  a  quarterly
Operating  Income of not less than  $250,000.00 and its annual  Operating Income
shall not be less than  $100,000.00.  In  addition,  Borrower  shall  provide to
Lender  promptly at the end of each fiscal quarter and year, as  applicable,  an
analysis of the quarterly  and/or annual  operating  income  statements  and all
requested supporting documentation.

      Section 6.9  Dividends.  The Borrower  shall not make,  pay or declare any
dividend or other distribution on the Capital Stock of Borrower, absent Lender's
prior written consent.


                                   ARTICLE 7

                         EVENTS OF DEFAULT AND REMEDIES

      Section 7.1 Events of Default.  The  occurrence  of any one or more of the
following events shall constitute an Event of Default:



                                      -14-
<PAGE>

            (a)  Payments.  Failure by the  Borrower to pay any  interest on the
Note within five (5) Business Days of when it is due and payable or declared due
and payable,  as the case may be or failure by the Borrower to pay any principal
on the  Note on the  date on which it is due and  payable  or  declared  due and
payable, as the case may be.

            (b) Commencement of Bankruptcy or Reorganization Proceeding.

               (1)  The Borrower  shall  commence any case,  proceeding or other
                    action  (A)  under  any   existing  or  future  law  of  any
                    jurisdiction,  domestic or foreign,  relating to bankruptcy,
                    insolvency,  reorganization or relief of debtors, seeking to
                    have an order for  relief  entered  with  respect  to it, or
                    seeking  to  adjudicate  it as  bankrupt  or  insolvent,  or
                    seeking reorganization,  arrangement,  adjustment,  wind-up,
                    liquidation,  dissolution,  composition or other relief with
                    respect to it or its debts, or (B) seeking  appointment of a
                    receiver,  trustee,  custodian or other similar official for
                    it or for all or any substantial part of its assets; or

               (2)  There shall be commenced against the Borrower any such case,
                    proceeding  or other action which results in the entry of an
                    order for relief or any such  adjudication or appointment or
                    remains  undismissed,  undischarged or unbonded for a period
                    of thirty (30) days; or

               (3)  There  shall be  commenced  against the  Borrower  any case,
                    proceeding or other action seeking  issuance of a warrant of
                    attachment,  execution, distraint or similar process against
                    all or any  substantial  part of its assets which results in
                    the entry of an order for any such  relief  which  shall not
                    have been vacated,  discharged,  or stayed or bonded pending
                    appeal within thirty (30) days from the entry thereof.

            (c)  Assignments  and  Delegations.  Any attempt by the  Borrower to
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Lender.

            (d) Misrepresentations.  Any representation or warranty herein or in
any  certificate or instrument  finished by Borrower to Lender  pursuant to this
Agreement, proves to have been false or misleading in any material respect.

            (e) Covenants.  Borrower fails to perform or observe any covenant or
agreement  contained  herein or in any Loan Document and such failure  continues
unremedied  ten (10) days from the date on which the Borrower first became aware
of such failure.

            (f)  Collateral.  Any material loss,  destruction or theft of any of
the Collateral not fully covered by insurance.

            (g) Material Adverse Change.  There shall occur any material adverse
change in Borrower's financial condition or prospects.



                                      -15-
<PAGE>

            (h) Ownership.  The  stockholders of Lender,  as of the Distribution
Date,  shall cease to own and control at least 51% of the issued and outstanding
stock of Borrower.

            (i)  Other  Defaults.  There  shall  occur any  default  or event of
default on the part of Borrower under any  agreement,  document or instrument to
which  Borrower is a party or by which Borrower or any of its assets or property
is bound,  creating or relating to any indebtedness (other than the Obligations)
if the payment or maturity of such indebtedness is accelerated in consequence of
such event of default or demand for payment of such indebtedness is made.

      Section 7.2 Remedies. Upon the occurrence of an Event of Default described
in this Article 7, the Lender, at its option, may:

            (a) declare the  Obligations  of the  Borrower  immediately  due and
payable,  without  presentment,  notice,  protest  or demand of any kind for the
payment of all or any part of the Obligations (all of which are expressly waived
by the  Borrower)  and  exercise  all of its rights  and  remedies  against  the
Borrower and any Collateral  provided herein or in any other  agreement  between
the Borrower and the Lender, and

            (b) exercise all rights granted to a secured party under the Uniform
Commercial Code or otherwise,  provided, that upon the occurrence of an Event of
Default  described in Section 7.1(b) above, all of the Obligations  shall become
automatically due and payable without declaration, notice or demand by Lender.

