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                             TMCI ELECTRONICS, INC.
                       TOUCHE MANUFACTURING COMPANY, INC.,
                            TOUCHE ELECTRONICS, INC.,
                        ENTERPRISE INDUSTRIES, INC., and
                            TRINITY ELECTRONICS, INC.

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                           LOAN AND SECURITY AGREEMENT
                              Dated: March 2, 1998
                                 $25,000,000.00
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                            FLEET CAPITAL CORPORATION
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<PAGE>


                                      (vi)
                                TABLE OF CONTENTS

                                                                            Page


SECTION 1. CREDIT FACILITY...................................................1

  1.1 Revolving Credit Loans.................................................1
    1.1.1 Loans and Reserves.................................................1
    1.1.2 Use of Proceeds....................................................1

  1.2 Term and Equipment Loans...............................................2
    1.2.1 Term Loans-A.......................................................2
    1.2.2 Term Loan-B........................................................2
    1.2.3 Equipment Loans....................................................2

  1.3 Letters of Credit; LC Guaranties.......................................2


SECTION 2. INTEREST, FEES AND CHARGES........................................2

  2.1 Interest...............................................................2
    2.1.1 Rates of Interest..................................................2
    2.1.2 Default Rate of Interest...........................................3
    2.1.3 Maximum Interest...................................................3
    2.1.4 Adjustment to Interest Rate Margin.................................3
    2.1.5 LIBOR Rate Loans...................................................3

  2.2 Computation of Interest and Fees.......................................3

  2.3 Commitment Fee.........................................................4

  2.4 Letter of Credit and LC Guaranty Fees..................................4

  2.5 Unused Line Fee........................................................4

  2.6 Reimbursement of Expenses..............................................4

  2.7 Bank Charges...........................................................5


SECTION 3. LOAN ADMINISTRATION...............................................5

  3.1 Manner of Borrowing Revolving Credit Loans.............................5
    3.1.1 Loan Requests......................................................5
    3.1.2 Disbursement.......................................................6
    3.1.3 Authorization......................................................6

  3.2 Payments...............................................................6
    3.2.1 Principal on Revolving Credit Loans................................6
    3.2.2 Principal on Term Loans and Equipment Loans........................6
    3.2.3 Interest...........................................................7
    3.2.4 Costs, Fees and Charges............................................7
    3.2.5 Other Obligations..................................................7

  3.3 Mandatory Prepayments..................................................7

  3.4 Application of Payments and Collections................................7

  3.5 All Loans to Constitute One Obligation.................................7

  3.6 Loan Accounts..........................................................8

  3.7 Statements of Account..................................................8

  3.8 Appointment of TMCI as Agent...........................................8

  3.9 Funding Losses on LIBOR Loans..........................................8

  3.10 Changes in Law and LIBOR Loans........................................9


SECTION 4. TERM AND TERMINATION..............................................9

  4.1 Term of Agreement......................................................9

  4.2 Termination............................................................9
    4.2.1 Termination by Lender..............................................9
    4.2.2 Termination by Borrower...........................................10
    4.2.3 Termination Charges...............................................10
    4.2.4 Effect of Termination.............................................10


SECTION 5. SECURITY INTERESTS...............................................10

  5.1 Security Interest in Collateral.......................................11

  5.2 Lien Perfection; Further Assurances...................................11


SECTION 6. COLLATERAL ADMINISTRATION........................................11

  6.1 General...............................................................12
    6.1.1 Location of Collateral............................................12
    6.1.2 Insurance of Collateral...........................................12
    6.1.3 Protection of Collateral..........................................12

  6.2 Administration of Accounts............................................12
    6.2.1 Records, Schedules and Assignments of Accounts....................12
    6.2.2 Discounts, Allowances, Disputes...................................13
    6.2.3 Taxes.............................................................13
    6.2.4 Account Verification..............................................13
    6.2.5 Maintenance of Dominion Account...................................13
    6.2.6 Collection of Accounts, Proceeds of Collateral....................14

  6.3 Administration of Inventory...........................................14
    6.3.1 Records and Reports of Inventory..................................14
    6.3.2 Returns of Inventory..............................................14

  6.4 Administration of Equipment...........................................14

  6.4 Administration of Equipment...........................................14
    6.4.1 Records and Schedules of Equipment................................14
    6.4.2 Dispositions of Equipment.........................................14

  6.5 Payment of Charges....................................................15


SECTION 7. REPRESENTATIONS AND WARRANTIES...................................15

  7.1 General Representations and Warranties................................15
    7.1.1 Organization and Qualification....................................15
    7.1.2 Corporate Power and Authority.....................................15
    7.1.3 Legally Enforceable Agreement.....................................16
    7.1.4 Capital Structure.................................................16
    7.1.5 Corporate Names...................................................16
    7.1.6 Business Locations; Agent for Process.............................16
    7.1.7 Title to Properties; Priority of Liens............................16
    7.1.8 Accounts..........................................................16
    7.1.9 Equipment.........................................................17
    7.1.10 Financial Statements; Fiscal Year................................18
    7.1.11 Full Disclosure..................................................18
    7.1.12 Solvent Financial Condition......................................18
    7.1.13 Surety Obligations...............................................18
    7.1.14 Taxes............................................................18
    7.1.15 Brokers..........................................................19
    7.1.16 Patents, Trademarks, Copyrights and Licenses.....................19
    7.1.17 Governmental Consents............................................19
    7.1.18 Compliance with Laws.............................................19
    7.1.19 Restrictions.....................................................19
    7.1.20 Litigation.......................................................19
    7.1.21 No Defaults......................................................20
    7.1.22 Leases...........................................................20
    7.1.23 Pension Plans....................................................20
    7.1.24 Trade Relations..................................................20
    7.1.25 Labor Relations..................................................20
    7.1.26 Environmental Matters............................................20
    7.1.27 Interdependent Businesses and Operations.........................21
    7.1.28 Acquisitions.....................................................21

  7.2 Continuous Nature of Representations and Warranties...................21

  7.3 Survival of Representations and Warranties............................21


SECTION 8. COVENANTS AND CONTINUING AGREEMENTS..............................21

  8.1 Affirmative Covenants.................................................21
    8.1.1 Visits and Inspections............................................21
    8.1.2 Notices...........................................................22
    8.1.3 Financial Statements..............................................22
    8.1.4 Landlord and Storage Agreements...................................23
    8.1.5 Intentionally Deleted.............................................23
    8.1.6 Projections.......................................................23
    8.1.7 Compliance with Laws..............................................23
    8.1.8 Payment of Taxes, Charges.........................................24
    8.1.9 Business and Existence............................................25
    8.1.10 Maintain Properties..............................................25
    8.1.11 ERISA Compliance.................................................25

  8.2 Negative Covenants....................................................25
    8.2.1 Mergers; Consolidations; Acquisitions.............................25
    8.2.2 Loans.............................................................26
    8.2.3 Total Indebtedness................................................26
    8.2.4 Affiliate Transactions............................................27
    8.2.5 Limitation on Liens...............................................27
    8.2.6 Subordinated Debt.................................................27
    8.2.7 Distributions.....................................................27
    8.2.8 Capital Expenditures..............................................28
    8.2.9 Disposition of Assets.............................................28
    8.2.10 Stock of Subsidiaries............................................28
    8.2.11 Bill-and-Hold Sales, Etc.........................................28
    8.2.12 Restricted Investment............................................28
    8.2.13 Leases...........................................................28
    8.2.14 Tax Consolidation................................................28
    8.2.15 Fiscal Year......................................................28

  8.3 Specific Financial Covenants..........................................28
    8.3.2 Minimum Adjusted Tangible Net Worth...............................28
    8.3.2 Cash Flow.........................................................29


SECTION 9. CONDITIONS PRECEDENT.............................................29

  9.1 Conditions to Initial Loans and LC Guaranties.........................29
    9.1.1 Documentation.....................................................29
    9.1.2 Other Loan Documents..............................................29
    9.1.3 Availability......................................................29
    9.1.4 No Litigation.....................................................30
    9.1.5 Acquisitions......................................................30
    9.1.6 Landlord Waivers..................................................30
    9.1.7 Lien Filings......................................................30
    9.1.8 Insurance.........................................................30
    9.1.9 Subordinated Debt.................................................30
    9.1.10 Solvency.........................................................30
    9.1.11 No Material Adverse Change.......................................30
    9.1.12 Pen Electronics Litigation.......................................31
    9.1.13 Inventory Testing/Analysis.......................................31

  9.2 Conditions to All Loans and LC Guaranties.............................31


SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT...............31

  10.1 Events of Default....................................................31
    10.1.1 Payment of Notes.................................................31
    10.1.2 Payment of Other Obligations.....................................31
    10.1.3 Misrepresentations...............................................31
    10.1.4 Breach of Specific Covenants.....................................32
    10.1.5 Breach of Other Covenants........................................32
    10.1.6 Default Under Security Documents/Other Agreements /Purchase
    Documents...............................................................32
    10.1.7 Other Defaults...................................................32
    10.1.8 Uninsured Losses.................................................32
    10.1.9 Adverse Changes..................................................32
    10.1.10 Insolvency and Related Proceedings..............................32
    10.1.11 Business Disruption; Condemnation...............................32
    10.1.12 Change of Ownership.............................................33
    10.1.13 ERISA...........................................................33
    10.1.14 Challenge to Agreement..........................................33
    10.1.15 Intentionally Omitted...........................................33
    10.1.16 Criminal Forfeiture.............................................33
    10.1.17 Judgments.......................................................33

  10.2 Acceleration of the Obligations......................................33

  10.3 Other Remedies.......................................................34

  10.4 Remedies Cumulative; No Waiver.......................................35


SECTION 11. MISCELLANEOUS...................................................35

  11.1 Power of Attorney....................................................35

  11.2 Indemnity............................................................36

  11.3 Modification of Agreement; Sale of Interest..........................37

  11.4 Severability.........................................................37

  11.5 Successors and Assigns...............................................37

  11.6 Cumulative Effect; Conflict of Terms.................................37

  11.7 Execution in Counterparts............................................37

  11.8 Notice...............................................................38

  11.9 Intentionally Omitted................................................39

  11.10 Joint and Several Liability.........................................39

  11.11 Suretyship Waivers and Consents.....................................39

  11.12 Contribution Agreement..............................................41

  11.13 Credit Inquiries....................................................42

  11.14 Time of Essence.....................................................42

  11.15 Entire Agreement....................................................42

  11.16 Interpretation......................................................43

  11.17 Governing Law; Consent To Forum.....................................43

  11.18 Waivers By Borrowers................................................44

  11.19 Prejudgement Remedy Waiver; Commercial Transaction..................44



<PAGE>


                                     -46-
                           LOAN AND SECURITY AGREEMENT

      THIS LOAN AND SECURITY  AGREEMENT is made this 2nd day of March,  1998, by
and between FLEET CAPITAL  CORPORATION  ("Lender"),  a Rhode Island  corporation
with an office at 200 Glastonbury Boulevard, Glastonbury,  Connecticut 06033 and
TMCI ELECTRONICS,  INC., a Delaware corporation  ("TMCI"),  TOUCHE MANUFACTURING
COMPANY,  INC.,  a  California  corporation  ("Touche  Manufacturing"),   TOUCHE
ELECTRONICS,  INC., a California corporation ("Touche Electronics"),  ENTERPRISE
INDUSTRIES,   INC.,  a  California   corporation   ("Enterprise")   and  TRINITY
ELECTRONICS,   INC.,  a  California   corporation   ("Trinity")  (TMCI,   Touche
Manufacturing,  Touche Electronics,  Enterprise and Trinity are each referred to
as a "Borrower" and collectively as the "Borrowers")  with their chief executive
office  and  principal  place  of  business  at 1875  Dobbin  Drive,  San  Jose,
California  95133.  Capitalized  terms used in this  Agreement have the meanings
assigned  to them in  Appendix  A,  General  Definitions.  Accounting  terms not
otherwise specifically defined herein shall be construed in accordance with GAAP
consistently applied.

SECTION 1.    CREDIT FACILITY

      Subject  to the  terms  and  conditions  of,  and  in  reliance  upon  the
representations  and  warranties  made in,  this  Agreement  and the other  Loan
Documents, Lender agrees to make a Total Credit Facility of up to $25,000,000.00
available upon Borrowers' request therefor, as follows:

1.1   Revolving Credit Loans.
      1.1.1  Loans and  Reserves.  Lender  agrees,  for so long as no Default or
Event of Default exists,  to make Revolving  Credit Loans to Borrowers from time
to time, as requested by Borrowers in the manner set forth in  subsection  3.1.1
hereof,  up to a maximum  principal amount at any time outstanding  equal to the
Borrowing  Base at such time minus the LC Amount and  reserves,  if any.  Lender
shall have the right to establish reserves in such amounts,  and with respect to
such matters, as Lender shall deem reasonably necessary or appropriate,  against
the amount of Revolving Credit Loans which Borrowers may otherwise request under
this subsection 1.1.1, including,  without limitation,  with respect to (i) sums
chargeable  against  Borrowers' Loan Account as Revolving Credit Loans under any
section of this  Agreement;  (ii) amounts owing by any Borrower to any Person to
the extent  secured by a Lien on, or trust over,  any Property of any  Borrower;
and (iii) such other matters,  events,  conditions or  contingencies as to which
Lender,  in its  reasonable  credit  judgment,  determines  reserves  should  be
established from time to time hereunder.

      1.1.2 Use of Proceeds. The Revolving Credit Loans shall be used solely for
the satisfaction of existing  Indebtedness of Borrowers to  Manufacturers  Bank,
and for Borrowers'  general  operating capital needs in a manner consistent with
the provisions of this Agreement and all applicable laws.

1.2   Term and Equipment Loans.

      1.2.1 Term Loan-A.  Lender  agrees to make a term loan to Borrowers on the
Closing Date in the principal amount of $4,700,000.00,  which shall be repayable
in  accordance  with the terms of the Term Note-A and shall be secured by all of
the  Collateral.  The  proceeds  of the Term  Loan-A  shall be used  solely  for
purposes for which the proceeds of the Revolving  Credit Loans are authorized to
be used.

      1.2.2 Term Loan-B.  Lender  agrees to make a second term loan to Borrowers
on the Closing Date in the  principal  amount of  $2,000,000.00,  which shall be
repayable in  accordance  with the terms of the Term Note-B and shall be secured
by all of the  Collateral.  The proceeds of the Term Loan-B shall be used solely
for the purposes for which the proceeds of Revolving Credit Loans are authorized
to be used.

      1.2.3 Equipment Loans.  Lender agrees,  for so long as no Default or Event
of Default exists, to make Loans  ("Equipment  Loans") to Borrowers from time to
time, during the Original Term, to finance Borrowers' purchases of Equipment for
use in their  businesses.  Each  Equipment  Loan shall be in a principal  amount
mutually  agreed upon but not to exceed  ninety  percent  (90%) of the  Eligible
Equipment Cost, shall be secured by all of the Collateral and shall be evidenced
by and payable in accordance  with the Equipment  Note. The principal  amount of
Equipment  Loans  hereunder  shall not exceed,  in the aggregate,  $1,500,000.00
during any twelve  consecutive  months  during the  Original  Term and shall not
exceed in the aggregate $4,000,000.00 during the Original Term.

1.3   Letters of Credit; LC Guaranties.

      Lender agrees, for so long as no Default or Event of Default exists and if
requested  by  Borrowers,  to (i)  issue  its,  or  cause  to be  issued  by its
Affiliates,  standby  Letters of Credit  for the  account  of  Borrower  or (ii)
execute LC  Guaranties  by which  Lender or its  Affiliate  shall  guaranty  the
payment or performance by Borrower of its reimbursement obligations with respect
to standby Letters of Credit,  provided that the LC Amount at any time shall not
exceed $2,000,000.00.  No Letter of Credit or LC Guaranty may have an expiration
date  that is after  the last day of the  Original  Term or the then  applicable
Renewal Term.  Any amounts paid by Lender under any LC Guaranty or in connection
with any Letter of Credit shall be treated as Revolving  Credit Loans,  shall be
secured by all of the  Collateral  and shall bear interest and be payable at the
same rate and in the same manner as Revolving Credit Loans.

SECTION 2.    INTEREST, FEES AND CHARGES

2.1 Interest.
      2.1.1 Rates of Interest.  Interest  shall accrue on the Term Loans and the
Equipment  Loans in accordance  with the terms of the respective  Term Notes and
the  Equipment  Note.  Interest  shall  accrue  on the  principal  amount of the
Revolving Credit Loans  outstanding at the end of each day at a fluctuating rate
per annum equal to .25% plus the Prime Rate. The rate of interest shall increase
or  decrease by an amount  equal to any  increase or decrease in the Prime Rate,
effective  as of the  opening of business on the day that any such change in the
Prime Rate occurs.

      2.1.2 Default Rate of Interest.  Upon and after the occurrence of an Event
of Default,  and during the  continuation  thereof,  the principal amount of all
Loans shall bear  interest at a rate per annum equal to 2.0% above the  interest
rate otherwise applicable thereto (the "Default Rate").

      2.1.3 Maximum Interest.  In no event whatsoever shall the aggregate of all
amounts deemed interest  hereunder or under the Term Notes or the Equipment Note
and charged or collected  pursuant to the terms of this Agreement or pursuant to
the Term Notes or the Equipment Notes exceed the highest rate permissible  under
any law which a court of competent jurisdiction shall, in a final determination,
deem applicable  hereto. If any provisions of this Agreement,  the Term Notes or
the Equipment Note are in  contravention  of any such law, such provisions shall
be deemed amended to conform thereto.

      2.1.4 Adjustment to Interest Rate Margin.  The margin above the Prime Rate
with respect to the Revolving Credit Loans, Term Loans and Equipment Loans shall
be reduced by (a) .25%,  the first day after the month  following the receipt by
Lender of TMCI's  audited  financial  statements  from TMCI's fiscal year ending
December 31, 1998, prepared and delivered in accordance with subsection 8.1.3(i)
evidencing that the Cash Flow for TMCI for the fiscal year then ended,  exceeded
$750,000.00  (the "First  Adjustment  Date");  and (b) with  respect to the Term
Loans and Equipment  Loans only, by an additional  reduction of .25%,  the first
day of the month  following  the receipt by Lender of TMCI's  audited  financial
statements  for TMCI's fiscal  quarter  ending  December 31, 1999,  prepared and
delivered in accordance with subsection  8.1.3(i)  evidencing that the Cash Flow
for TMCI for the fiscal  year then ended  exceeded  $1,000,000.00  (the  "Second
Adjustment Date").

      2.1.5 LIBOR Rate Loans.  Following the  satisfaction  of the conditions to
the First Adjustment Date, the Borrowers may elect, in accordance with the terms
of this  Agreement,  (a) with respect to  Revolving  Credit  Loans,  or portions
thereof,  as provided  herein,  for such Loans to bear  interest  based upon the
LIBOR Rate, at a rate per annum equal to two and one-half  percent  (2.50%) plus
the LIBOR Rate for the  applicable  LIBOR Interest  Period,  (b) with respect to
Term Loan-A and the Equipment Loans or portions thereof, as provided herein, for
such Loans to bear  interest  based on the LIBOR Rate, at a rate per annum equal
to two and three-quarters percent (2.75%) plus the LIBOR Rate for the applicable
LIBOR Interest Period,  and(c) with respect to Term Loan-B or portions  thereof,
as provided herein, for such Loan to bear interest based upon the LIBOR Rate, at
a rate per annum  equal to three and  three-quarters  percent  (3.75%)  plus the
LIBOR Rate for the applicable LIBOR Interest Period.  Following the satisfaction
of the conditions to the Second Adjustment Date, the foregoing margins above the
LIBOR Rate will be reduced by one-quarter percent (.25%).

2.2   Computation of Interest and Fees.

      Interest,  Letter of Credit  and LC  Guaranty  fees and  unused  line fees
hereunder  shall be calculated  daily and shall be computed on the actual number
of days elapsed over a year of 360 days.  For the purpose of computing  interest
hereunder,  all items of payment  received by Lender shall be deemed  applied by
Lender on account of the  Obligations  (subject to final  payment of such items)
one (1) Business Day after  receipt by Lender of such items in Lender's  account
located in Fleet National Bank, Boston, Massachusetts.

2.3   Commitment Fee.

      Borrowers shall pay to Lender a commitment fee of $250,000.00, which shall
be paid  concurrently  with the initial Loan  hereunder.  Borrower has deposited
$100,000 with Lender which Lender shall  account for and after written  approval
thereof shall promptly remit balance after expenses to Borrower.