Upon the  occurrence  and during the  continuance  of an Event of  Default,  the
Lender shall have the right, without notice of advertisement, to sell, lease, or
otherwise  dispose  of all or any  part  of the  Collateral  in the  name of the
Borrower,  or the  Lender,  or in the name of such other party as the Lender may
designate, either at public or private sale or at any broker's board, in lots or
in bulk, for cash or for credit,  with or without warranties or representations,
and upon such other terms and conditions as the Lender,  in its sole discretion,
may deem advisable,  and the Lender shall have the right to purchase at any such
sale. If any such Collateral shall require rebuilding, repairing, maintenance or
preparation,  the Lender shall have the right, at its option,  to do such of the
aforesaid as is  necessary,  for the purpose of putting such  Collateral in such
saleable form as the Lender shall deem appropriate.  The Borrower agrees, at the
request of the Lender but at Borrower's expense, to assemble such Collateral and
to make it available  to the Lender,  at its  direction,  either at the Lender's
place of  residence,  at the  premises  of the  Borrower or such other place the
Lender  may  direct  and to  make  available  to the  Lender  the  premises  and
facilities of the Borrower for the purpose of the Lender's taking possession of,
removing or putting such  Collateral  in saleable  form.  However,  if notice of
intended disposition of any Collateral is required by law, it is agreed that ten
(10) Business Days' notice shall  constitute  reasonable  notification  and full
compliance  with the law.  The net cash  proceeds  resulting  from the  Lender's
exercise of any of the foregoing rights (after deducting all charges,  costs and
expenses including reasonable attorneys' fees) shall be applied by the Lender to
the  payment of the  Obligations,  whether  due or to become due, as provided in
Section  2.5.  The  Borrower   shall  remain   liable  to  the  Lender  for  any
deficiencies,  and the Lender in turn  agrees to remit to the  Borrower,  or its
successors or assigns, any surplus resulting  therefrom.  The enumeration of the
foregoing  rights



                                      -16-
<PAGE>

is not  intended  to be  exhaustive  and the  exercise  of any  right  shall not
preclude the exercise of any other rights, all of which shall be cumulative.

      Section 7.3  Application of Proceeds.  The Lender shall apply the proceeds
of any  disposition  of the  Collateral  to the  payment of the  Obligations  in
accordance with the provisions of Section 2.5 hereof.

      Section 7.4 Set-Off. The Lender shall have the right, without prior notice
to the Borrower,  any such notice being expressly waived to the extent permitted
by applicable law, to set-off and apply against the payment of the  Obligations,
whether  matured or unmatured,  any amount owing from the Lender to the Borrower
at, or at any time after, the happening of any Event of Default,  and such right
of set-off may be  exercised  by the Lender  against the Borrower or against any
trustee  in  bankruptcy,  debtor in  possession,  assignee  for the  benefit  of
creditors,  receiver, custodian or execution, judgment or attachment creditor of
the Borrower, or against anyone else claiming through or against the Borrower or
such trustee in bankruptcy,  debtor in  possession,  assignee for the benefit of
creditors,   receivers,   or  execution,   judgment  or   attachment   creditor,
notwithstanding  the  fact  that  such  right of  set-off  shall  not have  been
exercised by the Lender prior to the making, filing or issuance, or service upon
the Lender of, or of notice of, any such petition, assignment for the benefit of
creditors,  appointment or  application  for the  appointment of a receiver,  or
issuance of execution, subpoena, order or warrant.

      Section 7.5 Rights Cumulative; Waiver. The rights, options and remedies of
the  Lender  shall be  cumulative  and no  failure  or delay  by the  Lender  in
exercising  any right,  option or remedy shall be deemed a waiver  thereof or of
any other right,  option or remedy, or waiver of any Event of Default hereunder,
nor shall any  single or partial  exercise  of any such  right,  power or remedy
preclude  any other or further  exercise  thereof or the  exercise  of any other
right, power or remedy hereunder.  The Lender shall not be deemed to have waived
any of the Lender's rights hereunder or under any other agreement, instrument or
paper signed by the  Borrower  unless such waiver shall be in writing and signed
by the Lender in accordance with the provisions hereof.

                                   ARTICLE 8

              COLLECTION OF COLLATERAL AND NOTICE OF ASSIGNMENT

      Section 8.1  Disclaimer  of  Liability.  The Lender  shall not,  under any
circumstances,  be  liable  for any  error  or  omission  or  delay  of any kind
occurring in the  settlement,  collection or payment of any of the Collateral or
any  instruments  received  in  payment  thereof  or for  any  damage  resulting
therefrom,  unless caused by the Lender's willful acts or gross negligence.  The
Lender shall not be liable for or prejudiced by any loss,  depreciation or other
damage to the  Collateral  unless caused by the Lender's  willful,  malicious or
gross  negligence  act,  and the Lender shall have no duty to take any action to
preserve or collect any of the Collateral.



                                      -17-
<PAGE>

                                   ARTICLE 9

                                  MISCELLANEOUS

      Section 9.1 Amendments and Waivers.  The Borrower and the Lender may amend
this  Agreement or the Note,  and the Lender may waive future  compliance by the
Borrower with any provision of this Agreement or the Note, but no such amendment
or waiver  shall be  effective  unless in a written  instrument  executed  by an
authorized officer of the Lender and the Borrower.

      Section 9.2  Notices.  All notices,  consents,  requests and demands to or
upon the  respective  parties hereto shall be in writing and,  unless  otherwise
expressly provided herein,  shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail,  postage  prepaid,  or, in the
case of telex, telegraphic or telecopy notice, when sent, addressed as follows:

            If to the Lender:   Casual Male Retail Group, Inc.
                                 555 Turnpike Street
                                Canton, Massachusetts  02021
                                Attn:  General Counsel/Chief Financial Officer
                                Fax: _______________________

            If to the Borrower:     LP Innovations, Inc.
                                 330 Turnpike Street
                                Canton, Massachusetts  02021
                                Attn:  President/Chief Financial Officer
                                Fax: _______________________

      Notices of changes of address shall be given in the same manner.

      Section 9.3  Successors  and Assigns.  This Agreement will be binding upon
and inure to the  benefit  of the  Borrower,  the  Lender  and their  respective
successors and assigns,  except that the Borrower may not assign or transfer any
of its rights or  obligations  under this  Agreement  without the prior  written
consent of the Lender.  Such  consent may be refused for any reason or no reason
at all. Any attempt by the Borrower to transfer any of its rights or obligations
under this  Agreement  without the prior  written  consent of the Lender will be
null and void and shall constitute an Event of Default under Section 7.1. If the
Lender  transfers its Note and its rights under this Agreement,  then the Lender
shall be relieved and released from its obligations hereunder.

      Section 9.4 Collection  Costs. All reasonable costs and expenses  incurred
by the Lender to obtain,  enforce or preserve the security  interests granted by
this Agreement and to collect the Obligations,  including,  without  limitation,
all  reasonable  out-of-pocket  costs,  all  reasonable  costs to  maintain  and
preserve the Collateral and all  reasonable  attorneys'  fees and legal expenses
incurred  in  obtaining  or  enforcing  payment  of any of  the  Obligations  or
foreclosing the Lender's  security  interest in any of the  Collateral,  whether
through  judicial  proceedings  or otherwise,  or in enforcing or protecting its
rights and  interests  under this  Agreement  or under any other  instrument  or
document delivered pursuant hereto, or in protecting



                                      -18-
<PAGE>

the rights of any holder or holders  with  respect  thereto,  or in defending or
prosecuting  any  actions  or  proceedings  arising  out of or  relating  to the
Lender's  transactions  with the Borrower,  shall be paid by the Borrower to the
Lender,  upon demand,  and the Lender may take judgment against the Borrower for
all such costs,  expense and fees in addition to all other  amounts due from the
Borrower hereunder.

      Section 9.5 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate  counterparts and all of
said counterparts  taken together shall be deemed to constitute one and the same
instrument.

      Section 9.6 Governing  Law. This Agreement and the Note and the rights and
obligations of the parties under this Agreement and the Note is governed by, and
shall be construed and interpreted in accordance  with, the laws of the State of
New York, without regard to New York choice of law provisions.