2.4 Letter of Credit and LC Guaranty Fees.

      Borrower  shall  pay to  Lender  for  standby  Letters  of  Credit  and LC
Guaranties of standby  Letters of Credit,  1.75% per annum of the aggregate face
amount of such Letters of Credit and LC Guaranties outstanding from time to time
during  the  term of this  Agreement,  plus all  normal  and  customary  charges
associated  with the issuance  thereof,  which fees and charges  shall be deemed
fully earned upon  issuance of each such Letter of Credit or LC Guaranty,  shall
be due and  payable  on the first  Business  Day of each  month and shall not be
subject to rebate or proration  upon the  termination  of this Agreement for any
reason.

2.5   Unused Line Fee.

      Borrower  shall pay to Lender a fee equal to .25% per annum of the average
monthly  amount  by which  the  total  Credit  Facility  exceeds  the sum of the
outstanding  principal  balance of the Revolving  Credit Loans,  Term Loans, and
Equipment Loans plus the LC Amount. The unused line fee shall be payable monthly
in arrears on the first day of each calendar month hereafter.

2.6   Reimbursement of Expenses.

      If, at any time or times  regardless of whether or not an Event of Default
then exists,  Lender incurs reasonable legal or accounting expenses or any other
costs or  out-of-pocket  expenses in  connection  with (i) the  negotiation  and
preparation of this Agreement or any of the other Loan Documents,  any amendment
of or modification  of this Agreement or any of the other Loan  Documents;  (ii)
the  administration of this Agreement or any of the other Loan Documents and the
transactions  contemplated  hereby and thereby;  (iii) audits and  appraisals of
Borrowers'  books  and  records  and of the  Collateral;  (iv)  any  litigation,
contest,  dispute,  suit,  proceeding or action  (whether  instituted by Lender,
Borrowers  or any other  Person) in any way  relating  to the  Collateral,  this
Agreement or any of the other Loan  Documents  or  Borrowers'  affairs;  (v) any
attempt to enforce any rights of Lender against any Borrower or any other Person
which may be obligated to Lender by virtue of this Agreement or any of the other
Loan Documents,  including, without limitation, the Account Debtors; or (vi) any
attempt to inspect, verify, protect, preserve, restore, collect, sell, liquidate
or otherwise dispose of or realize upon the Collateral;  then all such legal and
accounting  expenses,  other costs and out of pocket expenses of Lender shall be
charged to Borrowers. All amounts chargeable to Borrowers under this Section 2.6
shall be  Obligations  secured  by all of the  Collateral,  shall be  payable on
demand to Lender,  and shall  bear  interest  from the date such  demand is made
until paid in full at the rate applicable to Revolving Credit Loans from time to
time.  Borrowers shall also reimburse Lender for expenses  incurred by Lender in
its administration of the Collateral to the extent and in the manner provided in
Section 6 hereof.

2.7   Bank Charges.

      Borrowers  shall pay to  Lender,  on  demand,  any and all fees,  costs or
expenses  which Lender pays to a bank or other similar  institution  (including,
without  limitation,  any fees paid by Lender)  arising out of or in  connection
with (i) the  forwarding  to any  Borrower or any other  Person on behalf of any
Borrower,  by  Lender,  of  proceeds  of loans  made by Lender  to any  Borrower
pursuant to this Agreement and (ii) the depositing for collection, by Lender, of
any check or item of payment  received or  delivered to Lender on account of the
Obligations.

SECTION 3.    LOAN ADMINISTRATION.

3.1   Manner of Borrowing Revolving Credit Loans.
      Borrowings  under the credit  facility  established  pursuant to Section 1
hereof shall be as follows:

      3.1.1  Loan  Requests.  A request  for a  Revolving  Credit  Loan  bearing
interest  with  reference to the Prime Rate shall be made, or shall be deemed to
be made, in the following manner:  (i) Borrowers may give Lender notice of their
intention to borrow,  in which notice  Borrowers shall specify the amount of the
proposed  borrowing  and the proposed  borrowing  date, no later than 2:30 p.m.,
Hartford,  Connecticut time on the proposed borrowing date,  provided,  however,
that no such  request  may be made at a time when  there  exists a Default or an
Event of Default;  and (ii) the becoming  due of any amount  required to be paid
under  this  Agreement  or the Term  Notes or the  Equipment  Note,  whether  as
interest or for any other Obligation, including, without limitation, at any time
that LIBOR Loans may be available hereunder, upon the maturity of any LIBOR Loan
at the end of the applicable LIBOR Internal Period,  shall be deemed irrevocably
to be a  request  for a  Revolving  Credit  Loan on the due  date in the  amount
required  to pay such  interest  or other  Obligation.  As an  accommodation  to
Borrowers,  Lender  may  permit  telephonic  requests  for loans and  electronic
transmittal of instructions,  authorizations, agreements or reports to Lender by
Borrowers.  Unless Borrowers specifically direct Lender in writing not to accept
or act upon  telephonic or  electronic  communications  from a Borrower,  Lender
shall have no liability  to any Borrower for any loss or damage  suffered by any
Borrower as a result of  Lender's  honoring of any  requests,  execution  of any
instructions,   authorizations   or   agreements  or  reliance  on  any  reports
communicated to it telephonically or electronically  and purporting to have been
sent to Lender by a Borrower  and Lender shall have no duty to verify the origin
of any such  communication  or the  authority of the person  sending it. At such
time as LIBOR Loans may be  available  to  Borrowers  hereunder,  Borrowers  may
convert any Loan or portion thereof bearing interest with reference to the Prime
Rate to a LIBOR  Loan or  request a LIBOR  Loan by giving  Lender  not less than
three (3) Business Days prior irrevocable  written notice thereof specifying the
amount of such LIBOR Loan,  which shall not be less than $500,000 or an integral
multiple of $100,000 in excesses  thereof,  the date of the requested LIBOR Loan
(which shall be a Business Day) and the duration of the LIBOR Interest Period of
such LIBOR Loan, provided,  however,  that in no event shall the number of LIBOR
Loans  outstanding  at any time exceed five (5), and  provided,  further that no
such Loan  request may be made at a time when there exists a Default or an Event
of Default

      3.1.2  Disbursement.  Borrowers  hereby  irrevocably  authorize  Lender to
disburse the proceeds of each Revolving  Credit Loan requested,  or deemed to be
requested,  pursuant to this  subsection  3.1.2 as follows:  (i) the proceeds of
each  Revolving  Credit  Loan  requested  under  subsection  3.1.1(i)  shall  be
disbursed  by  Lender  in  lawful  money of the  United  States  of  America  in
immediately available funds, in the case of the initial borrowing, in accordance
with the terms of the written  disbursement  letter from  Borrowers,  and in the
case of each subsequent borrowing,  by wire transfer to such bank account as may
be  agreed  upon by  Borrowers  and  Lender  from time to time or  elsewhere  if
pursuant to a written  direction from  Borrowers;  and (ii) the proceeds of each
Revolving Credit Loan requested under subsection 3.1.1(ii) shall be disbursed by
Lender by way of direct payment of the relevant interest or other Obligation.

      3.1.3  Authorization.  Borrowers hereby  irrevocably  authorize Lender, in
Lender's sole discretion,  to advance to Borrowers,  and to charge to Borrowers'
Loan  Account(s)  hereunder as a Revolving  Credit Loan, a sum sufficient to pay
all interest accrued on the Obligations  during the immediately  preceding month
and to pay all costs,  fees and expenses at any time owed by Borrowers to Lender
hereunder.

3.2   Payments.

      Except  where  evidenced by notes or other  instruments  issued or made by
Borrowers to Lender  specifically  containing  payment  provisions  which are in
conflict  with this Section 3.2 (in which event the  conflicting  provisions  of
said notes or other instruments shall govern and control),  the Obligation shall
be payable as follows:

      3.2.1 Principal on Revolving Credit Loans. Principal payable on account of
Revolving Credit Loans shall be payable by Borrowers to Lender  immediately upon
the earliest of (i) the receipt by Lender or Borrowers of any proceeds of any of
the  Collateral  (other than proceeds that under the terms of this Agreement are
specifically to be applied to the Term Loans or Equipment  Loans), to the extent
of said  proceeds,  (ii) the occurrence of an Event of Default in consequence of
which Lender elects to accelerate  the maturity and payment of the  Obligations,
or (iii) termination of this Agreement  pursuant to Section 4 hereof;  provided,
however,  that if an Overadvance  shall exist at any time,  Borrowers  shall, on
demand, repay the Overadvance.

      3.2.2 Principal on Term Loans and Equipment  Loans.  Principal  payable on
the Term Loans and the Equipment  Loans shall be payable in accordance  with the
terms of the Notes  applicable  thereto  and shall in any  event be  payable  to
Lender  immediately  upon  the  earliest  of (i) the  occurrence  of an Event of
Default in  consequence  of which Lender elects to  accelerate  the maturity and
payment of the Obligations or (ii) termination of this Agreement.

      3.2.3 Interest. Interest accrued on the Loans shall be due on the earliest
of (i) the first  calendar  day of each  month  (for the  immediately  preceding
month),  computed through the last calendar day of the preceding month, (ii) the
occurrence  of an Event of  Default in  consequence  of which  Lender  elects to
accelerate the maturity and payment of the  Obligations or (iii)  termination of
this Agreement pursuant to Section 4 hereof.

      3.2.4 Costs, Fees and Charges. Costs, fees and charges payable pursuant to
this  Agreement  shall be payable by Borrowers as and when provided in Section 2
hereof, to Lender or to any other Person designated by Lender in writing.

      3.2.5 Other  Obligations.  The balance of the  Obligations  requiring  the
payment of money,  if any,  shall be payable by  Borrowers to Lender as and when
provided in this Agreement,  the Other Agreements or the Security Documents,  or
on demand, whichever is later.

3.3   Mandatory Prepayments.

      Except as provided in subsection  6.4.2 hereof,  if any Borrower sells any
of the  Equipment  or  real  Property,  or if any of the  Collateral  is lost or
destroyed  or taken by  condemnation,  Borrowers  shall  pay to  Lender,  unless
otherwise agreed by Lender, as and when received by Borrowers and as a mandatory
prepayment of the Term Loans or the Equipment  Loans,  in such order and to such
Loans, as determined by Lender, a sum equal to the proceeds (including insurance
payments)   received  by  Borrowers  from  such  sale,   loss,   destruction  or
condemnation.

3.4   Application of Payments and Collections.

      All  items  of  payment  received  by  Lender  by  2:30  p.m.,   Hartford,
Connecticut  time, on any Business Day shall be deemed received on that Business
Day. All items of payment received after 2:30 p.m., Hartford,  Connecticut time,
on any  Business Day shall be deemed  received on the  following  Business  Day.
Borrowers  irrevocably  waive the right to direct the application of any and all
payments and collections at any time or times hereafter  received by Lender from
or on behalf of Borrowers, and Borrowers do hereby irrevocably agree that Lender
shall have the continuing  exclusive right to apply and reapply any and all such
payments and  collections  received at any time or times  hereafter by Lender or
its agent against the Obligations,  in such manner as Lender may deem advisable,
notwithstanding any entry by Lender upon any of its books and records. If as the
result of  collections  of Accounts as authorized  by subsection  6.2.6 hereof a
credit balance exists in the Loan Account,  such credit balance shall not accrue
interest in favor of Borrowers,  but shall be available to Borrowers at any time
or times for so long as no  Default  or Event of  Default  exists.  Such  credit
balance  shall not be applied or be deemed to have been  applied as a prepayment
of the Term Loan or any Equipment  Loan,  except that Lender may, at its option,
offset such credit  balance  against any of the  Obligations  upon and after the
occurrence of an Event of Default.

3.5   All Loans to Constitute One Obligation.

      The Loans shall constitute one general Obligation of Borrowers,  and shall
be secured by Lender's Lien upon all of the Collateral.

3.6   Loan Accounts.

      Lender  shall enter all Loans as debits to the Loan  Account(s)  and shall
also  record  in  the  Loan  Account  all  payments  made  by  Borrowers  on any
Obligations and all proceeds of Collateral which are finally paid to Lender, and
may record therein,  in accordance  with customary  accounting  practice,  other
debits and credits,  including  interest  and all charges and expenses  properly
chargeable to Borrowers.

3.7   Statements of Account.

      Lender  will  account to  Borrowers  monthly  with a  statement  of Loans,
charges and payments made pursuant to this Agreement,  and such account rendered
by Lender shall be deemed final,  binding and conclusive  upon Borrowers  unless
Lender is notified by Borrowers in writing to the contrary within 30 days of the
date each accounting is mailed to Borrowers. Such notice shall only be deemed an
objection to those items specifically objected to therein.

3.8   Appointment of TMCI as Agent.

      Borrowers hereby irrevocably appoint and constitute TMCI as their agent to
request  Revolving  Credit  Loans and to take all actions  required or permitted
hereunder  in the  name of and on  behalf  of each and all the  Borrowers.  This
appointment shall include,  without implied limitation,  the designation of TMCI
as the agent of the  Borrowers  to furnish all notices to the Lender  including,
without  limitation,  any notice  under  subsection  4.2.2,  and to receive  all
notices from the Lender including,  without  limitation,  all statements of Loan
Account(s)  under this Agreement and the other Loan Documents.  This appointment
may not be terminated  while this Agreement is in effect or the  Obligations are
outstanding  without the prior written  consent of Lender.  Loans may be made by
Lender to TMCI for the benefit of the  Borrowers  and shall be disbursed by TMCI
to the other  Borrowers in accordance  with the lending  formulas  under Section
1.1, and the value of the Eligible Accounts, Eligible Inventory and Equipment of
each Borrower and the advance rates applicable  thereto as provided  herein.  At
any time Lender may, in its discretion, disburse Loans to the Borrowers directly
or as otherwise provided in this Agreement.

3.9   Funding Losses on LIBOR Loans.

      In the event that any LIBOR Loan is repaid or terminated for any reason on
a date prior to the expiration of the LIBOR Interest Period with respect thereto
or Borrowers  fail to borrow a LIBOR Loan when  requested  under Section  3.1.1,
then in addition to any other  amounts which are due and payable under the terms
of this  Agreement  (including,  but  not  limited  to,  Section  4.2.3  hereof)
Borrowers  shall pay to Lender,  upon Lender's demand  therefor,  such amount or
amounts as shall  compensate  Lender for any loss,  cost or expense  incurred by
Lender as a result of (i) any payment or prepayment (whether pursuant to Section
4.2 or otherwise) of a LIBOR Loan on a date other than the last day of the LIBOR
Interest period  applicable to such LIBOR Loan, or (ii) any failure by Borrowers
to pay or prepay a LIBOR Loan on the date  specified in the  relevant  notice of
prepayment delivered by Borrowers, or (iii) any failure by Borrowers to borrow a
LIBOR Loan on the date specified in the applicable notice delivered  pursuant to
Section 3.1.1. Such compensation shall include,  without  limitation,  an amount
equal to the  excess,  if any,  of (x) the amount of  interest  which would have
accrued  on the amount so paid or prepaid  or not  prepaid or  borrowed  for the
period from the date of such payment,  prepayment or failure to prepay or borrow
to the last day of the applicable LIBOR Interest Period for such LIBOR Loan (or,
in the case of a failure to prepay or borrow, the LIBOR Interest Period for such
LIBOR Loan which would have  commenced  on the date of such failure to prepay or
borrow) at the  applicable  rate of interest  for such LIBOR Loan,  over (y) the
amount of interest (as  reasonably  determined by Lender) that Lender would have
been paid on deposits in the United States  dollars of comparable  amounts for a
comparable  period of time by leading banks in the London  Interbank  Market.  A
certificate  as to the amounts due from Borrowers to Lender shall be conclusive,
absent manifest error.

3.10  Changes in Law and LIBOR Loans.

      Notwithstanding any other provision hereof, if any applicable law, treaty,
regulation  or  directive,  or any change  therein or in the  interpretation  or
application  thereof,  shall make it unlawful for Lender to make or maintain its
LIBOR Loans, or if with respect to any LIBOR Rate relating  thereto,  or adverse
or unusual  conditions in the applicable  London  Interbank Market or changes in
applicable law relating  thereto make it, in the reasonable  good faith judgment
of Lender,  impracticable  to fund LIBOR Loans or make the projected  LIBOR Rate
unreflective of the actual costs of funds therefor to Lender,  the obligation of
Lender to make  LIBOR  Loans  hereunder  shall  forthwith  be  canceled  and the
Borrowers shall, if any affected LIBOR Loans are then outstanding  promptly upon
request of Lender,  either pay all such  affected  LIBOR  Loans or convert  such
affected LIBOR Loans into Prime Rate Loans. If any such payment or conversion of
any LIBOR Loan is made on a day that is not the last day of the applicable LIBOR
Interest Period,  Borrowers shall pay Lender, upon Lender's request, such amount
or amounts as may be required pursuant to Section 3.9 hereof.


SECTION 4.    TERM AND TERMINATION

4.1 Term of Agreement.
      Subject to Lender's right to cease making Loans to Borrowers upon or after
the occurrence of any Default or Event of Default,  this  Agreement  shall be in
effect for a period of five years from the date  hereof,  through and  including
March 2, 2003 (the  "Original  Term"),  and this Agreement  shall  automatically
renew itself for one-year  periods  thereafter  (the  "Renewal  Terms"),  unless
terminated as provided in Section 4.2 hereof.

4.2   Termination.

      4.2.1 Termination by Lender. Upon at least 90 days prior written notice to
Borrowers,  Lender  may  terminate  this  Agreement  as of the  last  day of the
Original  Term or the then current  Renewal Term and Lender may  terminate  this
Agreement without notice upon or after the occurrence of an Event of Default.

      4.2.2 Termination by Borrower.  Upon at least 90 days prior written notice
to Lender, Borrowers may, at their option,  terminate this Agreement;  provided,
however, no such termination shall be effective until Borrowers have paid all of
the Obligations in immediately  available funds and all Letters of Credit and LC
Guaranties   have  expired  or  have  been  cash   collateralized   to  Lender's
satisfaction.  Any notice of termination given by Borrowers shall be irrevocable
unless Lender otherwise  agrees in writing,  and Lender shall have no obligation
to make any Loans or issue or procure any Letters of Credit or LC  Guaranties on
or after the  termination  date stated in such  notice.  Borrowers  may elect to
terminate  this  Agreement in its entirety only. No section of this Agreement or
type of Loan or credit facility available hereunder may be terminated singly.

      4.2.3  Termination  Charges.  At the effective date of termination of this
Agreement for any reason, Borrowers shall pay to Lender (in addition to the then
outstanding principal,  accrued interest and other charges owing under the terms
of this Agreement and any of the other Loan Documents) as liquidated damages for
the loss of the  bargain  and not as a penalty as a result of the  agreement  by
Lender to defer payment of fees that would otherwise be charged at the inception
of this  Agreement,  an  amount  equal  to 2% of the  Average  Loan  Balance  if
termination  occurs  during the first  twelve-month  period of the Original Term
(March 2, 1998  through  March 1,  1999);  1% of the  Average  Loan  Balance  if
termination occurs during the second 12-month period of the Original Term (March
2, 1999) through March 1, 2000);  1% of the Average Loan Balance if  termination
occurs  during the third 12 month  period of the  Original  Term  (March 2, 2000
through  March 1, 2001).  If  termination  occurs on or after March 2, 2001,  no
termination charge shall be payable.

      4.2.4 Effect of Termination.  All of the Obligations  shall be immediately
due and payable upon the termination date stated in any notice of termination of
this  Agreement.  All  undertakings,   agreements,   covenants,  warranties  and
representations  of Borrowers  contained in the Loan Documents shall survive any
such  termination and Lender shall retain its Liens in the Collateral and all of
its  rights  and  remedies  under  the  Loan  Documents   notwithstanding   such
termination  until  Borrowers have paid the  Obligations to Lender,  in full, in
immediately available funds, together with the applicable termination charge, if
any. Notwithstanding the payment in full of the Obligations, Lender shall not be
required to terminate  its security  interests in the  Collateral  unless,  with
respect to any loss or damage Lender may incur as a result of dishonored  checks
or other  items of payment  received  by Lender  from  Borrowers  or any Account
Debtor and applied to the  Obligations,  Lender shall,  at its option,  (i) have
received a written  agreement,  executed by  Borrowers  and by any Person  whose
loans or other advances to Borrowers are used in whole or in part to satisfy the
Obligations,  indemnifying  Lender  from any such loss or  damage;  or (ii) have
retained  such monetary  reserves and Liens on such  monetary  reserves for such
period of time as Lender,  in its reasonable  discretion,  may deem necessary to
protect Lender from any such loss or damage.

SECTION 5.    SECURITY INTERESTS

5.1   Security Interest in Collateral.
      To  secure  the  prompt  payment  and  performance  to such  Lender of the
Obligations, each Borrower hereby grants to Lender a continuing Lien upon all of
such Borrower's assets, including all of the following Property and interests in
Property of such Borrower,  whether now owned or existing or hereafter  created,
acquired or arising and wheresoever located:

            (i)         Accounts;

            (ii)        Inventory;

            (iii)       Equipment;

            (iv)        General Intangibles;

            (v)         Investment Property;

            (vi) All monies and other Property of any kind now or at any time or
      times  hereafter  in the  possession  or under the  control of Lender or a
      bailee or Affiliate of Lender;

            (vii) All accessions  to,  substitutions  for and all  replacements,
      products  and  cash and  non-cash  proceeds  of (i)  through  (vi)  above,
      including,  without  limitation,  proceeds of and unearned  premiums  with
      respect to insurance policies insuring any of the Collateral; and

            (viii)  All  books  and  records  (including,   without  limitation,
      customer lists,  credit files,  computer programs,  print-outs,  and other
      computer  materials  and  records)  of Borrower  pertaining  to any of (i)
      through (vii) above.

5.2   Lien Perfection; Further Assurances.

      Borrowers shall execute such UCC-1 financing statements as are required by
the Code 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, each Borrower
hereby  authorizes  Lender to execute and file any such  financing  statement on
such Borrower's behalf.  The parties agree that a carbon,  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.  At Lender's  request,
Borrowers shall also promptly  execute or cause to be executed and shall deliver
to Lender any and all documents,  instruments and agreements deemed necessary by
Lender to give effect to or carry out the terms or intent of the Loan Documents.

SECTION 6.    COLLATERAL ADMINISTRATION

6.1 General.
      6.1.1  Location of  Collateral.  All  Collateral,  other than Inventory in
transit and motor  vehicles,  will at all times be kept by  Borrowers  and their
Subsidiaries  at one or more of the  business  locations  set forth in Exhibit B
hereto and shall not,  without the prior  written  approval of Lender,  be moved
therefrom except, prior to an Event of Default and Lender's  acceleration of the
maturity of the Obligations in consequence  thereof,  for (i) sales of Inventory
in the  ordinary  course of  business;  and (ii)  removals  in  connection  with
dispositions of Equipment that are authorized by subsection 6.4.2 hereof.

      6.1.2  Insurance  of  Collateral.  Borrowers  shall  maintain  and pay for
insurance  upon all Collateral  wherever  located and with respect to Borrowers'
business,  covering casualty,  hazard,  public liability and such other risks in
such amounts and with such insurance companies as are reasonably satisfactory to
Lender.  Borrowers  shall  deliver the originals of such policies to Lender with
satisfactory  lender's  loss payable  endorsements,  naming  Lender as sole loss
payee, assignee or additional insured, as appropriate.  Each policy of insurance
or  endorsement  shall  contain a clause  requiring the insurer to give not less
than 30 days prior written notice to Lender in the event of  cancellation of the
policy for any reason  whatsoever and a clause  specifying  that the interest of
Lender  shall  not be  impaired  or  invalidated  by any act or  neglect  of any
Borrower or the owner of the Property or by the  occupation  of the premises for
purposes more hazardous than are permitted by said policy.  If Borrowers fail to
provide and pay for such insurance,  Lender may, at its option, but shall not be
required to, procure the same and charge Borrowers therefor.  Borrowers agree to
deliver to Lender,  promptly as rendered, true copies of all reports made in any
reporting forms to insurance companies.

      6.1.3  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  Borrowers.  If Borrowers  fail to promptly pay any portion
thereof when due,  Lender may, at its option,  but shall not be required to, pay
the  same  and  charge  Borrowers  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
Borrowers' sole risk.

6.2   Administration of Accounts.

      6.2.1 Records, Schedules and Assignments of Accounts. Borrowers shall keep
accurate and complete records of their Accounts and all payments and collections
thereon  and  shall  submit to Lender  on such  periodic  basis as Lender  shall
request  a sales  and  collections  report  for the  preceding  period,  in form
satisfactory  to Lender.  On or before the  fifteenth day of each month from and
after the date hereof,  Borrowers shall deliver to Lender, in form acceptable to
Lender,  a detailed aged trial  balance of all Accounts  existing as of the last
day of the preceding month, specifying the names,  addresses,  face value, dates
of invoices  and due dates for each  Account  Debtor  obligated on an Account so
listed ("Schedule of Accounts"),  and, upon Lender's request therefor, copies of
proof of delivery and the original  copy of all  documents,  including,  without
limitation,  repayment  histories  and present  status  reports  relating to the
Accounts so scheduled  and such other  matters and  information  relating to the
status  of then  existing  Accounts  as  Lender  shall  reasonably  request.  In
addition,  if Accounts in an aggregate  face amount in excess of $25,000  become
ineligible  because  they  fall  within  one  of  the  specified  categories  of
ineligibility  set forth in the  definition  of Eligible  Accounts or  otherwise
established by Lender,  Borrowers  shall notify Lender of such occurrence on the
first  Business Day  following  such  occurrence  and the  Borrowing  Base shall
thereupon  be adjusted  to reflect  such  occurrence.  If  requested  by Lender,
Borrowers shall execute and deliver to Lender formal written  assignments of all
of their  Accounts  weekly or daily,  which shall include all Accounts that have
been  created  since the date of the last  assignment,  together  with copies of
invoices or invoice registers related thereto.

      6.2.2 Discounts,  Allowances,  Disputes. If Borrowers grant any discounts,
allowances  or  credits  that are not shown on the face of the  invoice  for the
Account involved, Borrowers shall report such discounts,  allowances or credits,
as the case may be, to Lender as part of the next required Schedule of Accounts.
If any  amounts  due and owing in excess of $25,000  are in dispute  between any
Borrower and any Account  Debtor,  Borrowers  shall provide  Lender with written
notice  thereof at the time of  submission  of the next  Schedule  of  Accounts,
explaining in detail the reason for the dispute,  all claims related thereto and
the amount in controversy. Upon and after the occurrence of an Event of Default,
Lender shall have the right to settle or adjust all disputes and claims directly
with the  Account  Debtor  and to  compromise  the amount or extend the time for
payment  of the  Accounts  upon such  terms and  conditions  as Lender  may deem
advisable, and to charge the deficiencies, costs and expenses thereof, including
attorney's fees, to Borrowers.

      6.2.3  Taxes.  If an Account  includes a charge for any tax payable to any
governmental taxing authority,  Lender is authorized, in its sole discretion, to
pay the  amount  thereof  to the  proper  taxing  authority  for the  account of
Borrowers and to charge Borrowers therefor,  provided, however that Lender shall
not be liable for any taxes to any governmental taxing authority that may be due
by Borrowers.

      6.2.4  Account  Verification.  Whether  or not a  Default  or an  Event of
Default has occurred,  any of Lender's officers,  employees or agents shall have
the right, at any time or times hereafter,  in the name of Lender,  any designee
of Lender or any Borrower,  to verify the  validity,  amount or any other matter
relating to any Accounts by mail, telephone,  telegraph or otherwise.  Borrowers
shall  cooperate  fully  with  Lender in an effort to  facilitate  and  promptly
conclude any such verification process.

      6.2.5 Maintenance of Dominion  Account.  Borrowers shall maintain Dominion
Accounts pursuant to lockbox  arrangements  acceptable to Lender with such banks
as may be selected by Borrowers  and be acceptable  to Lender.  Borrowers  shall
issue to any such banks an  irrevocable  letter of  instruction  directing  such
banks to deposit all  payments or other  remittances  received in the lockbox to
the Dominion Account(s) for application on account of the Obligations. All funds
deposited  in any  Dominion  Account  shall  immediately  become the property of
Lender and Borrowers shall obtain the agreement by such banks in favor of Lender
to waive any offset  rights  against the funds so deposited.  Lender  assumes no
responsibility for such lockbox arrangements, including, without limitation, any
claim of accord and satisfaction or release with respect to deposits accepted by
any bank thereunder.

      6.2.6  Collection  of  Accounts,   Proceeds  of  Collateral.  To  expedite
collection, Borrowers shall endeavor in the first instance to make collection of
their Accounts for Lender.  All remittances  received by Borrowers on account of
Accounts,  together with the proceeds of any other Collateral,  shall be held as
Lender's  property  by  Borrowers  as trustee of an express  trust for  Lender's
benefit and  Borrowers  shall  immediately  deposit same in kind in the Dominion
Account(s).  Lender  retains  the right at all times after the  occurrence  of a
Default or an Event of Default to notify Account Debtors that Accounts have been
assigned  to Lender  and to  collect  Accounts  directly  in its own name and to
charge the collection costs and expenses,  including reasonable  attorneys' fees
to Borrowers.

6.3   Administration of Inventory.

      6.3.1 Records and Reports of Inventory.  Borrowers shall keep accurate and
complete records of their inventory. Borrowers shall furnish to Lender Inventory
reports  in form and detail  satisfactory  to Lender at such times as Lender may
request,  but at least once each month, not later than the twentieth day of such
month.  Borrowers  shall conduct a physical  inventory no less  frequently  than
annually  and  shall  provide  to Lender a report  based on each  such  physical
inventory  promptly  thereafter,  together with such  supporting  information as
Lender shall request.

      6.3.2 Returns of Inventory.  If at any time or times hereafter any Account
Debtor  returns any  Inventory to a Borrower the shipment of which  generated an
Account on which such Account Debtor is obligated in excess of $25,000 Borrowers
shall  immediately  notify  Lender of the same,  specifying  the reason for such
return and the  location,  condition  and intended  disposition  of the returned
Inventory.

6.4   Administration of Equipment.

      6.4.1 Records and Schedules of  Equipment.  Borrowers  shall keep accurate
records itemizing and describing the kind, type, quality,  quantity and value of
their Equipment and all  dispositions  made in accordance with subsection  6.6.2
hereof,  and  shall  furnish  Lender  with a  current  schedule  containing  the
foregoing information on at least an annual basis and more often if requested by
Lender.  Immediately on request  therefor by Lender,  Borrowers shall deliver to
Lender any and all evidence of ownership, if any, of any of the Equipment.

      6.4.2  Dispositions  of  Equipment.  Borrowers  will  not  sell,  lease or
otherwise  dispose  of or  transfer  any of the  Equipment  or any part  thereof
without  the prior  written  consent  of  Lender;  provided,  however,  that the
foregoing  restriction  shall not  apply,  for so long as no Default or Event of
Default exists,  to (i) dispositions of Equipment which, in the aggregate during
any  consecutive  twelve-month  period,  has a fair market  value or book value,
whichever is less, of $100,000 or less,  provided that all proceeds  thereof are
remitted  to Lender  for  application  to the  Loans,  or (ii)  replacements  of
Equipment that is substantially worn, damaged or obsolete with Equipment of like
kind,  function and value,  provided  that the  replacement  Equipment  shall be
acquired prior to or concurrently  with any disposition of the Equipment that is
to be replaced, the replacement Equipment shall be free and clear of Liens other
than Permitted Liens that are not Purchase Money Liens, and Borrowers shall have
given Lender at least 5 Business Days prior written notice of such disposition.

6.5   Payment of Charges.

      All  amounts  chargeable  to  Borrowers  under  Section 6 hereof  shall be
Obligations  secured  by all of the  Collateral,  shall be payable on demand and
shall bear  interest  from the date such  advance was made until paid in full at
the rate applicable to Revolving Credit Loans from time to time.

SECTION 7.    REPRESENTATIONS AND WARRANTIES

7.1   General Representations and Warranties.
      To  induce  Lender  to enter  into  this  Agreement  and to make  advances
hereunder, each Borrower warrants, represents and covenants to Lender that:

      7.1.1 Organization and  Qualification.  Each Borrower and its Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws  of  the  jurisdiction  of  its   incorporation.   Each  Borrower  and  its
Subsidiaries  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
Exhibit C hereto and in all other states and  jurisdictions in which the failure
of a  Borrower  or any of  its  Subsidiaries  to be so  qualified  would  have a
material  adverse effect on the financial  condition,  business or Properties of
such Borrower or any of its Subsidiaries.

      7.1.2 Corporate Power and Authority. Each Borrower and its Subsidiaries is
duly authorized and empowered to enter into,  execute,  deliver and perform this
Agreement  and each of the  other  Loan  Documents  to which it is a party.  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  of any
Borrower or any of their Subsidiaries;  (ii) contravene any Borrower's or any of
their  Subsidiaries'  charter,  articles  or  certificate  of  incorporation  or
by-laws; (iii) violate, or cause any Borrower or any of their Subsidiaries to be
in default  under,  any provision of any law,  rule,  regulation,  order,  writ,
judgment,   injunction,   decree,   determination  or  award  in  effect  having
applicability  to any  Borrower or any of their  Subsidiaries;  (iv) 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 any Borrower or
any of their  Subsidiaries  is a party or by which any  Borrower or any of their
Subsidiaries or their Properties may be bound or affected;  or (v) result in, or
require,  the creation or  imposition of any Lien (other than  Permitted  Liens)
upon or with respect to any of the Properties now owned or hereafter acquired by
any Borrower or any of their Subsidiaries.

      7.1.3 Legally  Enforceable  Agreement.  This Agreement is, and each of the
other Loan Documents when delivered under this Agreement will be, a legal, valid
and binding  obligation  of each  Borrower  and their  Subsidiaries  enforceable
against each of them in accordance with its respective terms.

      7.1.4 Capital  Structure.  Exhibit D hereto states (i) the correct name of
each of the Subsidiaries of each Borrower,  their jurisdictions of incorporation
and the  percentage  of Voting Stock owned by  Borrowers,  (ii) the name of each
Borrower's  corporate  or  joint  venture  Affiliates  and  the  nature  of  the
affiliation, (iii) the number, nature and holder of five percent (5%) or more of
any class,  series or type of  outstanding  Securities of each Borrower and each
Subsidiary  of any  Borrower  and (iv) the  number  of  authorized,  issued  and
treasury  shares of each  Borrower and each  Subsidiary  of any  Borrower.  Each
Borrower  has good title to all of the shares it purports to own of the stock of
each of its  Subsidiaries,  free and clear in each case of any Lien  other  than
Permitted  Liens.  All such  shares have been duly issued and are fully paid and
non-assessable.  There are no outstanding options to purchase,  or any rights or
warrants to subscribe for, or any commitments or agreements to issue or sell, or
any  Securities  or  obligations  convertible  into,  or any powers of  attorney
relating  to,  shares  of  the  capital  stock  of  any  Borrower  or any of its
Subsidiaries.  There are no outstanding  agreements or instruments  binding upon
any Borrower's  shareholders  relating to the ownership of its shares of capital
stock, except as disclosed in Exhibit R hereto.

      7.1.5 Corporate  Names. No Borrower nor any of its  Subsidiaries  has been
known as or used any corporate, fictitious or trade names except those listed on
Exhibit E hereto.  Except as set forth on Exhibit E, no Borrower  nor any of its
Subsidiaries has been the surviving  corporation of a merger or consolidation or
acquired all or substantially all of the assets of any Person.

      7.1.6  Business  Locations;  Agent for Process.  Each  Borrower's  and its
Subsidiaries'  chief executive office and other places of business are as listed
on Exhibit B hereto.  During the preceding  one-year period, no Borrower nor any
of its Subsidiaries has had an office, place of business or agent for service of
process  other  than as listed on  Exhibit  B.  Except as shown on Exhibit B, no
inventory is stored with a bailee,  warehouseman  or similar  party,  nor is any
Inventory consigned to any Person.

      7.1.7  Title to  Properties;  Priority  of Liens.  Each  Borrower  and its
Subsidiaries  has good,  indefeasible  and  marketable  title to and fee  simple
ownership of, or valid and  subsisting  leasehold  interests in, all of its real
Property, and good title to all of the Collateral and all of its other Property,
in each case, free and clear of all Liens except Permitted Liens.  Each Borrower
has paid or discharged all lawful claims which,  if unpaid,  might become a Lien
against  any  Borrower's  Properties  that is not a  Permitted  Lien.  The Liens
granted to Lender under Section 5 hereof are first priority Liens,  subject only
to Permitted Liens.

      7.1.8  Accounts.  Lender  may rely,  in  determining  which  Accounts  are
Eligible Accounts,  on all statements and representations made by Borrowers with
respect to any Account or  Accounts.  Unless  otherwise  indicated in writing to
Lender, with respect to each Account:

            (i)         It is genuine and in all respects  what it purports to
      be, and it is not evidenced by a judgment;

            (ii) It arises out of a  completed,  bona fide sale and  delivery of
      goods or rendition of services by a Borrower in the ordinary course of its
      business and in accordance  with the terms and  conditions of all purchase
      orders,  contracts or other documents  relating thereto and forming a part
      of the contract between such Borrower and the Account Debtor;

            (iii)  It is for a  liquidated  amount  maturing  as  stated  in the
      duplicate  invoice covering such sale or rendition of services,  a copy of
      which has been furnished or is available to Lender;

            (iv) Such Account,  and Lender's security interest therein,  is not,
      and  will not (by  voluntary  act or  omission  of a  Borrower)  be in the
      future,  subject  to  any  offset,  Lien,  deduction,   defense,  dispute,
      counterclaim or any other adverse condition except for disputes  resulting
      in returned  goods where the amount in  controversy is deemed by Lender to
      be immaterial, and each such Account is absolutely owing to a Borrower and
      is not contingent in any respect or for any reason;

            (v) No  Borrower  has  made an  agreement  with any  Account  Debtor
      thereunder for any extension,  compromise,  settlement or  modification of
      any  such  Account  or  any  deduction  therefrom,   except  discounts  or
      allowances  which are granted by Borrowers in the ordinary course of their
      businesses for prompt  payment and which are reflected in the  calculation
      of the net  amount of each  respective  invoice  related  thereto  and are
      reflected  in the  Schedules of Accounts  submitted to Lender  pursuant to
      subsection 6.2.1 hereof;

            (vi)  There are no facts,  events  or  occurrences  which in any way
      impair the  validity or  enforceability  of any Accounts or tend to reduce
      the amount  payable  thereunder  from the face  amount of the  invoice and
      statements delivered to Lender with respect thereto;

            (vii)  To the  best of  Borrowers'  knowledge,  the  Account  Debtor
      thereunder  (1) had the  capacity to contract at the time any  contract or
      other  document  giving  rise to the  Account  was  executed  and (2) such
      Account Debtor is Solvent; and

            (viii) To the best of Borrowers' knowledge, there are no proceedings
      or actions  which are  threatened  or pending  against any Account  Debtor
      thereunder  which  might  result in any  material  adverse  change in such
      Account  Debtor's  financial  condition  or  the  collectibility  of  such
      Account.

      7.1.9 Equipment.  The Equipment is in good operating condition and repair,
and all necessary  replacements of and repairs thereto shall be made so that the
value  and  operating  efficiency  of the  Equipment  shall  be  maintained  and
preserved,  reasonable wear and tear excepted.  Borrowers will not permit any of
the Equipment to become  affixed to any real Property  leased to any Borrower so
that an interest  arises  therein  under the real estate laws of the  applicable
jurisdiction  unless the landlord of such real  Property has executed a landlord
waiver or leasehold  mortgage in favor of and in form acceptable to Lender,  and
Borrowers  will not permit any of the  Equipment  to become an  accession to any
personal Property other than Equipment that is subject to first priority (except
for Permitted Liens) Liens in favor of Lender.

      7.1.10   Financial   Statements;   Fiscal  Year.  The   Consolidated   and
consolidating  balance sheets of TMCI and such other Persons  described  therein
(including the accounts of all  Subsidiaries of TMCI for the respective  periods
during which a Subsidiary  relationship  existed) as of September 30, 1997,  and
the related statements of income,  changes in stockholder's  equity, and changes
in financial position for the periods ended on such dates, have been prepared in
accordance  with GAAP,  and present  fairly the financial  positions of TMCI and
such  persons  at such dates and the  results  of TMCI's  and its  Subsidiaries'
operations  for such  periods.  Since  September  30,  1997,  there  has been no
material change in the condition, financial or otherwise, of TMCI and such other
Persons as shown on the Consolidated balance sheet as of such date and no change
in the aggregate value of Equipment and real Property owned by Borrowers, except
changes in the ordinary course of business, none of which individually or in the
aggregate has been materially  adverse.  The fiscal year of TMCI and each of its
Subsidiaries ends on December 31st of each year.