      Section 9.7 Consent to  Jurisdiction.  The Borrower hereby  absolutely and
irrevocably  consents and submits to the jurisdiction of the courts of the State
of New York and of any  federal  court  located in the said state in  connection
with any  actions or  proceedings  brought  against  the  Borrower by the Lender
arising  out of or  relating  to this  Agreement,  the  Note or any  other  Loan
Documents. The Borrower hereby waives and shall not assert in any such action or
proceeding, in each case, to the fullest extent permitted by applicable law, any
claim that (a) the Borrower is not personally subject to the jurisdiction of any
such court,  (b) the Borrower is immune from any legal process  (whether through
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise)  with respect to it or its property,  (c) any such suit,
action or proceeding is brought in an inconvenient  forum,  (d) the venue of any
such suit, action or proceeding is improper, or (e) this Agreement,  the Note or
any Loan  Document  may not be  enforced  in or by any such  court.  In any such
action or  proceeding,  the Borrower  hereby  absolutely and  irrevocably  waive
personal  service of any summons,  complaint,  declaration  or other process and
hereby  absolutely and irrevocably agree that the service thereof may be made as
the Lender may elect, by certified mail directed to the Borrower at the location
provided  for  notices  to  the  Borrower   under  this  Agreement  or,  in  the
alternative,  in any other form or manner  permitted by law. The Borrower hereby
agrees that they will appear or answer any such summons, complaint,  declaration
or other  process so served upon them within  thirty (30) days after  receipt of
notice  thereof.  Any action  brought by the  Borrower in  connection  with this
Agreement or the transactions  contemplated hereby shall be brought in any state
or federal court sitting in the State of New York. Anything  hereinbefore to the
contrary  notwithstanding,  the Lender hereof may sue the Borrower in the courts
of any other country,  state of the United States or place where the Borrower or
any of  the  property  or  assets  may be  found  or in  any  other  appropriate
jurisdictions.

      Section 9.8 WAIVER OF JURY TRIAL. AS A SPECIFICALLY  BARGAINED  INDUCEMENT
FOR THE LENDER TO MAKE CREDIT  AVAILABLE TO THE  BORROWER,  AND AFTER HAVING THE
OPPORTUNITY TO CONSULT ITS ADVISORS AND COUNSEL,  THE BORROWER HEREBY  EXPRESSLY
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING  RELATING TO THIS
AGREEMENT OR ARISING IN ANY WAY FROM THE OBLIGATIONS.


                                      -19-
<PAGE>


      Section 9.9 Other  Waivers.  The  Borrower  waives  notice of  nonpayment,
demand,  notice of demand,  presentment,  protest  and  notice of  protest  with
respect to the Obligations,  or notice of acceptance hereof,  notice of the Loan
made or Previous  Advances  extended,  credit extended,  Collateral  received or
delivered,  or any other action taken in reliance hereon,  and all other demands
and  notices of any  description,  except  such as are  expressly  provided  for
herein.

      Section 9.10 Power of Attorney.  Borrower hereby  irrevocably  designates,
makes, constitutes and appoints Lender (and all Persons designated by Lender) as
Borrower's true and lawful attorney (and  agent-in-fact) and Lender, or Lender's
agent,  may,  without notice to Borrower at any time, after the occurrence of an
Event of Default, and in either Borrower's or Lender's name, but at the cost and
expense of Borrower  act and  perform  under this  Agreement  and the other Loan
Documents as the Lender sees fit in its sole discretion.

      Section 9.11  Indemnity.  Borrower  hereby agrees to indemnify  Lender and
hold Lender harmless from and against any liability,  loss, damage, suit, action
or  proceeding  ever  suffered  or  incurred  by  Lender  (including  reasonable
attorneys  fees and legal  expenses)  as the  result of  Borrower's  failure  to
observe, perform or discharge Borrower's duties hereunder. In addition, Borrower
shall defend  Lender  against and save it harmless from all claims of any Person
with  respect  to  the  Collateral.  Without  limiting  the  generality  of  the
foregoing,  these indemnities shall extend to any claims asserted against Lender
by any  Person  under  any  environmental  laws or  similar  laws by  reason  of
Borrower's or any other Person's failure to comply with laws applicable to solid
or hazardous  waste  materials or other toxic  substances.  Notwithstanding  any
contrary  provision in this  Agreement,  the  obligation of Borrower  under this
Section  9.11  shall  survive  the  payment in full of the  Obligations  and the
termination of this Agreement.

      Section 9.12 Entire  Agreement.  This Agreement,  the other Loan Documents
and the Other Agreements,  embody the entire understanding and agreement between
the parties  hereto and thereto  with respect to the subject  matter  hereof and
thereof and  supersede all prior  agreements,  understandings  and  inducements,
whether express or implied, oral or written.