      7.1.11 Full Disclosure. The financial statements referred to in subsection
7.1.10 hereof do not, nor does this Agreement or any other written  statement of
Borrowers to Lender,  contain any untrue  statement of a material fact or omit a
material fact necessary to make the statements  contained  therein or herein not
misleading.  There is no fact which  Borrowers have failed to disclose to Lender
in writing which materially affects adversely or, so far as any Borrower can now
foresee, will materially affect adversely the Properties,  business,  prospects,
profits or condition  (financial  or  otherwise) of any Borrower or any of their
Subsidiaries  or the ability of any  Borrower or their  Subsidiaries  to perform
this Agreement or the other Loan Documents.

      7.1.12 Solvent Financial Condition.  Each Borrower and its Subsidiaries is
now and,  after giving  effect to the Loans to be made and the Letters of Credit
and LC Guaranties to be issued hereunder, at all times will be, Solvent.

      7.1.13 Surety  Obligations.  No Borrower nor any of their  Subsidiaries is
obligated  as surety or  indemnitor  under any surety or  similar  bond or other
contract issued or entered into any agreement to assure payment,  performance or
completion of performance of any undertaking or obligation of any Person.

      7.1.14 Taxes. Each Borrower's federal tax  identification  number is shown
on  Exhibit  F.  The  federal  tax  identification  number  of  each  Borrower's
Subsidiaries  is  shown on  Exhibit  F  hereto.  Each  Borrower  and each of its
Subsidiaries  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 and  Properties as and when such taxes,  assessments,  fees,
levies  and  charges  that are due and  payable,  unless  and to the  extent any
thereof  are  being  actively   contested  in  good  faith  and  by  appropriate
proceedings and Borrowers maintains reasonable reserves on their books therefor.
The  provision for taxes on the books of Borrowers  and their  Subsidiaries  are
adequate for all years not closed by  applicable  statutes,  and for its current
fiscal year.

      7.1.15 Brokers.  There are no claims for brokerage  commissions,  finder's
fees or investment banking fees in connection with the transactions contemplated
by this Agreement except as disclosed on Exhibit Q hereto.

      7.1.16 Patents, Trademarks, Copyrights and Licenses. Each Borrower and its
Subsidiaries owns or possesses all the patents, trademarks, service marks, trade
names,  copyrights  and licenses  necessary  for the present and planned  future
conduct of its business  without any known  conflict  with the rights of others.
All such patents, trademarks,  service marks, tradenames,  copyrights,  licenses
and other similar rights are listed on Exhibit G hereto.

      7.1.17 Governmental Consents.  Each Borrower and its Subsidiaries has, and
is in good  standing  with  respect to, all  governmental  consents,  approvals,
licenses,  authorizations,  permits,  certificates,  inspections  and franchises
necessary  to continue to conduct its business as  heretofore  or proposed to be
conducted by it and to own or lease and operate its  Properties  as now owned or
leased by it.

      7.1.18  Compliance with Laws. Each Borrower and its  Subsidiaries has duly
complied with,  and its  Properties,  business  operations and leaseholds are in
compliance in all material  respects with, the provisions of all federal,  state
and local laws,  rules and regulations  applicable to any Borrower or their such
Subsidiary,  as  applicable,  its  Properties or the conduct of its business and
there have been no citations,  notices or orders of noncompliance  issued to any
Borrower or any of their  Subsidiaries  under any such law, rule or  regulation.
Each Borrower and its  Subsidiaries  has  established  and maintains an adequate
monitoring  system to insure  that it remains in  compliance  with all  federal,
state and local laws,  rules and regulations  applicable to it. No Inventory has
been produced in violation of the Fair Labor Standards Act (29 U.S.C. ss. 201 et
seq.), as amended.
      7.1.19 Restrictions. No Borrower nor any of its Subsidiaries is a party or
subject to any contract,  agreement,  or charter or other corporate restriction,
which  materially and adversely  affects its business or the use or ownership of
any of its  Properties.  No Borrower nor any of its  Subsidiaries  is a party or
subject to any contract or  agreement  which  restricts  its right or ability to
incur  Indebtedness,  other than as set forth on Exhibit H hereto, none of which
prohibit the  execution of or compliance  with this  Agreement or the other Loan
Documents by any Borrower or any of their Subsidiaries, as applicable.

      7.1.20 Litigation.  Except as set forth on Exhibit I hereto,  there are no
actions,  suits,  proceedings or investigations  pending, or to the knowledge of
any  Borrower,  threatened,  against or  affecting  any Borrower or any of their
Subsidiaries,  or the business,  operations,  Properties,  prospects, profits or
condition of any Borrower or any of their  Subsidiaries.  No Borrower nor any of
their  Subsidiaries is in default with respect to any order,  writ,  injunction,
judgment,  decree or rule of any court,  governmental  authority or  arbitration
board or tribunal.

      7.1.21 No Defaults.  No event has  occurred and no condition  exists which
would,  upon or after the execution and delivery of this Agreement or Borrowers'
performance hereunder,  constitute a Default or an Event of Default. No Borrower
nor any of their  Subsidiaries  is in default,  and no event has occurred and no
condition  exists  which  constitutes,  or which with the passage of time or the
giving of notice or both  would  constitute,  a default  in the  payment  of any
Indebtedness to any Person for Money Borrowed.

      7.1.22 Leases.  Exhibit J hereto is a complete  listing of all capitalized
leases of Borrowers  and their  Subsidiaries  and Exhibit K hereto is a complete
listing  of all  operating  leases of  Borrowers  and their  Subsidiaries.  Each
Borrower and its  Subsidiaries  is in full  compliance  with all of the terms of
each of its respective capitalized and operating leases.

      7.1.23 Pension Plans. Except as disclosed on Exhibit L hereto, no Borrower
nor any of their  Subsidiaries  has any Plan.  Each  Borrower  and each of their
Subsidiaries  is in full  compliance  with the  requirements  of  ERISA  and the
regulations  promulgated  thereunder  with  respect  to  each  Plan.  No fact or
situation  that  could  result in a  material  adverse  change in the  financial
condition of any Borrower or any of their Subsidiaries exists in connection with
any Plan. No Borrower nor any of their Subsidiaries has any withdrawal liability
in connection with a Multi-employer Plan.

      7.1.24 Trade Relations.  There exists no actual or threatened termination,
cancellation  or limitation of, or any  modification  or change in, the business
relationship between any Borrower or any of its Subsidiaries and any customer or
any group of customers  whose  purchases  individually  or in the  aggregate are
material to the business of Borrowers or any of their Subsidiaries,  or with any
material  supplier,  and there exists no present  condition or state of facts or
circumstances which would materially affect adversely any Borrower or any of its
Subsidiaries or prevent any Borrower or any of its Subsidiaries  from conducting
such business after the  consummation  of the  transaction  contemplated by this
Agreement  in  substantially  the same  manner in which it has  heretofore  been
conducted.

      7.1.25  Labor  Relations.  Except as  described  on  Exhibit M hereto,  no
Borrower nor any of its  Subsidiaries  is a party to any  collective  bargaining
agreement. There are no material grievances,  disputes or controversies with any
union or any other  organization  of any Borrower's or any of its  Subsidiaries'
employees, or threats of strikes, work stoppages or any asserted pending demands
for collective bargaining by any union or organization.

      7.1.26   Environmental   Matters.   Each  Borrower  and  their  respective
Subsidiaries  has obtained and is in compliance  with all permits,  licenses and
other  authorizations  required  under  all  Environmental  Laws to carry on its
business as now being  conducted,  except to the extent failure to have any such
permit,  license or  authorization  would not  reasonably  be  expected  (either
individually  or in the  aggregate)  to have a  material  adverse  effect on the
Borrowers  and  their   Subsidiaries.   Each   Borrower  and  their   respective
Subsidiaries  is also in compliance  with all other  limitations,  restrictions,
conditions, standards,  prohibitions,  requirements,  obligations, schedules and
timetables  contained in any applicable  Environmental Law or in any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter issued,
entered,  promulgated  or  approved  thereunder,  except to the  extent any such
non-compliance  would not reasonably be expected (either  individually or in the
aggregate)  to  have a  material  adverse  effect  on  the  Borrowers  or  their
Subsidiaries.

      7.1.27  Interdependent  Businesses and  Operations.  Each of the Borrowers
acknowledges and agrees that it acts  interdependently  with the other Borrowers
as part of an integrated group of businesses, relies upon the other Borrowers in
its  operations  and  business  and will  derive  direct and  indirect  economic
benefits  from the Loans,  Letters of Credit  and LC  Guaranties  to be made and
issued  hereunder by Lender.  The  consolidation  of the borrowings by Borrowers
under this Agreement  will utilize the combined  financial  capabilities  of the
Borrowers in the most efficient and economical manner and enhances the aggregate
borrowing  power of the  Borrowers  to the mutual  benefit and  advantage of the
Borrowers.

      7.1.28      Acquisitions.  No  default  has  occurred  under  any of the
Purchase Documents.

7.2   Continuous Nature of Representations and Warranties.

      Each representation and warranty contained in this Agreement and the other
Loan Documents shall be continuous in nature and shall remain accurate, complete
and not  misleading at all times during the term of this  Agreement,  except for
changes  in the  nature  of any  Borrower's  or its  Subsidiaries'  business  or
operations  that would render the  information  in any exhibit  attached  hereto
either inaccurate,  incomplete or misleading, so long as Lender has consented to
such changes or such changes are expressly permitted by this Agreement.

7.3   Survival of Representations and Warranties.

      All   representations  and  warranties  of  Borrowers  contained  in  this
Agreement  or any of the other  Loan  Documents  shall  survive  the  execution,
delivery  and  acceptance  thereof by Lender  and the  parties  thereto  and the
closing of the transactions described therein or related thereto.

SECTION 8.    COVENANTS AND CONTINUING AGREEMENTS

8.1   Affirmative Covenants.
      During the term of this Agreement, and thereafter for so long as there are
any  Obligations  to Lender,  each Borrower  covenants  that,  unless  otherwise
consented to by Lender in writing, it shall:

      8.1.1 Visits and Inspections.  Permit representatives of Lender, from time
to time,  as often  as may be  reasonably  requested,  but  only  during  normal
business  hours,  to visit and inspect the  Properties  of Borrowers and each of
their Subsidiaries, inspect, audit and make extracts from its books and records,
and discuss with its officers,  its employees and its  independent  accountants,
Borrowers'  and  each of  their  Subsidiaries'  business,  assets,  liabilities,
financial condition, business prospects and results of operations.

      8.1.2 Notices.  Promptly notify Lender in writing of the occurrence of any
event or the existence of any fact which renders any  representation or warranty
in this Agreement or any of the other Loan Documents  inaccurate,  incomplete or
misleading.  Notify Lender ten (10) days in advance of Borrowers' non-compliance
with Section 8.1.12 or Section 8.1.13.

      8.1.3  Financial  Statements.  Keep,  and cause each  Subsidiary  to 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  Borrowers'  certified  public  accountants  concur in any change
therein and such change is disclosed to Lender and is consistent with GAAP):

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

            (ii) not later  than 45 days  after the end of each  fiscal  quarter
      hereafter,  including  the last  fiscal  quarter  of TMCI's  fiscal  year,
      unaudited interim financial  statements of TMCI and its Subsidiaries as of
      the end of such quarter and of the portion of TMCI's  financial  year then
      elapsed,  on a  consolidated  and  consolidating  basis,  certified by the
      principal  financial  officer of TMCI as prepared in accordance  with GAAP
      and fairly presenting the consolidated  financial  position and results of
      operations  of TMCI and its  Subsidiaries  for  such  quarter  and  period
      subject  only to changes from audit and  year-end  adjustments  and except
      that such statements need not contain notes;

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

            (iv) promptly after the sending or filing  thereof,  as the case may
      be, copies of any proxy statements,  financial statements or reports which
      TMCI has made  available  to its  shareholders  and copies of any regular,
      periodic and special reports or registration  statements  which TMCI files
      with the Securities and Exchange Commission or any governmental  authority
      which may be substituted therefor, or any national securities exchange;

            (v) promptly after the filing  thereof,  copies of any annual report
      to be filed in compliance with ERISA in connection with each Plan; and

            (vi) such other data and  information  (financial  and otherwise) as
      Lender, from time to time, may reasonably request, bearing upon or related
      to the Collateral or Borrowers' and each of their Subsidiaries'  financial
      condition or results of operations.

      Concurrently  with the delivery of the financial  statements  described in
clause (i) of this subsection 8.1.3, Borrowers shall forward to Lender a copy of
the accountants' letter to Borrowers'  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 TMCI and its  Subsidiaries  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
in making  its  decisions  with  respect  to the  Loans.  Concurrently  with the
delivery of the financial statements described in clauses (i), (ii) and (iii) of
this  subsection  8.1.3,  or more  frequently if requested by Lender,  Borrowers
shall cause to be prepared and furnished to Lender a Compliance  Certificate  in
the  form of  Exhibit  N hereto  executed  by the  Chief  Financial  Officer  of
Borrower.

      8.1.4 Landlord and Storage  Agreements.  Provide Lender with copies of all
agreements  between any Borrower or any of its  Subsidiaries and any landlord or
warehouseman  which owns any premises at which any  Inventory  may, from time to
time, be kept.

      8.1.5 Intentionally Deleted.

      8.1.6  Projections.  No later than 30 days prior to the end of each fiscal
year  of  Borrowers,   deliver  to  Lender  Projections  of  Borrowers  for  the
forthcoming fiscal year, month by month.

      8.1.7 Compliance with Laws.  Borrowers shall, at all times,  comply in all
material  respects  with  all  laws,  rules,  regulations,   licenses,  permits,
approvals and orders  applicable to it and duly observe all  requirements of any
Federal, State or local governmental authority,  including,  without limitation,
ERISA,  the  Occupational  Safety and Hazard Act of 1970,  as amended,  the Fair
Labor Standards Act of 1938, as amended, and all statutes,  rules,  regulations,
orders,  permits  and  stipulations  relating  to  environmental  pollution  and
employee  health  and  safety,  including,   without  limitation,   all  of  the
Environmental Laws.

            (a) Borrowers  shall  establish and maintain,  at their  expense,  a
      system  to  assure  and  monitor  their  continued   compliance  with  all
      Environmental Laws in all of their operations,  which system shall include
      annual reviews of such  compliance by employees or agents of Borrowers who
      are familiar with the requirements of the  Environmental  Laws.  Copies of
      all environmental surveys,  audits,  assessments,  feasibility studies and
      results of remedial  investigations shall be promptly furnished, or caused
      to be furnished,  by Borrowers to Lender.  Borrowers shall take prompt and
      appropriate  action  to  respond  to any  non-compliance  with  any of the
      Environmental Laws and shall regularly report to Lender on such response.

            (b)  Borrowers  shall  give both oral and  written  notice to Lender
      immediately  upon  any  Borrower's  receipt  of  any  notice  of,  or  any
      Borrower's  otherwise  obtaining  knowledge of, (i) the  occurrence of any
      event involving the release, spill or discharge,  threatened or actual, of
      any Hazardous Material or (ii) any investigation,  proceeding,  complaint,
      order, directive, claims, citation or notice with respect to: (A) any non-
      compliance with or violation of any  Environmental  Law by any Borrower or
      (B)  the  release,  spill  or  discharge,  threatened  or  actual,  of any
      Hazardous  Material  or  (C)  the  generation,  use,  storage,  treatment,
      transportation,  manufacture,  handling,  production  or  disposal  of any
      Hazardous  Materials  or (D) any  other  environmental,  health  or safety
      matter,  which affects any Borrower or its business,  operations or assets
      or any properties at which any Borrower transported, stored or disposed of
      any Hazardous Materials.

            (c) Without  limiting  the  generality  of the  foregoing,  whenever
      Lender  reasonably  determines  that  there  is  non-  compliance,  or any
      condition which requires any action by or on behalf of Borrowers or any of
      their Subsidiaries in order to avoid any material non-compliance, with any
      Environmental  Law,  Borrowers  shall, at Lender's  request and Borrowers'
      expense:  (i) cause an independent  environmental  engineer  acceptable to
      Lender to  conduct  such  tests of the site  where any  Borrower's  or its
      Subsidiaries'   non-compliance   or  alleged   non-compliance   with  such
      Environmental Laws has occurred as to such  non-compliance and prepare and
      deliver to Lender a report as to such non-  compliance  setting  forth the
      results of such tests, a proposed plan for responding to any environmental
      problems described therein,  and an estimate of the costs thereof and (ii)
      provide to Lender a  supplemental  report of such  engineer  whenever  the
      scope  of such  non-compliance,  or  Borrowers'  response  thereto  or the
      estimated costs thereof, shall change in any material respect.

            (d)  Borrowers  shall  indemnify  and  hold  harmless  Lender,   its
      directors,   officers,   employees,  agents,  invitees,   representatives,
      successors  and  assigns,  from and against  any and all  losses,  claims,
      damages,  liabilities,  costs, and expenses (including attorneys' fees and
      legal expenses)  directly or indirectly  arising out of or attributable to
      the  use,  generation,   manufacture,   reproduction,   storage,  release,
      threatened release, spill, discharge,  disposal or presence of a Hazardous
      Material,  including,  without  limitation,  the costs of any  required or
      necessary  repair,  cleanup  or other  remedial  work with  respect to any
      property of Borrowers or any of their Subsidiaries and the preparation and
      implementation  of any  closure,  remedial or other  required  plans.  All
      representations,   warranties,  covenants  and  indemnifications  in  this
      Section  9.3  shall  survive  the  payment  of  the  Obligations  and  the
      termination or non-renewal of this Agreement.

      8.1.8 Payment of Taxes, Charges. Pay and cause each of its Subsidiaries to
pay and  discharge all taxes,  assessments  and  governmental  charges or levies
imposed on it or on its income or profits or on any of its Property prior to the
date on which penalties attached thereto,  except for any such tax,  assessment,
charge or levy the  payment  of which is being  contested  in good  faith and by
proper  proceedings and against which adequate  reserves are being maintained in
accordance with GAAP.

      8.1.9  Business and  Existence.  Preserve and not change its business from
the manufacture and sale of metal fabrications,  cable assemblies and electronic
components  for  original  equipment  manufacturers,  preserve  and maintain its
separate  corporate  existence  and all rights,  privileges,  and  franchises in
connection  therewith,  and maintain its  qualification and good standing in all
states in which  such  qualification  is  necessary  in order for  Borrowers  to
conduct their businesses in such states or in which the failure of a Borrower to
be so qualified would have a material adverse effect on the financial condition,
business or Properties of such Borrower.

      8.1.10      Maintain   Properties.   Maintain  its  Properties  in  good
condition and make all necessary renewals,  repairs,  replacements,  additions
and improvements thereto.

      8.1.11  ERISA  Compliance.  (i)  At  all  times  make  prompt  payment  of
contributions  required to meet the minimum funding standards set forth in ERISA
with  respect to each Plan;  (ii)  furnish to  Lender,  promptly  upon  Lender's
request  therefor,  copies of any annual report required to be filed pursuant to
ERISA in connection with each Plan and any other employee benefit plan of it and
its subject to said Section;  (iii) notify Lender as soon as  practicable of any
Reportable  Event and of any additional  act or condition  arising in connection
with  any  Plan  which  Borrowers  believe  might  constitute  grounds  for  the
termination  thereof by the  Pension  Benefit  Guaranty  Corporation  or for the
appointment  by the  appropriate  United States  district  court of a trustee to
administer the Plan; and (iv) furnish to Lender,  promptly upon Lender's request
therefor,  such  additional  information  concerning  any Plan or any other such
employee benefit plan.

      8.1.12  Mandatory  Conversion of  Subordinated  Debt. If the  subordinated
indebtedness of TMCI under the Convertible Subordinated Debenture due 2001 dated
February 10, 1998 has not  previously  been  converted into common stock of TMCI
prior to February 10, 2001,  TMCI shall convert such  subordinated  indebtedness
into common stock on February 15, 2001.

      8.1.13  Mandatory   Payment  Through  Stock  Delivery.   Payments  of  the
"Shortfall  Amount" under that certain  Settlement and Release  Agreement by and
among Pen Interconnect,  Inc., TMCI Electronics, Inc., Touche Electronics, Inc.,
and Rolando  Loera dated  December 5, 1997 shall be paid through the delivery of
stock only and not in cash.

8.2   Negative Covenants.

      During the term of this Agreement, and thereafter for so long as there are
any Obligations to Lender, each Borrower covenants that, unless Lender has first
consented thereto in writing, it will not:

      8.2.1 Mergers;  Consolidations;  Acquisitions.  Merge or  consolidate,  or
permit any Subsidiary of any Borrower to merge or consolidate,  with any Person;
nor  acquire,  nor  permit  any  of  its  Subsidiaries  to  acquire,  all or any
substantial part of the Properties of any Person. Notwithstanding the foregoing,
TMCI or a Subsidiary of TMCI may acquire  substantially all of the assets or all
of the capital stock of First Source,  Inc.  provided that  Borrowers  shall (i)
provide to Lender copies of any letter of intent, memorandum of understanding or
offer letters with respect to such acquisitions  promptly  following the signing
thereof,  (ii) provide to Lender  copies of all Purchase  Documents  relating to
such  acquisition at least five (5) Business Days prior to the signing  thereof,
which  Purchase  Documents  must be  satisfactory  to Lender,  (iii) arrange for
Lender and its  representatives  to have access to the entity to be acquired and
its books,  records and assets and to the Borrowers'  due diligence  information
and evaluation  thereof prior to any closing on such acquisition for the purpose
of  conducting a due  diligence  investigation  thereof and to verify that after
giving effect to such  acquisition,  Borrowers will continue to have  sufficient
Availability,  as reasonably  determined by Lender,  (iv) cause the entity to be
acquired or, if a Subsidiary  of TMCI that  acquires  the business  thereof,  to
become a co-borrower under this Agreement or a guarantor of the Obligations,  as
the Lender may determine, and to grant to Lender a first priority perfected Lien
in all of its personal and real Property, tangible and intangible.

      8.2.2 Loans.  Make, or permit any  Subsidiary of any Borrower to 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.

      8.2.3 Total Indebtedness.  Create,  incur,  assume, or suffer to exist, or
permit any Subsidiary of any Borrower to create,  incur or suffer to exist,  any
Indebtedness, except:

            (i)         Obligations owing to Lender;

            (ii)  Subordinated  Debt existing on the date of this  Agreement and
      Subordinated  Debt issued  hereafter on terms and  conditions  approved by
      Lender and subject to a Subordination Agreement acceptable to Lender;

            (iii)  Indebtedness  of any  Subsidiary  of  any  Borrower  to  such
      Borrower or of any Borrower to another Borrower;

            (iv)  accounts  payable to trade  creditors  and  current  operating
      expenses  (other than for Money Borrowed) which are not aged more than 120
      days from  billing  date or more  than 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 Borrowers or such Subsidiary shall
      have set aside such reserves, if any, with respect thereto as are required
      by GAAP and deemed  adequate by  Borrowers  or such  Subsidiary  and their
      independent accountants;

            (v)         Obligations  to pay Rentals  permitted  by  subsection
      8.2.13;

            (vi)        Permitted Purchase Money Indebtedness;

            (vii) contingent  liabilities  arising out of endorsements of checks
      and other negotiable instruments for deposit or collection in the ordinary
      course of business; and
            (viii)  Indebtedness  not included in  paragraphs  (i) through (vii)
      above  which does not  exceed at any time,  in the  aggregate,  the sum of
      $100,000.00.

      8.2.4 Affiliate Transactions.  Enter into, or be a party to, or permit any
Subsidiary of any Borrower to enter into or be a party to, any transaction  with
any Affiliate of a Borrower or stockholder, except in the ordinary course of and
pursuant to the  reasonable  requirements  of  Borrowers'  or such  Subsidiary's
business and upon fair and reasonable  terms which are fully disclosed to Lender
and are no less favorable to Borrowers  than would obtain in a comparable  arm's
length  transaction  with a Person not an Affiliate or stockholder of a Borrower
or such Subsidiary.

      8.2.5  Limitation  on Liens.  Create or  suffer  to exist,  or permit  any
Subsidiary  of any  Borrower to create or suffer to exist,  any Lien upon any of
its Property,  income or profits,  including,  without  limitation,  the capital
stock of the Subsidiaries, whether now owned or hereafter acquired, except:

            (i)         Liens at any time granted in favor of Lender;

            (ii) Liens for taxes  (excluding any Lien imposed pursuant to any of
      the  provisions  of ERISA) not yet due, or being  contested  in the manner
      described in subsection  7.1.14 hereto,  but only if in Lender's  judgment
      such Lien does not  adversely  affect  Lender's  rights or the priority of
      Lender's Lien in the Collateral;

            (iii) Liens arising in the ordinary course of a Borrower's  business
      by operation of law or  regulation,  but only if payment in respect of any
      such  Lien is not at the  time  required  and such  Liens  do not,  in the
      aggregate,  materially  detract  from the  value of the  Property  of such
      Borrower  or  materially  impair  the  use  thereof  in the  operation  of
      Borrower's business;

            (iv)        Purchase  Money  Liens  securing   Permitted  Purchase
      Money Indebtedness;

            (v) Liens securing Indebtedness of a Borrower's Subsidiaries to such
      Borrower or another such Subsidiary;

            (vi)        such other Liens as appear on Exhibit O hereto; and

            (vii) such other Liens as Lender may hereafter approve in writing.

      8.2.6 Subordinated Debt. Make, or permit any Subsidiary of any Borrower to
make, any payment of any part or all of any Subordinated  Debt or take any other
action or omit to take any other  action in  respect of any  Subordinated  Debt,
except for  regularly  scheduled  payments  of interest  thereon,  so long as no
Default or Event of Default exists hereunder.

      8.2.7  Distributions  .  Declare  or make,  or permit  any  Subsidiary  of
Borrower to declare or make, any Distributions.

      8.2.8  Capital  Expenditures.  Make  Capital  Expenditures  that  are  not
financed  by way of  capitalized  leases  or  purchase  money  financings  or as
otherwise  permitted  hereunder,  which,  in the aggregate,  as to Borrowers and
their  Subsidiaries  as a group,  exceed  $750,000.00  during any fiscal year of
Borrower.

      8.2.9  Disposition of Assets.  Sell, lease or otherwise dispose of any of,
or permit any Subsidiary of any Borrower to sell, lease or otherwise dispose any
of, its Properties,  including any disposition of Property as part of a sale and
leaseback  transaction,  to or in  favor  of any  Person,  except  (i)  sales of
Inventory in the ordinary  course of business for so long as no Event of Default
exists  hereunder,  (ii) a transfer of Property to a Borrower by a Subsidiary of
such Borrower or (iii) dispositions expressly authorized by this Agreement.

      8.2.10 Stock of Subsidiaries.  Permit any of its Subsidiaries to issue any
additional shares of its capital stock except director's qualifying shares.

      8.2.11  Bill-and-Hold  Sales,  Etc.  Make a  sale  to  any  customer  on a
bill-and-hold, guaranteed sale, sale and return, sale on approval or consignment
basis, or any sale on a repurchase or return basis.

      8.2.12      Restricted   Investment.   Make  or  have,   or  permit  any
Subsidiary of any Borrower to make or have, any Restricted Investment.

      8.2.13 Leases.  Become,  or permit any of its  Subsidiaries  to become,  a
lessee under any  operating  lease (other than a lease under which a Borrower or
any of its Subsidiaries is lessor) of Property if the aggregate  Rentals payable
during any current or future period of 12 consecutive  months under the lease in
question and all other leases under which Borrowers or any of their Subsidiaries
is then lessee would exceed $1,000,000. The term "Rentals" means, as of the date
of determination, all payments which the lessee is required to make by the terms
of any such operating lease.

      8.2.14  Tax   Consolidation.   File  or  consent  to  the  filing  of  any
consolidated  income tax  return  with any  Person  other  than a Borrower  or a
Subsidiary of a Borrower.

      8.2.15      Fiscal Year.  Change its fiscal year.

8.3   Specific Financial Covenants.

      During the term of this Agreement, and thereafter for so long as there are
any Obligations to Lender,  Borrowers covenant that, unless otherwise  consented
to by Lender in writing, TMCI shall:

      8.3.1  Minimum  Adjusted  Tangible  Net  Worth.  Maintain  at all  times a
Consolidated Adjusted Tangible Net worth of not less than the amount shown below
for the period corresponding thereto:


                 Period                             Amount

                 Closing Date through December      $3,750,000.00
                 31,1998
                 January 1, 1999 through December   $4,500,000.00
                 31, 1999
                 Each January 1st thereafter        The amount for the
                 through the following December     prior year plus
                 31st                               $750,000.00

      8.3.2 Cash Flow.  Achieve Cash Flow for each fiscal period set forth below
of not less than the amount show below for the period corresponding thereto:


                 Period                             Amount

                 Three  Months  Ended March 31, 1998 $ - 0 Six Months Ended June
                 30, 1998 $ - 0 Nine Months Ended September 30, $250,000.00 1998
                 Twelve Months Ended December 31,  $500,000.00  1998 Each Fiscal
                 Quarter Ending $500,000.00 Thereafter For the Prior Four Fiscal
                 Quarters

SECTION 9.    CONDITIONS PRECEDENT

9.1 Conditions to Initial Loans and LC Guaranties.
      Notwithstanding  any other provision of this Agreement or any of the other
Loan Documents,  and without  affecting in any manner the rights of Lender under
the other sections of this  Agreement,  Lender shall not be required to make the
initial Loans and LC Guaranties  under this  Agreement  unless and until each of
the following conditions has been and continues to be satisfied:

      9.1.1  Documentation.  Lender shall have  received,  in form and substance
satisfactory  to Lender and its counsel,  a duly executed copy of this Agreement
and  the  other  Loan  Documents,   together  with  such  additional  documents,
instruments  and  certificates  as  Lender  and its  counsel  shall  require  in
connection  therewith from time to time, all in form and substance  satisfactory
to Lender and its counsel.

      9.1.2 Other Loan Documents.  Each of the conditions precedent set forth in
the other Loan Documents shall have been satisfied.

      9.1.3  Availability.  Lender shall have determined that immediately  after
Lender has made the initial  Loans and issued the initial  Letters of Credit and
LC  Guaranties  contemplated  hereby,  and paid all  closing  costs  incurred in
connection with the transactions contemplated hereby,  Availability shall not be
less than $2,000,000.00.

      9.1.4 No Litigation. No action, proceeding,  investigation,  regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin,  restrain or prohibit,  or to
obtain  damages  in  respect  of, or which is  related  to or arises out of this
Agreement or the consummation of the transactions contemplated hereby.

      9.1.5  Acquisitions.  The Borrowers shall have furnished to Lender and its
legal  counsel  complete  copies  of  all  Purchase  Documents  relating  to the
Borrowers' proposed acquisitions of Trinity Electronics,  Inc. and First Source,
Inc. and such Purchase Documents shall be in form and substance  satisfactory to
Lender.

      9.1.6  Landlord  Waivers.   Landlord,   warehouseman  or  other  necessary
agreements satisfactory to Lender shall be furnished to Lender for all locations
where Collateral is located that are not owned by Borrower.

      9.1.7  Lien  Filings.  Lender  shall  have  received  copies of all filing
receipts  or  acknowledgments  issued to evidence  all  filings or  recordations
necessary to perfect the Liens of Lender in the Collateral in a form  acceptable
to Lender to ensure that such Liens constitute first and only priority valid and
perfected Liens.

      9.1.8  Insurance.  Borrowers shall deliver to Lender  certified  copies of
Borrowers' casualty insurance policies,  together with loss payable endorsements
on Lender's standard form of loss payee endorsement naming Lender as loss payee,
and certified copies of Borrowers'  liability insurance policies,  together with
endorsements naming Lender as a co-insured.

      9.1.9 Subordinated  Debt.  Borrowers shall have received a cash investment
of  Subordinated  Debt of not less than  $3,000,000.00  and the  holders  of all
Subordinated  Debt issued by any Borrower shall have duly executed and delivered
to  Lender a  Subordination  Agreement  in form and  substance  satisfactory  to
Lender.

      9.1.10  Solvency.   Lender  shall  have  received  such  certificates  and
documents  demonstrating  the  Solvency  of each  Borrower,  including,  without
limitation,  the Solvency  Certificate  after giving effect to the  transactions
contemplated by this Agreement and the Purchase Documents,  as Lender shall find
acceptable,   including,  without  limitation,  the  pro  forma  balance  sheet,
forecasted financial statements  consisting of balance sheets, income statements
and cash flow statements for Borrowers  covering at least the three-year  period
commencing  on the Closing  Date,  prepared by  Borrowers  and a fair  valuation
balance sheet for Borrower.

      9.1.11 No Material  Adverse  Change.  Since September 30, 1997 there shall
not have  occurred  any  material  adverse  change  in the  business,  financial
condition  or  results  of  operations  of the  Seller or the  Borrower,  or the
existence or value of any Collateral,  or any event, condition or state of facts
which  would  reasonably  be expected  materially  and  adversely  to affect the
business, financial condition or results of operations of Borrower.

      9.1.12      Pen  Electronics  Litigation.  The  litigation  between  Pen
Electronics,  Inc. and TMCI shall have been resolved in a manner  satisfactory
to Lender and Pen Electronics,  Inc. shall have released its Liens, if any, on
the assets of the Borrowers.

      9.1.13  Inventory  Testing/Analysis.  Lender shall have conducted  further
testing  and  analysis  of  the  Borrowers'  Inventory  and  of  the  Borrowers'
management   information   systems  and  such  testing  and  analysis  shall  be
satisfactory to Lender.

9.2 Conditions to All Loans and LC Guaranties.

      Notwithstanding  any  other  provision  of this  Agreement  or other  Loan
Documents  and without  affecting  in any manner the rights of Lender  under the
other sections of this Agreement,  Lender shall not be required to make any Loan
or LC Guaranty  (including the initial Loans and LC  Guaranties)  unless each of
the following conditions are satisfied:

            (a) All representations  and warranties  contained herein and in the
      other Loan Documents shall be true and correct in all respects.

            (b) No material adverse change in the business, financial condition,
      or results of  operations of any Borrower  shall have  occurred  since the
      date of Lender's latest audit of Borrowers including,  without limitation,
      that no material  investigation,  litigation or other proceedings shall be
      pending or threatened against any Borrower.

            (c) No Default or Event of Default shall exist.

            (d)  Lender  shall  have   received   such   additional   documents,
      statements,  certificates,  information and evidence as Lender may request
      and all  documents  and all actions  required to be taken on or before the
      making of any Loan shall have been taken.

SECTION 10.   EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

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

      10.1.1 Payment of Notes.  Borrowers  shall fail to pay any  installment of
principal, interest or premium, if any, owing on the Term Notes or the Equipment
Note on the due date of such installment.

      10.1.2 Payment of Other  Obligations.  Borrowers  shall fail to pay any of
the  Obligations  that are not evidenced by the Term Notes or the Equipment Note
on the due date  thereof  (whether  due at  stated  maturity,  on  demand,  upon
acceleration or otherwise).

      10.1.3 Misrepresentations. Any representation, warranty or other statement
made or furnished to Lender by or on behalf of any Borrower,  any  Subsidiary of
any  Borrower  in  this  Agreement,  any  of the  other  Loan  Documents  or any
instrument,  certificate or financial  statement furnished in compliance with or
in reference  thereto  proves to have been false or  misleading  in any material
respect  when made or  furnished  or when  reaffirmed  pursuant  to Section  7.2
hereof.

      10.1.4 Breach of Specific  Covenants.  Borrowers  shall fail or neglect to
perform,  keep or observe any covenant contained in Sections 5.2, 6.1.1,  6.1.2,
6.2.4, 6.2.5, 6.2.6, 8.1.1, 8.1.3, 8.1.12, 8.1.13, 8.2 or 8.3 hereof on the date
that Borrowers are required to perform, keep or observe such covenant.

      10.1.5  Breach of Other  Covenants.  Borrowers  shall  fail or  neglect to
perform,  keep or observe any covenant contained in this Agreement (other than a
covenant which is dealt with specifically  elsewhere in Section 10.1 hereof) and
the breach of such other covenant is not cured to Lender's  satisfaction  within
15 days after the sooner to occur of Borrowers' receipt of notice of such breach
from Lender or the date on which such failure or neglect  first becomes known to
any officer of any Borrower.

      10.1.6   Default  Under   Security   Documents/Other   Agreements/Purchase
Documents. Any event of default shall occur under, or Borrowers shall default in
the  performance  or  observance of any term,  covenant,  condition or agreement
contained  in, any of the Security  Documents;  or the Other  Agreements  or the
Purchase  Documents and such default shall continue beyond any applicable  grace
period.

      10.1.7 Other  Defaults.  There shall occur any default or event of default
on the part of any Borrower under any agreement, document or instrument to which
a Borrower  is a party or by which a Borrower  or any of its  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.

      10.1.8 Uninsured Losses.  Any material loss, theft,  damage or destruction
of any of the  Collateral  not fully  covered  (subject to such  deductibles  as
Lender shall have permitted) by insurance.

      10.1.9      Adverse  Changes.  There  shall occur any  material  adverse
change in the financial condition or business prospects of any Borrower.

      10.1.10 Insolvency and Related Proceedings. Any Borrower shall cease to be
Solvent or shall suffer the  appointment  of a receiver,  trustee,  custodian or
similar fiduciary,  or shall make an assignment for the benefit of creditors, or
any  petition  for an order for relief shall be filed by or against any Borrower
under the Bankruptcy  Code (if against any Borrower,  the  continuation  of such
proceeding  for more  than 30 days),  or any  Borrower  shall  make any offer of
settlement,  extension or composition to their  respective  unsecured  creditors
generally.

      10.1.11 Business Disruption;  Condemnation.  There shall occur a cessation
of a  substantial  part of the business of any Borrower,  any  Subsidiary of any
Borrower for a period which  significantly  affects any  Borrower's  capacity to
continue its business, on a profitable basis; or any Borrower, or any Subsidiary
of Borrower  shall  suffer the loss or  revocation  of any license or permit now
held or hereafter  acquired by such Borrower which is necessary to the continued
or  lawful  operation  of its  business;  or any  Borrower  shall  be  enjoined,
restrained  or in any way  prevented by court,  governmental  or  administrative
order from conducting all or any material part of its business  affairs;  or any
material lease or agreement  pursuant to which Borrower or any Guarantor leases,
uses or occupies  any  Property  shall be canceled  or  terminated  prior to the
expiration  of its stated  term;  or any part of the  Collateral  shall be taken
through  condemnation  or the value of such Property  shall be impaired  through
condemnation.

      10.1.12 Change of Ownership.  A Change in Control shall occur with respect
to TMCI or TMCI shall cease to own and control,  beneficially and of record, all
of the issued and outstanding capital stock of each of its Subsidiaries.
      10.1.13  ERISA. A Reportable  Event shall occur which Lender,  in its sole
discretion,   shall  determine  in  good  faith  constitutes   grounds  for  the
termination by the Pension Benefit  Guaranty  Corporation of any Plan or for the
appointment by the appropriate United States district court of a trustee for any
Plan,  or if any Plan shall be terminated or any such trustee shall be requested
or appointed, or if any Borrower, any Subsidiary of any Borrower is in "default"
(as  defined in Section  4219(c)(5)  of ERISA)  with  respect to  payments  to a
Multiemployer Plan resulting from any Borrower's,  or such Subsidiary's complete
or partial withdrawal from such Plan.

      10.1.14 Challenge to Agreement.  Any Borrower, any Subsidiary of Borrower,
or any Affiliate of any of them, shall challenge or contest in any action,  suit
or proceeding the validity or  enforceability  of this Agreement,  or any of the
other Loan Documents,  the legality or  enforceability of any of the Obligations
or the perfection or priority of any Lien granted to Lender.

      10.1.15     Intentionally Omitted.

      10.1.16 Criminal Forfeiture.  Any Borrower,  or any Subsidiary of Borrower
shall be  criminally  indicted or  convicted  under any law that could lead to a
forfeiture of any Property of Borrower, or any Subsidiary of Borrower.

      10.1.17  Judgments.  Any  money  judgment,  in  an  amount  in  excess  of
$50,000.00 for any single judgment or exceeding  $100,000.00 in the aggregate or
any writ of attachment or similar process is filed against any Borrower,  or any
Subsidiary of Borrower, or any of their respective Property.