      Section 9.13 Interpretation.  No provision of this Agreement or any of the
other  Loan  Documents  shall  be  construed   against  or  interpreted  to  the
disadvantage of any party hereto by any court or other  governmental or judicial
authority by reason of such party having or being deemed to have  structured  or
dictated such provision.


                                      -20-
<PAGE>


      IN WITNESS WHEREOF, the parties have duly executed this Loan and Agreement
by their duly authorized officers as of the date first above written.


                                    LENDER:

                                    CASUAL MALE RETAIL GROUP, INC.


                                    By:
                                       ---------------------------------
                                       Name:
                                       Title:


                                    BORROWER:

                                    LP INNOVATIONS, INC.


                                    By:
                                       ---------------------------------
                                       Name:
                                       Title:



                                      -21-
<PAGE>


                       CONVERTIBLE SECURED PROMISSORY NOTE
                       -----------------------------------


$1,500,000.00                                                 New York, New York
                                                              ____________, 2002


      FOR  VALUE  RECEIVED,   the   undersigned,   LP  INNOVATIONS,   INC.  (the
"Borrower"),  a Nevada corporation,  with its principal place of business at 330
Turnpike Street, Canton, Massachusetts 02021, hereby unconditionally promises to
pay to the order of CASUAL MALE RETAIL GROUP, INC.  (together with any successor
or assign, the "Lender"),  a Delaware  corporation,  with its principal place of
business at 555 Turnpike Street, Canton, Massachusetts 02021, in lawful money of
the United States of America and in immediately  available  funds, the principal
amount of ONE MILLION  FIVE  HUNDRED  THOUSAND  DOLLARS  ($1,500,000.00)  on the
Maturity Date, or as much of such principal  amount as shall be outstanding  and
unpaid on such Maturity Date. The Borrower further promises to pay interest,  in
lawful money of the United States of America and in immediately  available funds
on the  unpaid  principal  balance  of,  and,  in certain  cases,  on the unpaid
interest  due on, this  Secured  Promissory  Note (the "Note") from time to time
outstanding  at the rate and  computed  in the manner  provided  in the Loan and
Security  Agreement  (the "Loan  Agreement"),  dated as of  ____________,  2002,
between  the  Borrower  and the Lender but in no event in excess of the  maximum
rate of interest permitted under applicable law.  Capitalized terms used and not
otherwise defined herein shall have the respective  meanings ascribed to them in
the Loan Agreement.

      This Note is the  convertible  secured  promissory note referred to in the
Loan Agreement, is secured as provided in the Loan Agreement,  and the Lender is
entitled to all the benefits  thereof.  The Borrower shall make when due any and
all payments  and  prepayments  (including  mandatory  prepayments  on this Note
required  under  the  Loan  Agreement.  Reference  is  herein  made to the  Loan
Agreement for the rights of the Lender to accelerate  the unpaid  balance hereof
prior to the Maturity Date and, at its sole option, to receive Conversion Shares
and all other obligations of the Borrower.

      The  Borrower  hereby  waives any rights of  set-off,  diligence,  demand,
presentment,  protest and notice of any kind, release, surrender or substitution
of security, or forbearance or other indulgence.

      This Note may not be changed,  modified, or terminated orally, but only by
an agreement in writing signed by both parties.

      IN THE EVENT OF ANY  LITIGATION  WITH  RESPECT TO THIS NOTE,  THE BORROWER
KNOWINGLY AND VOLUNTARILY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) THE
RIGHT TO A TRIAL BY JURY AND THE DEFENSES OF FORUM NON  CONVENIENS  AND IMPROPER
VENUE.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT  REGARD TO  PRINCIPLES  OF CONFLICT OF LAWS AND
SHALL BE BINDING  UPON THE  SUCCESSORS  AND ASSIGNS OF THE BORROWER AND INURE TO
THE  BENEFIT  OF THE  LENDER  AND ITS  SUCCESSORS


<PAGE>

AND  ASSIGNS.  If any item or  provision  of this  Note  shall be held  invalid,
illegal or unenforceable,  the validity of all other terms and provisions herein
shall in no way be affected thereby.

      IN  WITNESS  WHEREOF,   the  Borrower  has  executed  and  delivered  this
Convertible Secured Promissory Note on the date first above written.

                                          LP INNOVATIONS, INC.


                                          ---------------------------
                                          Name:
                                          Title:

                                       -2-