10.2  Acceleration of the Obligations.

      Without in any way limiting  the right of Lender to demand  payment of any
portion of the  Obligations  payable on demand in  accordance  with  Section 3.2
hereof, upon or at any time after the occurrence of an Event of Default,  all or
any  portion of the  Obligations  shall,  at the  option of Lender  and  without
presentment,  demand protest or further notice by Lender, become at once due and
payable and Borrowers  shall  forthwith  pay to Lender,  the full amount of such
Obligations, provided, that upon the occurrence of an Event of Default specified
in subsection 10.1.10 hereof, all of the Obligations shall become  automatically
due and payable without declaration, notice or demand by Lender.

10.3  Other Remedies.

      Upon and after the  occurrence  of an Event of Default,  Lender shall have
and may exercise from time to time the following rights and remedies:

      10.3.1 All of the rights and remedies of a secured party under the Code or
under other  applicable  law, and all other legal and equitable  rights to which
Lender may be entitled, all of which rights and remedies shall be cumulative and
shall be in addition to any other rights or remedies contained in this Agreement
or any of the other Loan Documents, and none of which shall be exclusive.

      10.3.2 The right to take immediate  possession of the  Collateral,  and to
(i) require  Borrowers to assemble the Collateral,  at Borrowers'  expense,  and
make it available to Lender at a place  designated by Lender which is reasonably
convenient  to both  parties,  and (ii)  enter  any  premises  where  any of the
Collateral  shall  be  located  and to keep and  store  the  Collateral  on said
premises  until  sold  (and if  said  premises  be the  Property  of  Borrowers,
Borrowers agree not to charge Lender for storage thereof).

      10.3.3 The right to sell or otherwise  dispose of all or any Collateral in
its then condition, or after any further manufacturing or processing thereof, at
public or private sale or sales,  with such notice as may be required by law, in
lots or in bulk, for cash or on credit,  all as Lender,  in its sole discretion,
may deem advisable.  Borrowers agree that 10 days written notice to Borrowers of
any  public  or  private  sale or  other  disposition  of  Collateral  shall  be
reasonable  notice  thereof,  and such sale shall be at such locations as Lender
may designate in said notice.  Lender shall have the right to conduct such sales
on Borrowers' premises, without charge therefor, and such sales may be adjourned
from time to time in accordance with applicable law. Lender shall have the right
to sell, lease or otherwise dispose of the Collateral,  or any part thereof, for
cash, credit or any combination thereof, and Lender may purchase all or any part
of the  Collateral at public or, if permitted by law,  private sale and, in lieu
of actual payment of such purchase  price,  may set off the amount of such price
against the Obligations.  The proceeds  realized from the sale of any Collateral
may be applied,  after  allowing 2 Business  Days for  collection,  first to the
costs,  expenses  and  attorneys'  fees  incurred  by Lender in  collecting  the
Obligations,  in enforcing the rights of Lender under the Loan  Documents and in
collecting, retaking, completing, protecting, removing, storing, advertising for
sale, selling and delivering any Collateral, second to the interest due upon any
of the  Obligations;  and third,  to the  principal of the  Obligations.  If any
deficiency  shall arise,  Borrowers shall remain jointly and severally liable to
Lender therefor.

      10.3.4 Lender is hereby  granted a license or other right to use,  without
charge, Borrowers' labels, patents, copyrights, rights of use of any name, trade
secrets,  tradenames,  trademarks and advertising  matter,  or any Property of a
similar nature,  as it pertains to the  Collateral,  in advertising for sale and
selling  any  Collateral  and  Borrowers'  rights  under  all  licenses  and all
franchise agreements shall inure to Lender's benefit.

      10.3.5 Lender may, at its option, require Borrowers to deposit with Lender
funds  equal to the LC Amount  and,  if  Borrowers  fail to  promptly  make such
deposit,  Lender may advance such amount as a Revolving  Credit Loan (whether or
not an  Overadvance  is created  thereby).  Any such deposit or advance shall be
held by Lender as a reserve to fund future  payments on such LC  Guaranties  and
future  drawings  against  such  Letters  of  Credit.  At  such  time  as all LC
Guaranties  have been paid or  terminated  and all  Letters of Credit  have been
drawn upon or expired,  any amounts  remaining in such reserve  shall be applied
against  any  outstanding   Obligations,   or,  if  all  Obligations  have  been
indefeasibly paid in full in cash, returned to Borrowers.

10.4  Remedies Cumulative; No Waiver.

      All   covenants,   conditions,    provisions,    warranties,   guaranties,
indemnities, and other undertakings of Borrowers contained in this Agreement and
the other Loan Documents,  or in any document referred to herein or contained in
any  agreement  supplementary  hereto  or in any  schedule  or in  any  Guaranty
Agreement given to Lender or contained in any other agreement between Lender and
Borrowers, heretofore,  concurrently, or hereafter entered into, shall be deemed
cumulative  to and  not  in  derogation  or  substitution  of any of the  terms,
covenants,  conditions, or agreements of Borrowers herein contained. The failure
or delay of Lender to require  strict  performance by Borrowers of any provision
of this  Agreement  or to  exercise or enforce any  rights,  Liens,  powers,  or
remedies  hereunder or under any of the aforesaid  agreements or other documents
or security  or  Collateral  shall not operate as a waiver of such  performance,
Liens, rights,  powers and remedies,  but all such requirements,  Liens, rights,
powers, and remedies shall continue in full force and effect until all Loans and
all other  Obligations  owing or to become owing from  Borrowers to Lender shall
have been fully satisfied.  None of the  undertakings,  agreements,  warranties,
covenants and representations of Borrowers contained in this Agreement or any of
the other  Loan  Documents  and no Event of  Default  by  Borrowers  under  this
Agreement or any other Loan Documents  shall be deemed to have been suspended or
waived by  Lender,  unless  such  suspension  or waiver is by an  instrument  in
writing  specifying such suspension or waiver and is signed by a duly authorized
representative of Lender and directed to Borrowers.

SECTION 11.   MISCELLANEOUS

11.1 Power of Attorney.
      Each  Borrower  hereby  irrevocably  designates,  makes,  constitutes  and
appoints  Lender (and all Persons  designated by Lender) as each such Borrower's
true and lawful attorney (and agent-in-fact) and Lender, or Lender's agent, may,
without  notice to  Borrowers  and in either any or all  Borrowers'  or Lender's
names, but at the cost and expense of Borrowers:

      11.1.1  At such  time or  times  as  Lender  or said  agent,  in its  sole
discretion,  may determine,  endorse any Borrower's  name on any checks,  notes,
acceptances,  drafts,  money orders or any other evidence of payment or proceeds
of the  Collateral  which come into the  possession of Lender or under  Lender's
control.

      11.1.2 At such time or times upon or after the  occurrence  of an Event of
Default as Lender or its agent in its sole discretion may determine:  (i) demand
payment  of the  Accounts  from the  Account  Debtors,  enforce  payment  of the
Accounts by legal  proceedings  or  otherwise,  and  generally  exercise  all of
Borrowers'  rights and remedies with respect to the  collection of the Accounts;
(ii)  settle,  adjust,  compromise,  discharge or release any of the Accounts or
other Collateral or any legal proceedings brought to collect any of the Accounts
or  other  Collateral;  (iii)  sell or  assign  any of the  Accounts  and  other
Collateral upon such terms, for such amounts and at such time or times as Lender
deems  advisable;  (iv) take control,  in any manner,  of any item of payment or
proceeds relating to any Collateral;  (v) prepare,  file and sign any Borrower's
name to a proof of claim in bankruptcy or similar  document  against any Account
Debtor or to any notice of lien,  assignment or  satisfaction of lien or similar
document  in  connection  with any of the  Collateral;  (vi)  receive,  open and
dispose of all mail  addressed to Borrowers and to notify postal  authorities to
change the address for delivery thereof to such address as Lender may designate;
(vii) endorse the name of Borrowers upon any of the items of payment or proceeds
relating  to any  Collateral  and  deposit  the same to the account of Lender on
account  of the  Obligations;  (viii)  endorse  the name of  Borrowers  upon any
chattel paper, document,  instrument,  invoice,  freight bill, bill of lading or
similar document or agreement relating to the Accounts,  Inventory and any other
Collateral;  (ix) use  Borrowers'  stationery  and sign the name of Borrowers to
verifications  of the Accounts and notices thereof to Account  Debtors;  (x) use
the information  recorded on or contained in any data  processing  equipment and
computer  hardware and software relating to the Accounts,  Inventory,  Equipment
and any  other  Collateral;  (xi)  make and  adjust  claims  under  policies  of
insurance;  and  (xii) do all  other  acts and  things  necessary,  in  Lender's
determination, to fulfill Borrowers' obligations under this Agreement.

11.2  Indemnity.

      Each 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)  in  connection  with or arising  out of the  transactions  under this
Agreement and the other Loan  Documents  whether as the result of any Borrower's
failure to observe,  perform or discharge any Borrower's duties  hereunder,  the
actions or omissions of any other Person or otherwise, except to the extent that
such is determined by a final and non-appealable judgment or court order to have
arisen from Lender's  gross  negligence or willful  misconduct.  In addition and
without  limitation of the  foregoing,  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 any  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 Borrowers  under this  Section 11.2 shall  survive the payment in
full of the Obligations and the termination of this Agreement.

11.3  Modification of Agreement; Sale of Interest.

      This  Agreement  may not be  modified,  altered or  amended,  except by an
agreement in writing  signed by Borrowers  and Lender.  Borrowers  may not sell,
assign or  transfer  any  interest  in this  Agreement,  any of the  other  Loan
Documents, or any of the Obligations, or any portion thereof, including, without
limitation,  Borrowers' rights, title, interests,  remedies,  powers, and duties
hereunder or thereunder.  Borrowers  hereby  consent to Lender's  participation,
sale, assignment, transfer or other disposition, at any time or times hereafter,
of this Agreement and any of the other Loan Documents,  or of any portion hereof
or thereof,  including,  without limitation,  Lender's rights, title, interests,
remedies,  powers,  and  duties  hereunder  or  thereunder.  In the  case  of an
assignment,  the assignee shall have, to the extent of such assignment, the same
rights,  benefits and obligations as it would if it were "Lender"  hereunder and
Lender shall be relieved of all obligations hereunder upon any such assignments.
Borrowers  agree that they will use their best  efforts to assist and  cooperate
with Lender in any manner  reasonably  requested by Lender to effect the sale of
participations  in or  assignments  of any of the Loan  Documents or any portion
thereof or interest therein,  including,  without  limitation,  assisting in the
preparation of appropriate  disclosure  documents.  Borrowers further agree that
Lender  may  disclose   credit   information   regarding   Borrowers  and  their
Subsidiaries to any potential participant or assignee.

11.4  Severability.

      Wherever  possible,  each provision of this Agreement shall be interpreted
in such manner as to be  effective  and valid under  applicable  law, but if any
provision of this Agreement  shall 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 the
remaining provisions of this Agreement.

11.5  Successors and Assigns.

      This Agreement,  the Other Agreements and the Security  Documents shall be
binding upon and inure to the benefit of the successors and assigns of Borrowers
and Lender permitted under Section 11.3 hereof.

11.6  Cumulative Effect; Conflict of Terms.

      The  provisions  of the Other  Agreements  and the Security  Documents are
hereby  made  cumulative  with  the  provisions  of this  Agreement.  Except  as
otherwise provided in Section 3.2 hereof and except as otherwise provided in any
of the other Loan Documents by specific reference to the applicable provision of
this  Agreement,  if any  provision  contained  in this  Agreement  is in direct
conflict  with,  or  inconsistent  with,  any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.

11.7  Execution in Counterparts.

      This  Agreement  may be  executed  in any  number of  counterparts  and by
different  parties  hereto  in  separate  counterparts,  each of  which  when so
executed  and  delivered  shall be  deemed  to be an  original  and all of which
counterparts taken together shall constitute but one and the same instrument.

11.8  Notice.

      Except as otherwise provided herein, all notices,  requests and demands to
or upon a party hereto,  to be effective,  shall be in writing and shall be sent
by certified or registered mail, return receipt requested,  by personal delivery
against  receipt,  by overnight  courier or by facsimile and,  unless  otherwise
expressly provided herein, shall be deemed to have been validly served, given or
delivered  immediately when delivered  against  receipt,  one Business Day after
deposit in the mail,  postage prepaid,  or with an overnight  courier or, in the
case of facsimile notice, when sent, addressed as follows:

          If to Lender:    Fleet Capital Corporation
                           200 Glastonbury Boulevard
                           Glastonbury, Connecticut 06033
                           Attention:  Northeast Loan Administrator
                          Facsimile No.: (860) 657-7759

          With a copy to:  Brown, Rudnick, Freed & Gesmer
                           One Financial Center
                           Boston, Massachusetts 02111
                           Attention:  Jeffery L. Keffer, Esq.
                          Facsimile No.: (617) 856-8201

          If to Borrower:  TMCI Electronics, Inc.
                           Touche Manufacturing, Inc.
                           Touche Electronics, Inc. and
                           Enterprise Industries, Inc.
                           1875 Dobbin Drive
                           San Jose, California 95133
                           Attention:  Rolando Loera, Chief Executive Officer
                          Facsimile No.:(408) 272-4621

          With a copy to:  Rosenblum, Parish & Isaacs
                           160 West Santa Clara Street, 15th Floor
                           San Jose, California 95113
                           Attention: Tom Chaffin, Esq.
                          Facsimile No.: (408) 280-2801

or to such other  address as each party may designate for itself by notice given
in  accordance  with this  Section  11.8;  provided,  however,  that any notice,
request or demand to or upon Lender pursuant to subsection 3.1.1 or 4.2.2 hereof
shall not be effective until received by Lender.

11.9  Intentionally Omitted.

11.10 Joint and Several Liability.

      All Loans,  Letters of Credit and LC Guaranties  made or issued  hereunder
are made to or for the  benefit  of each of the  Borrowers.  The  Borrowers  are
jointly  and  severally,   directly  and  primarily  liable  for  the  full  and
indefeasible  payment when due and  performance of all  Obligations  and for the
prompt and full  payment  and  performance  of all of the  promises,  covenants,
representations,  and warranties  made or undertaken by each Borrower under this
Agreement  and the Loan  Documents and  Borrowers  agree that such  liability is
independent of the duties, obligations, and liabilities of each of the joint and
several  Borrowers.  In furtherance of the foregoing,  each Borrower jointly and
severally,  absolutely and unconditionally guaranties to Lender and agrees to be
liable for the full and indefeasible payment and performance when due of all the
Obligations.  This guarantee is a continuing  guarantee,  and shall apply to all
Obligations whenever arising.

11.11 Suretyship Waivers and Consents.

            (i) Each Borrower acknowledges that the obligations of such Borrower
      undertaken herein might be construed to consist,  at least in part, of the
      guaranty of obligations of persons other than such Borrower (including the
      other  Borrower)  and, in full  recognition  of that fact,  each  Borrower
      consents  and agrees  that  Lender may, at any time and from time to time,
      without notice or demand (except as provided in and in accordance with the
      terms of this Agreement),  whether before or after any actual or purported
      termination,  repudiation or revocation of this Agreement by any Borrower,
      and without  affecting  the  enforceability  or  continuing  effectiveness
      hereof as to each Borrower: (a) increase,  extend, or otherwise change the
      time for payment or the terms of the Obligations or any part thereof;  (b)
      supplement, restate, modify, amend, increase, decrease, or waive, or enter
      into or give any  agreement,  approval  or consent  with  respect  to, the
      Obligations  or any  part  thereof,  this  Agreement,  or any of the  Loan
      Documents or any  additional  security or  guarantees,  or any  condition,
      covenant,  default,  remedy,  right,  representation,  or term  thereof or
      thereunder;  (c)  accept  new or  additional  instruments,  documents,  or
      agreements in exchange for or relative to any of the loan Documents or the
      Obligations  or any part  thereof;  (d)  accept  partial  payments  on the
      Obligations;  (e) receive and hold  additional  security or guarantees for
      the  Obligations or any part thereof;  (f) release,  reconvey,  terminate,
      waive,  abandon,  fail  to  perfect,  subordinate,  exchange,  substitute,
      transfer, or enforce any Collateral, security or guarantees, and apply any
      Collateral  or security  and direct the order or manner of sale thereof as
      Lender in its sole and absolute discretion may determine;  (g) release any
      person from any personal  liability with respect to the Obligations or any
      part thereof;  (h) settle,  release on terms  satisfactory to Lender or by
      operation  of  applicable  laws or  otherwise  liquidate  or  enforce  any
      Obligations and any Collateral or security therefor or guaranty thereof in
      any manner,  consent to the transfer of any Collateral or security and bid
      and  purchase at any sale;  or (i) consent to the merger,  change,  or any
      other  restructuring  or  termination  of  the  corporate  or  partnership
      existence  of  any   Borrower,   and   correspondingly   restructure   the
      Obligations,  and any such merger, change,  restructuring,  or termination
      shall  not  affect  the  liability  of  any  Borrower  or  the  continuing
      effectiveness  hereof, or the enforceability hereof with respect to all or
      any part of the Obligations.

            (ii)  Lender may enforce  this  Agreement  independently  as to each
      Borrower and  independently  of any other remedy or security Lender at any
      time may have or hold in connection with the Obligations, and it shall not
      be necessary  for Lender to marshal  assets in favor of any Borrower or to
      proceed  upon or against or exhaust any  Collateral  or security or remedy
      before  proceeding  to enforce this  Agreement.  Each  Borrower  expressly
      waives  any  right to  require  Lender to  marshal  assets in favor of any
      Borrower or any  guarantor of the  Obligations  or to proceed  against any
      other Borrower,  and agrees that Lender may proceed  against  Borrowers or
      any  Collateral  in such order as Lender  shall  determine in its sole and
      absolute discretion.

            (iii)  Lender may file a  separate  action or  actions  against  any
      Borrower, whether such action is brought or prosecuted with respect to any
      security or against any guarantor of the Obligations, or whether any other
      person is joined in any such action or actions.  Each Borrower agrees that
      Lender and each  Borrower and any  affiliate of any Borrower may deal with
      each other in connection with the  Obligations or otherwise,  or alter any
      contracts or agreements now or hereafter  existing between any of them, in
      any manner  whatsoever,  all without in any way altering or affecting  the
      continuing enforceability of this Agreement. Each Borrower, as a joint and
      several Borrower hereunder, expressly waives the benefit of any statute of
      limitations  affecting  its joint and several  liability  hereunder or the
      enforcement of the  Obligations or any rights of Lender created or granted
      herein.

            (iv) Lender's rights hereunder shall be reinstated and revived,  and
      the  enforceability of this Agreement shall continue,  with respect to any
      amount at any time paid on account  of the  Obligations  which  thereafter
      shall be required to be restored or returned by Lender, all as though such
      amount had not been paid.  The rights of Lender  created or granted herein
      and the  enforceability  of  this  Agreement  at all  times  shall  remain
      effective to cover the full amount of all the Obligations  even though the
      Obligations,  including any part thereof or any Collateral, other security
      or guaranty therefor,  may be or hereafter may become invalid or otherwise
      unenforceable  as against any  Borrower  and  whether or not any  Borrower
      shall have any personal liability with respect thereto.

            (v) Each  Borrower  expressly  waives  any and all  defenses  now or
      hereafter  arising or  asserted by reason of (a) any  disability  or other
      defense of any other  Borrower  with respect to the  Obligations;  (b) the
      unenforceability  or  invalidity  of any  security  or  guaranty  for  the
      Obligations or the lack of perfection or continuing  perfection or failure
      of priority of any security for the Obligations; (c) the cessation for any
      cause whatsoever of the liability of any Borrower (other than by reason of
      the full payment and performance of all  Obligations as required  herein);
      (d) any failure of Lender to marshall assets in favor of any Borrower; (e)
      any  failure  of Lender to give  notice to any  Borrower  of sale or other
      disposition of Collateral of another  Borrower or any defect in any notice
      that may be given in  connection  with  any such  sale or  disposition  of
      Collateral of any Borrower  securing the  Obligations;  (f) any failure of
      Lender to comply with  applicable law in connection with the sale or other
      disposition of any  Collateral or other security of any Borrower,  for any
      Obligation,  including  any  failure of Lender to  conduct a  commercially
      reasonable  sale or other  disposition of any Collateral or other security
      of any Borrower for any  Obligation;  (g) any act or omission of Lender or
      others that  directly or  indirectly  results in or aids the  discharge or
      release of any Borrower or the Obligations of any Borrower or any security
      or guaranty  therefor by operation of law or otherwise;  (h) any law which
      provides  that the  obligation  of a surety or  guarantor  must neither be
      larger in amount nor in other  respects more  burdensome  than that of the
      principal  or which  reduces  a  surety's  or  guarantor's  obligation  in
      proportion to the principal obligation;  (i) any failure of Lender to file
      or enforce a claim in any bankruptcy or other  proceeding  with respect to
      any Borrower; (j) the avoidance of any lien or security interest in assets
      of any Borrower in favor of Lender for any reason; or (k) any action taken
      by Lender that is authorized by this section or any other provision of any
      Loan  Document.  Until such time, if any, as all of the  Obligations  have
      been  indefeasibly  paid  and  performed  in full  and no  portion  of any
      commitment  of Lender to  Borrowers  under any Loan  Document  remains  in
      effect,  each Borrowers'  indebtedness,  claims and rights of subrogation,
      contribution,  reimbursement,  or  indemnity  against the other  Borrowers
      shall be fully and completely  subordinated to the indefeasible  repayment
      in full of the Obligations,  and each Borrower expressly waives until such
      indefeasible  payment  any right to enforce  any remedy that it now has or
      hereafter  may have against any other Person and waives the benefit of, or
      any right to  participate  in, any  Collateral  now or  hereafter  held by
      Lender.

            (vi)  To the  fullest  extent  permitted  by  applicable  law,  each
      Borrower  expressly waives and agrees not to assert,  any and all defenses
      in its favor based upon an election of remedies by Lender which  destroys,
      diminishes,  or affects such  Borrower's  subrogation  rights  against the
      other  Borrowers,  or against any Guarantor,  and/or (except as explicitly
      provided for herein) any rights to proceed against each other Borrower, or
      any  other  party  liable  to  Lender,  for  reimbursement,  contribution,
      indemnity, or otherwise.

            (vii)  Borrowers and each of them warrant and agree that each of the
      waivers and  consents set forth  herein are made after  consultation  with
      legal  counsel  and  with  full  knowledge  of  their   significance   and
      consequences,  with  the  understanding  that  events  giving  rise to any
      defense or right waived may  diminish,  destroy,  or  otherwise  adversely
      affect  rights  which  Borrowers  otherwise  may have  against each other,
      Lender,   or  others,   or  against   Collateral,   and  that,  under  the
      circumstances,  the waivers and consents  herein given are  reasonable and
      not  contrary  to public  policy or law. If any of the waivers or consents
      herein are  determined  to be  contrary  to any  applicable  law or public
      policy, such waivers and consents shall be effective to the maximum extent
      permitted by law.

11.12 Contribution Agreement.

      As an  inducement  to Lender to enter into the Loan  Documents and to make
the loans and extend credit to the Borrowers,  each Borrower agrees to indemnify
and hold the other  harmless  from and each  shall  have a  continuing  right of
contribution  against the other Borrowers,  if and to the extent that a Borrower
makes or is caused to make payments or contributions  (from  dispositions of its
assets or otherwise) to the repayment and  satisfaction  of the  Obligations  in
excess of the aggregate  amount of Loan proceeds  actually  received and used by
such  Borrower in its  business  (such  excess  amount  being  referred to as an
"Accommodation Payment"). If an Accommodation Payment is made by a Borrower then
the  other  Borrowers  (such  Borrowers  being  referred  to  as   "Contributing
Borrowers")  shall be  obligated  to make  contribution  to such  Borrower  (the
"Paying  Borrower") in an amount equal to (A) the product derived by multiplying
the  sum of  each  Accommodation  Payment  of  each  Borrower  by the  Allocable
Percentage  of the  Borrowers  from whom  contribution  is  sought  less (B) the
amount,  if  any,  of  the  then  outstanding   Accommodation   Payment  of  the
Contributing  Borrowers  (such last  mentioned  amount which is to be subtracted
from the aforesaid  product to be increased by any amounts  theretofore  paid by
Contributing Borrowers by way of contribution hereunder,  and to be decreased by
any  amounts  theretofore  received  by such  Contributing  Borrowers  by way of
contribution hereunder); provided, however, that a Paying Borrower's recovery of
contribution  hereunder from the other Borrowers shall be limited to that amount
paid by the  Paying  Borrower  in  excess  of its  Allocable  Percentage  of all
Accommodation  Payments then outstanding of all Borrowers.  As used herein,  the
term "Allocable  Percentage" shall mean, on any date of determination thereof, a
fraction the  denominator of which shall be equal to the number of Borrowers who
are parties to this  Agreement on such date and the  numerator of which shall be
1; provided,  however, that such percentages shall be modified in the event that
contribution from a Borrower is not possible by reason of insolvency, bankruptcy
or otherwise by reducing such Borrower's  Allocable  Percentage equitably and by
adjusting the Allocable  Percentage of the other  Borrowers  proportionately  so
that the Allocable  Percentages of all Borrowers at all times equals 100%. These
indemnification   and  contribution   obligations  shall  be  unconditional  and
continuing  obligations  of the  Borrowers  and shall not be waived,  rescinded,
modified,  limited or terminated in any way whatsoever without the prior written
consent  of  Lender,  in  its  sole  discretion.   These   indemnification   and
contribution  obligations are subordinated to the prior indefeasible  payment in
full in immediately available funds of all Obligations.

11.13 Credit Inquiries.

      Borrowers  hereby  authorize  and  permit  Lender to  respond to usual and
customary credit inquiries from third parties concerning  Borrower or any of its
Subsidiaries.

11.14 Time of Essence.

      Time is of the essence of this  Agreement,  the Other  Agreements  and the
Security Documents.

11.15 Entire Agreement.

      This  Agreement  and the other  Loan  Documents,  together  with all other
instruments,  agreements and certificates  executed by the parties in connection
therewith  or with  reference  thereto,  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.

11.16 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.

11.17 GOVERNING LAW; CONSENT TO FORUM.

      THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED AT AND SHALL BE
DEEMED TO HAVE BEEN MADE IN  GLASTONBURY,  CONNECTICUT.  THIS AGREEMENT SHALL BE
GOVERNED  BY  AND  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS  OF THE  STATE  OF
CONNECTICUT:  PROVIDED,  HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED
IN ANY JURISDICTION OTHER THAN CONNECTICUT,  THE LAWS OF SUCH JURISDICTION SHALL
GOVERN THE METHOD,  MANNER AND PROCEDURE FOR  FORECLOSURE  OF LENDER'S LIEN UPON
SUCH  COLLATERAL  AND THE  ENFORCEMENT  OF LENDER'S OTHER REMEDIES IN RESPECT OF
SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH  JURISDICTION  ARE DIFFERENT
FROM OR INCONSISTENT WITH THE LAWS OF CONNECTICUT.  AS PART OF THE CONSIDERATION
FOR NEW VALUE  RECEIVED,  AND  REGARDLESS  OF ANY PRESENT OR FUTURE  DOMICILE OR
PRINCIPAL  PLACE OF BUSINESS OF ANY  BORROWER OR LENDER,  EACH  BORROWER  HEREBY
CONSENTS  AND AGREES  THAT THE STATE OF  CONNECTICUT  SUPERIOR  COURT  JURIDICAL
DISTRICT  OF  HARTFORD/NEW  BRITAIN AT  HARTFORD,  CONNECTICUT,  OR, AT LENDER'S
OPTION,  THE UNITED  STATES  DISTRICT  COURT FOR THE  DISTRICT  OF  CONNECTICUT,
HARTFORD DIVISION,  SHALL HAVE EXCLUSIVE  JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN  BORROWERS AND LENDER PERTAINING TO THIS AGREEMENT OR
TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT.  BORROWERS  EXPRESSLY
SUBMIT  AND  CONSENT  IN  ADVANCE  TO SUCH  JURISDICTION  IN ANY  ACTION OR SUIT
COMMENCED IN ANY SUCH COURT,  AND  BORROWERS  HEREBY WAIVE ANY  OBJECTION  WHICH
BORROWERS MAY HAVE BASED UPON LACK OF PERSONAL  JURISDICTION,  IMPROPER VENUE OR
FORUM NON  CONVENIENS  AND  HEREBY  CONSENT  TO THE  GRANTING  OF SUCH  LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  BORROWERS HEREBY WAIVE
PERSONAL SERVICE OF THE SUMMONS,  COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREE  THAT  SERVICE  OF SUCH  SUMMONS,  COMPLAINT  AND OTHER
PROCESS MAY BE MADE BY  REGISTERED OR CERTIFIED  MAIL  ADDRESSED TO BORROWERS AT
THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED  UPON THE EARLIER OF ANY BORROWER'S  ACTUAL RECEIPT  THEREOF OR 3 DAYS
AFTER  DEPOSIT  IN THE U.S.  MAILS,  PROPER  POSTAGE  PREPAID.  NOTHING  IN THIS
AGREEMENT  SHALL BE DEEMED  OR  OPERATE  TO AFFECT  THE RIGHT OF LENDER TO SERVE
LEGAL  PROCESS  IN ANY  OTHER  MANNER  PERMITTED  BY  LAW,  OR TO  PRECLUDE  THE
ENFORCEMENT  BY LENDER OF ANY  JUDGMENT  OR ORDER  OBTAINED IN SUCH FORUM OR THE
TAKING  OF ANY  ACTION  UNDER  THIS  AGREEMENT  TO  ENFORCE  SAME  IN ANY  OTHER
APPROPRIATE FORUM OR JURISDICTION.

11.18 WAIVERS BY BORROWERS.

      EACH  BORROWER  WAIVES (i) THE RIGHT TO TRIAL BY JURY (WHICH LENDER HEREBY
ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING
OUT OF OR  RELATED  TO  ANY  OF  THE  LOAN  DOCUMENTS,  THE  OBLIGATIONS  OR THE
COLLATERAL:  (ii)  PRESENTMENT,  DEMAND AND PROTEST  AND NOTICE OF  PRESENTMENT,
PROTEST,  DEFAULT,  NON  PAYMENT,  MATURITY,  RELEASE,  COMPROMISE,  SETTLEMENT,
EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS,  CONTRACT RIGHTS,
DOCUMENTS,  INSTRUMENTS  CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY LENDER
ON WHICH ANY BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY  RATIFIES AND CONFIRMS
WHATEVER LENDER MAY DO IN THIS REGARD;  (iii) NOTICE PRIOR TO TAKING  POSSESSION
OR CONTROL OF THE  COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY
ANY COURT PRIOR TO ALLOWING  LENDER TO EXERCISE ANY OF LENDER'S  REMEDIES;  (iv)
THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (v) NOTICE OF
ACCEPTANCE HEREOF.  EACH BORROWER  ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A
MATERIAL  INDUCEMENT TO LENDER'S ENTERING INTO THIS AGREEMENT AND THAT LENDER IS
RELYING UPON THE FOREGOING  WAIVERS IN ITS FUTURE DEALINGS WITH BORROWERS.  EACH
BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH
ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING  CONSULTATION  WITH LEGAL COUNSEL.  IN THE EVENT OF  LITIGATION,  THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

11.19 PREJUDGEMENT REMEDY WAIVER; COMMERCIAL TRANSACTION.

      EACH BORROWER HEREBY WAIVES RIGHTS AS IT MAY HAVE TO NOTICE AND/OR HEARING
UNDER ANY  APPLICABLE  FEDERAL  OR STATE  LAWS  INCLUDING,  WITHOUT  LIMITATION,
CONNECTICUT GENERAL STATUTES SECTION 52-278A, ET SEQ. AS AMENDED,  PERTAINING TO
THE EXERCISE BY LENDER OF SUCH RIGHTS AS THE LENDER MAY HAVE, INCLUDING, BUT NOT
LIMITED TO, THE RIGHT TO SEEK PREJUDGEMENT  REMEDIES AND/OR DEPRIVE BORROWERS OF
OR AFFECT THE USE OF OR POSSESSION OR ENJOYMENT OF ANY BORROWER'S PROPERTY PRIOR
TO THE RENDITION OF A FINAL JUDGMENT AGAINST ANY BORROWER. EACH BORROWER FURTHER
WAIVES  ANY  RIGHT IT MAY HAVE TO  REQUIRE  LENDER  TO  PROVIDE  A BOND OR OTHER
SECURITY AS A  PRECONDITION  TO OR IN  CONNECTION  WITH ANY  PREJUDGMENT  REMEDY
SOUGHT BY AGENT AND  LENDER,  AND WAIVE ANY  OBJECTION  TO THE  ISSUANCE OF SUCH
PREJUDGMENT  REMEDY BASED ON ANY OFFSETS,  CLAIMS,  DEFENSES OR COUNTERCLAIMS TO
ANY ACTION BROUGHT BY ANY LENDER. EACH BORROWER HEREBY REPRESENTS, COVENANTS AND
AGREES THAT THE PROCEEDS OF THE LOANS  EVIDENCED BY THIS AGREEMENT SHALL BE USED
FOR GENERAL  COMMERCIAL  PURPOSES AND THAT SUCH LOANS  CONSTITUTE A  "COMMERCIAL
TRANSACTION" AS DEFINED BY THE STATUTES OF THE STATE OF CONNECTICUT.



<PAGE>


      IN WITNESS WHEREOF, this Agreement has been duly executed as an instrument
under seal on the day and year specified at the beginning of this Agreement.


ATTEST:                              TMCI ELECTRONICS, INC.
                                                    ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary           Name_________________________________
                                        Title__________________________________
[CORPORATE SEAL]

ATTEST:                              TOUCHE MANUFACTURING COMPANY, INC.
                                                                    ("Borrower")

                                     By ______________________________________
______________________________          Name_________________________________
Secretary/Assistant Secretary           Title _________________________________



ATTEST:                              TOUCHE ELECTRONICS, INC.
                                                     ("Borrower")

                                     By ______________________________________
______________________________          Name_________________________________
Secretary/Assistant Secretary           Title _________________________________


ATTEST:                              ENTERPRISE INDUSTRIES, INC.
                                                     ("Borrower")

                                     By ______________________________________
______________________________          Name_________________________________
Secretary/Assistant Secretary           Title _________________________________


ATTEST:                              TRINITY ELECTRONICS, INC.
                                                       ("Borrower")

                                     By ______________________________________
______________________________          Name_________________________________
Secretary/Assistant Secretary           Title _________________________________


                                        Accepted in Glastonbury, Connecticut

                                     FLEET CAPITAL CORPORATION
                                                     (Lender)

                                     By ______________________________________
                                          Robert M. Dailey,
                                          Vice President


<PAGE>


                                     -14-
                                   APPENDIX A
                               GENERAL DEFINITIONS
      When used in the Loan and Security Agreement dated as of March 2, 1998, by
and between Fleet  Capital  Corporation  and TMCI,  Inc.,  Touche  Manufacturing
Company, Inc., Touche Electronics, Inc., Enterprise Industries, Inc. and Trinity
Electronics,  Inc. the following terms shall have the following  meanings (terms
defined in the  singular  to have the same  meaning  when used in the plural and
vice versa):

      Account  Debtor - any Person who is or may  become  obligated  under or on
account of an Account.

      Accounts - all accounts,  contract rights, chattel paper,  instruments and
documents,  whether now owned or hereafter  created or acquired by a Borrower or
in which a Borrower now has or hereafter acquired any interest.

      Adjusted Net Earnings From Operations - with respect to any fiscal period,
means the net  earnings  (or loss)  after  provision  for income  taxes for such
fiscal period of Borrower,  as reflected on the financial statement of Borrowers
supplied to Lender pursuant to subsection 8.1.3 of the Agreement, but excluding:

                         any gain or loss arising from the sale of capital
         assets;

                         any gain arising from any write-up of assets;

                         earnings of any Subsidiary of any Borrower accrued
         prior to the date it became a Subsidiary;

                         earnings  of any  corporation,  substantially  all  the
         assets  of which  have been  acquired  in any  manner by any  Borrower,
         realized by such corporation prior to the date of such acquisition;

                         net  earnings  of any  business  entity  (other  than a
         Subsidiary  of a  Borrower)  in which  any  Borrower  has an  ownership
         interest  unless such net earnings shall have actually been received by
         a Borrower in the form of cash distributions;

                         any portion of the net earnings of any Subsidiary of
         a Borrower which for any reason is unavailable for payment of
         dividends to any Borrower;

                         the  earnings  of any Person to which any assets of any
         Borrower  shall have been sold,  transferred  of  disposed  of, or into
         which  a  Borrower   shall  have  merged,   or  been  a  party  to  any
         consolidation  or other  form of  reorganization,  prior to the date of
         such transaction;

                         any gain arising from the acquisition of any
         Securities of any Borrower; and

                         any gain arising from extraordinary or non-recurring
         items.

      Adjusted  Tangible Assets - all assets except:  (i) any surplus  resulting
from any  write-up of assets  subsequent  to December 31,  1996;  (ii)  deferred
assets,   other  than  prepaid  insurance  and  prepaid  taxes;  (iii)  patents,
copyrights,  trademarks,  trade names,  non-compete  agreements,  franchises and
other  similar  intangibles;  (iv)  goodwill,  including  any  amounts,  however
designated  on a  Consolidated  balance  sheet of a Person or its  Subsidiaries,
representing  the excess of the purchase price paid for assets or stock over the
value assigned thereto on the books of such Person; (v) Restricted  Investments;
(vi) unamortized  debt discount and expense;  (vii) assets located and notes and
receivables  due from  obligors  outside of the United  States of  America;  and
(viii) Accounts, notes and other receivables due from Affiliates or employees.

      Adjusted Tangible Net Worth - at any date means a sum equal to:

                         the   net   book   value   (after   deducting   related
         depreciation,  obsolescence,  amortization, valuation, and other proper
         reserves)  at which the Adjusted  Tangible  Assets of a Person would be
         shown on a balance sheet at such date in accordance with GAAP, minus

                               the amount at which such Person's liabilities
         (other than capital  stock and surplus)  would be shown on such balance
         sheet in  accordance  with  GAAP,  and  including  as  liabilities  all
         reserves for contingencies and other potential liabilities.

      Affiliate - a Person  (other  than a  Subsidiary):  (i) which  directly or
indirectly through one or more intermediaries  controls, or is controlled by, or
is under common control with, a Person; (ii) which beneficially owns or holds 5%
or more of any class of the Voting Stock of a Person; or (iii) 5% or more of the
Voting Stock (or in the case of a Person which is not a corporation,  5% or more
of the equity interest) of which is beneficially  owned or held by a Person or a
Subsidiary of a Person.

      Agreement  - the Loan and  Security  Agreement  referred  to in the  first
sentence of this Appendix A, all Exhibits thereto and this Appendix A.

      Availability - the amount of money which  Borrowers are entitled to borrow
from time to time as Revolving  Credit Loans,  such amount being the  difference
derived  when the sum of the  principal  amount of  Revolving  Credit Loans then
outstanding (including any amounts which Lender may have paid for the account of
Borrowers  pursuant  to any of the  Loan  Documents  and  which  have  not  been
reimbursed  by  Borrowers)  and the LC Amount is  subtracted  from the Borrowing
Base. If the amount  outstanding is equal to or greater than the Borrowing Base,
Availability is 0.

      Average  Loan Balance - for any month,  the amount  obtained by adding the
unpaid balance of the Revolving Credit Loans, Term Loans, Equipment Loans and LC
Amounts at the end of each day for each day during the  applicable  month and by
dividing such sum by the number of the days in such month.

      Bank - Fleet National Bank.

      Borrowing Base - as at any date of determination  thereof, an amount equal
to the lesser of:

                         $25,000,000 minus the unpaid principal balances of
         the Term Loans and the Equipment Loans at such date; or

                         an amount equal to:

                        (a)   85% of the net amount of Eligible Accounts
         outstanding at such date;

                                      PLUS

                        (b) the  lesser  of (1)  $6,000,000  or (2) 55%,  of the
         value of Eligible Inventory at such date calculated on the basis of the
         lower of cost or market  with the cost of raw  materials  and  finished
         goods calculated on a first-in, first-out basis.

                        For purposes hereof, the net amount of Eligible Accounts
         at any time shall be the face amount of such Eligible Accounts less any
         and all returns, rebates,  discounts (which may, at Lender's option, be
         calculated on shortest terms),  credits,  allowances or excise taxes of
         any nature at any time  issued,  owing,  claimed  by  Account  Debtors,
         granted,  outstanding  or payable in  connection  with such Accounts at
         such time.

      Business Day - any day excluding  Saturday,  Sunday and any day which is a
legal  holiday  under  the laws of the  State  of  Connecticut  or the  State of
California or is a day on which banking  institutions  located in either of such
states are closed.

      Capital  Expenditures - expenditures made or liabilities  incurred for the
acquisition of any fixed assets or improvements,  replacements, substitutions or
additions thereto which have a useful life of more than one year,  including the
total principal portion of Capitalized Lease Obligations.

      Capitalized Lease Obligation - any Indebtedness represented by obligations
under a  lease  that is  required  to be  capitalized  for  financial  reporting
purposes in accordance with GAAP.

      Cash Flow - for any period,  means  TMCI's  Consolidated  (i) Adjusted Net
Earnings  from  Operations  for  such  period,   plus  (ii)   depreciation   and
amortization   expenses  for  such  period,   less  (iii)   unfinanced   Capital
Expenditures  for such period,  less (iv) current  maturities and prepayments of
long  term  Indebtedness  that  occur  during  such  period  and  less  (v)  all
Distributions  made during such period,  all as determined  in  accordance  with
GAAP.

      Change in Control - shall be deemed to have occurred at such time as (i) a
"person" or "group"  (within the  meaning of Section  13(d) and  14(d)(2) of the
Securities  Exchange Act of 1934),  becomes the beneficial  owner (as defined in
Rule 13d-3 under the Securities  Exchange Act of 1934),  directly or indirectly,
of more than fifty  (50%)  percent of the total  voting  power of all classes of
stock the outstanding of TMCI entitled to vote in the election of directors,  or
(ii) a change in the Board of Directors of TMCI occurs in which  individuals who
constituted  the Board of  Directors at the  beginning  of the  two-year  period
immediately  preceding  such  change  (together  with any other  director  whose
nomination for election by the shareholders of TMCI was approved by a vote of at
least  two-thirds  of the  directors  at the  beginning  of such period or whose
nomination  and election  was  previously  so approved)  cease for any reason to
constitute a majority of the directors then in office.

      Closing  Date - the  date on  which  all of the  conditions  precedent  in
Section 9 of the  Agreement  are  satisfied  and the initial Loan is made or the
initial Letter of Credit or LC Guaranty is issued under the Agreement.

      Code - the Uniform Commercial Code as adopted and in force in the State of
Connecticut, as from time to time in effect.

      Collateral - all of the Property  and  interests in Property  described in
Section 5 of the  Agreement,  and all other  Property and  interests in Property
that  now  or  hereafter  secure  the  payment  and  performance  of  any of the
Obligations.

      Consolidated - the  consolidation  in accordance with GAAP of the accounts
or other items as to which such term applies.

      Current  Assets - at any date means the amount at which all of the current
assets of a Person  would be properly  classified  as current  assets shown on a
balance sheet at such date in accordance with GAAP, except that amounts due from
Affiliates and investments in Affiliates shall be excluded therefrom.

      Current  Liabilities  - at any date  means the  amount at which all of the
current  liabilities  of a  Person  would  be  properly  classified  as  current
liabilities on a balance sheet at such date in accordance  with GAAP,  excluding
the Loans and current maturities of any long-term Indebtedness.

      Default - an event or condition the  occurrence  of which would,  with the
lapse of time or the giving of notice, or both, become an Event of Default.

      Default Rate - as defined in subsection 2.1.2 of the Agreement.

      Distribution - in respect of any corporation  means and includes:  (i) the
payment  of any  dividends  or  other  distributions  on  capital  stock  of the
corporation  (except  distributions  in such stock) and (ii) the  redemption  or
acquisition of Securities unless made contemporaneously from the net proceeds of
the sale of Securities.

      Dominion  Account - a special  account of Lender  established by Borrowers
pursuant to the  Agreement at a bank selected by  Borrowers,  but  acceptable to
Lender in its reasonable  discretion,  and over which Lender shall have sole and
exclusive access and control for withdrawal purposes.

      EBIT - with respect to any fiscal period,  the sum of TMCI's  Consolidated
net  earnings  (or loss)  before  interest  expense and taxes for said period as
determined in accordance with GAAP.

      Eligible  Account  - an  Account  arising  in  the  ordinary  course  of a
Borrower's  business  from  the sale of goods or  rendition  of  services  which
Lender,  in its reasonable  credit  judgment,  deems to be an Eligible  Account.
Without  limiting  the  generality  of the  foregoing,  no  Account  shall be an
Eligible Account if:

                         it arises out of a sale made by a Borrower to a
         Borrower or a Subsidiary or an Affiliate of a Borrower or to a
         Person controlled by an Affiliate of a Borrower; or

                         it is unpaid for more than 60 days after the
         original due date shown on the invoice; or

                         it is due or unpaid more than 90 days after the
         original invoice date; or

                         50% or more of the Accounts from the Account Debtor are
         not deemed Eligible Accounts hereunder; or

                         the total unpaid  Accounts of the Account Debtor exceed
         20% of the net amount of all Eligible  Accounts (or, in the case of LAM
         Research,  30% of the net  amount  of all  Eligible  Accounts),  to the
         extent of such excess; or

                         any covenant, representation or warranty contained
         in the Agreement with respect to such Account has been breached; or

                         the  Account  Debtor is also a  Borrower's  creditor or
         supplier,  or the Account Debtor has disputed liability with respect to
         such Account,  or the Account Debtor has made any claim with respect to
         any other  Account due from such  Account  Debtor to  Borrower,  or the
         Account  otherwise  is or may become  subject to any right of setoff by
         the Account Debtor; or

                         the Account Debtor has commenced a voluntary case under
         the federal  bankruptcy laws, as now constituted or hereafter  amended,
         or made an  assignment  for the  benefit of  creditors,  or a decree or
         order for relief has been entered by a court having jurisdiction in the
         premises in respect of the Account Debtor in an involuntary  case under
         the federal  bankruptcy laws, as now constituted or hereafter  amended,
         or any other petition or other application for relief under the federal
         bankruptcy  laws has been filed against the Account  Debtor,  or if the
         Account Debtor has failed, suspended business, ceased to be Solvent, or
         consented to or suffered a receiver,  trustee,  liquidator or custodian
         to be  appointed  for it or for  all or a  significant  portion  of its
         assets or affairs; or

                         it arises from a sale to an Account  Debtor outside the
         United  States,  unless  the sale is on letter of credit,  guaranty  or
         acceptance  terms,  in each  case  acceptable  to  Lender  in its  sole
         discretion; or

                         it  arises  from a  sale  to the  Account  Debtor  on a
         bill-and-hold,   guaranteed  sale,  sale-or-return,   sale-on-approval,
         consignment or any other repurchase or return basis; or

                         the Account  Debtor is the United  States of America or
         any department,  agency or instrumentality thereof, unless the Borrower
         that  generated  such  Account  assigns  its right to  payment  of such
         Account to Lender, in a manner  satisfactory to Lender, so as to comply
         with the Assignment of Claims Act of 1940 (31 U.S.C. ss.203 et seq., as
         amended); or

                         the Account is subject to a Lien other than a
         Permitted Lien; or

                         the goods  giving  rise to such  Account  have not been
         delivered to and accepted by the Account Debtor or the services  giving
         rise to such  Account  have not been  performed  by the  Borrower  that
         generated  such  Account  and  accepted  by the  Account  Debtor or the
         Account otherwise does not represent a final sale; or

                         the Account is evidenced by chattel paper or an
         instrument of any kind, or has been reduced to judgment; or

                         Any  Borrower has made any  agreement  with the Account
         Debtor for any deduction therefrom,  except for discounts or allowances
         which are made in the ordinary  course of business  for prompt  payment
         and which  discounts or allowances are reflected in the  calculation of
         the face value of each invoice related to such Account; or

                         Any  Borrower  has made an  agreement  with the Account
         Debtor to extend the time of payment thereof.

      Eligible Equipment - shall mean Equipment acquired by a Borrower after the
date  hereof,  which  is in new and  unused  condition,  located  at  Borrowers'
premises  and  reasonably   acceptable  to  Lender  for  lending  purposes.   In
determining  such  acceptability  Lender  may,  but need  not,  rely on  reports
furnished to Lender by  Borrowers,  but reliance  thereon by Lender from time to
time  shall  not be  deemed  to limit  Lender's  right to  revise  standards  of
eligibility  at any time.  Without  limiting the  generality  of the  foregoing,
Eligibility  Equipment  shall not include (a) Equipment at the premises of third
parties or subject to a security interest or lien in favor of any third parties,
(b) Equipment which is not subject to Lender's perfected security interest,  (c)
fixtures,  (d)  defective  Equipment  (e)  Equipment  not used or  usable in the
ordinary  course of a  Borrower's  business as  presently  conducted;  provided,
however,  any Equipment which would  otherwise be deemed  Eligible  Equipment at
locations  which are not owned and  operated by  Borrower  may  nevertheless  be
considered  Eligible  Equipment  if Lender  shall have  received an agreement in
writing,  in form and substance  satisfactory  to Lender,  from the owner and/or
operator  of such  location,  as the case may be,  pursuant  to which such owner
and/or operator, if required by Lender: (I) acknowledges the first priority lien
of Lender on such Equipment,  (ii) agrees to waive any and all claims such owner
and/or  operator may, at any time,  have against such Equipment and (iii) grants
to Lender the right to enter and  remain on the  premises  in order to  exercise
Lender's rights and remedies on terms acceptable to Lender.  Any Equipment which
Lender  determines to be ineligible or unacceptable  for lending  purposes shall
nevertheless be and remain at all times part of the Collateral.

      Eligible  Equipment  Cost - shall mean the price  paid by a  Borrower  for
Eligible Equipment, including software that is an integral part thereof and that
is sold as part of the purchase  price and not an add-on,  but excluding any and
all "soft  costs",  as  reasonably  determined  by  Lender,  including,  without
limitation, shipping, engineering, labor, installation, setup, testing and other
software  costs and expenses and further  excluding  all  commissions,  fees and
sales, excise and other taxes.

      Eligible  Inventory - such  Inventory of Borrowers  (other than  packaging
materials and supplies) which Lender, in its reasonable  credit judgment,  deems
to be Eligible Inventory.  Without limiting the generality of the foregoing,  no
Inventory shall be Eligible Inventory if:

                         it is not raw materials or finished goods that is,
         in Lender's opinion, readily marketable in its current form; or

                         it is not in good, new and saleable condition; or

                         it is slow-moving, obsolete or unmerchantable; or

                         it does not meet all standards imposed by any
         governmental agency or authority; or

                         it does not conform in all respects to the
         warranties and representations set forth in the Agreement,

                         it is  not  at  all  times  subject  to  Lender's  duly
         perfected,  first priority security interest and no other Lien except a
         Permitted Lien; or

                         it is not situated at a location in compliance with
         the Agreement or is in transit.

      Environmental Claim shall mean, with respect to any Person, any written or
oral notice, claim, demand or other communication  (collectively,  a "claim") by
any other Person alleging or asserting such Person's liability for investigatory
costs, cleanup costs,  governmental response costs, damages to natural resources
or other Property,  personal injuries,  fines or penalties arising out of, based
on or resulting from (a) the presence,  or Release into the environment,  of any
Hazardous Material at any location,  whether or not owned by such Person, or (b)
circumstances forming the basis of any violation,  or alleged violation,  of any
Environmental  Law.  The  term  "Environmental  Claim"  shall  include,  without
limitation,  any claim by any governmental  authority for enforcement,  cleanup,
removal,  response,  remedial  or  other  actions  or  damages  pursuant  to any
applicable  Environmental Law, and any claim by any third party seeking damages,
contribution,  indemnification, cost recovery, compensation or injunctive relief
resulting  from the  presence of  Hazardous  Materials  or arising  from alleged
injury or threat of injury to the environment.

      Environmental  Laws shall  mean any and all  present  and future  Federal,
state, local and foreign laws, rules or regulations,  and any orders or decrees,
in each case as now or  hereafter  in  effect,  relating  to the  regulation  or
protection  of  the  environment  or  to  emissions,   discharges,  releases  or
threatened releases of pollutants, contaminants or toxic or hazardous substances
or wastes into the indoor or outdoor environment, including, without limitation,
ambient air, soil,  surface water,  ground water,  wetlands,  land or subsurface
strata, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,  contaminants
or toxic or hazardous substances or wastes.

      Equipment - all  machinery,  apparatus,  equipment,  fittings,  furniture,
fixtures,  motor  vehicles  and other  tangible  personal  Property  (other than
Inventory) of every kind and description used in Borrower's  operations or owned
by Borrower or in which Borrower has an interest, whether now owned or hereafter
acquired  by Borrower  and  wherever  located,  and all parts,  accessories  and
special tools and all increases and  accessions  thereto and  substitutions  and
replacements therefor.

      Equipment Loans - the Loans to be made by Lender to Borrowers  pursuant to
subsection 1.2.2 of the Agreement.

      Equipment Note - the Equipment Promissory Note to be executed by Borrowers
in favor of Lender as provided in Section 2.2(B) of the  Agreement,  which shall
be in the form of Exhibit A-3 to the Agreement.

      ERISA - the Employee  Retirement  Income Security Act of 1974, as amended,
and all rules and regulations from time to time promulgated thereunder.

      Event of Default - as defined in Section 10.1 of the Agreement.

      GAAP -  generally  accepted  account  principles  in the United  States of
America in effect from time to time.

      General  Intangibles - all personal  property of each Borrower  (including
things  in  action)  other  than  goods,  Accounts,  chattel  paper,  documents,
instruments and money, whether now owned or hereafter created or acquired by any
Borrower.

      Indebtedness - as applied to a Person means, without duplication

                         all  items  which  in  accordance  with  GAAP  would be
         included in  determining  total  liabilities  as shown on the liability
         side of a  balance  sheet  of such  Person  as at the  date as of which
         Indebtedness  is  to  be  determined,  including,  without  limitation,
         Capitalized Lease Obligations,

                         all obligations of other Persons which such Person
         has guaranteed,

                         all reimbursement obligations in connection with
         letters of credit or letter of credit guaranties issued for the
         account of such Person, and

                         in the case of Borrower (without duplication), the
         Obligations.

      Hazardous  Material  shall  mean,  collectively,   (a)  any  petroleum  or
petroleum  products,   explosives,   radioactive   materials,   asbestos,   urea
formaldehyde  foam insulation,  and transformers or other equipment that contain
polychlorinated  biphenyls  ("PCB's") in concentrations that are regulated under
the Toxic Substances  Control Act, as amended,  or any other  Environmental Law,
(b) any  chemicals or other  materials or  substances  that are now or hereafter
become  defined as or  included in the  definition  of  "hazardous  substances",
"hazardous  wastes",   "hazardous  materials",   "extremely  hazardous  wastes",
"restricted   hazardous  wastes",   "toxic   substances",   "toxic  pollutants",
"contaminants",  "pollutants" or words of similar import under any Environmental
Law and (c) any other chemical or other material or substance, exposure to which
is now or hereafter  prohibited,  limited or regulated  under any  Environmental
Law.

      Inventory  - all of  each  Borrower's  inventory,  whether  now  owned  or
hereafter acquired including, but not limited to, all goods intended for sale or
lease by Borrower, or for display or demonstration; all work in process; all raw
materials and other materials and supplies of every nature and description  used
or which might be used in connection with the  manufacture,  printing,  packing,
shipping, advertising, selling, leasing or furnishing of such goods or otherwise
used or  consumed in  Borrower's  business;  and all  documents  evidencing  and
General  Intangibles  relating  to any of the  foregoing,  whether  now owned or
hereafter acquired by Borrower.

      Investment   Property  -  all  investment   property,   financial  assets,
certificated and  uncertificated  securities,  securities  accounts,  securities
entitlements,  commodities  contracts and commodities accounts of the Borrowers,
whether now owned or hereafter acquired or created by Borrowers.

      LC Amount - at any time, the aggregate  undrawn face amount of all Letters
of Credit and LC Guaranties then outstanding.

      LC Guaranty - any guaranty  pursuant to which  Lender or any  Affiliate of
Lender  shall  guaranty  the  payment  or  performance  by  a  Borrower  of  its
reimbursement obligation under any letter of credit.

      Letter  of  Credit - any  letter  of  credit  issued  by  Lender or any of
Lender's Affiliates for the account of Borrower.

      LIBOR Loans - any portion of the Revolving  Credit Loans, the Term Loan or
Equipment  Loans on which  Borrowers  elect  pursuant  to Section  3.1.1 of this
Agreement,  to pay interest during the LIBOR Interest Period applicable  thereto
at a fixed rate of interest based on the LIBOR Rate.

      LIBOR  Interest  Period - with  respect  to each  LIBOR  Loan,  the period
commencing on (and  including)  the date that such LIBOR Loan is made and ending
on (but  excluding) the  numerically  corresponding  date in the first,  second,
third or sixth  month  thereafter,  as  Borrowers  may  elect in the  applicable
request for such LIBOR Loan, provided that:

      (i)  any  LIBOR  Interest  Period  (other  than a  LIBOR  Interest  period
determined pursuant to paragraph (iii) below) which would otherwise end on a day
which is not a Business  Day shall be extended to the next  succeeding  Business
Day unless such Business Day falls in another calendar month, in which case such
LIBOR Interest period shall end on the next preceding Business Day.

      (ii) any LIBOR Interest  Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically  corresponding day
in the appropriate  subsequent calendar month, in which case such LIBOR Interest
period  shall  end on  the  next  preceding  Business  Day  of  the  appropriate
subsequent calendar month, and

      (iii) any LIBOR  Interest  Period which begins  before the last day of the
Original Term or any Renewal Term, as applicable,  and would otherwise end after
the last day of the Original Term or such Renewal Term shall end on the last day
of the Original Term or such Renewal Term.

      LIBOR Rate - with respect to any LIBOR Interest Period, the rate per annum
determined  by Lender on the basis of the  offered  rate for  deposits in United
States  dollars  in  the  London  Interbank  Market  of an  amount  equal  to or
comparable to the amount of the LIBOR Loan to which such LIBOR  Interest  Period
relates  offered for a term  comparable to such LIBOR Interest Period as of 1:00
p.m.  Boston,  Massachusetts  time two (2) Business Days period to the first day
for such LIBOR  Interest  Period.  The LIBOR Rate shall be  adjusted to the next
higher 1/8th of 1 percent equal to the quotient of (a) the rate set forth in the
previous sentence,  divided by (b) a number equal to 1.00 minus the aggregate of
the rates  (expressed as a decimal) of the reserve  requirements  current on the
day that it is two Business  Days prior to the  beginning of the LIBOR  Interest
Period under any regulation  promulgated by the Board of Governor of the Federal
Reserve System (or any other  governmental  authority having  jurisdiction  over
Lender)  as in  effect  from time to time,  dealing  with  reserve  requirements
prescribed for LIBOR funding including any reserve  requirements with respect to
"Eurocurrency"  liabilities having a term  approximately  equal to or comparable
with the LIBOR Interest  Period under  Regulation D of the Board of Governors of
the Federal Reserve System.

      Lien - any interest in Property securing an obligation owed to, or a claim
by, a Person  other than the owner of the  Property,  whether  such  interest is
based on common law,  statute or  contract.  The term "Lien"  shall also include
reservations,  exceptions, encroachments,  easements, rights-of-way,  covenants,
conditions,  restrictions,  leases and other title  exceptions and  encumbrances
affecting Property.  For the purpose of the Agreement,  Borrower shall be deemed
to be the owner of any  Property  which it has  acquired  or holds  subject to a
conditional sale agreement or other  arrangement  pursuant to which title to the
Property  has been  retained  by or vested in some  other  Person  for  security
purposes.

      Loan  Account  - the loan  account  established  on the  books  of  Lender
pursuant to Section 3.6 of the Agreement.

      Loan  Documents - the Agreement,  the Other  Agreements and the Security
Documents.

      Loans - all loans and advances of any kind made by Lender  pursuant to the
Agreement.

      Money Borrowed - means (i) Indebtedness  arising from the lending of money
by any Person to a Borrower; (ii) Indebtedness,  whether or not in any such case
arising  from the  lending  by any Person of money to a  Borrower,  (A) which is
represented  by notes payable or drafts  accepted  that  evidence  extensions of
credit, (B) which constitutes obligations evidenced by bonds, debentures,  notes
or similar instruments,  or (C) upon which interest charges are customarily paid
(other than  accounts  payable) or that was issued or assumed as full or partial
payment for Property;  (iii)  Indebtedness  that constitutes a Capitalized Lease
Obligation;  (iv) reimbursement obligations with respect to letters of credit or
guaranties  of letters of credit and (v)  Indebtedness  of a Borrower  under any
guaranty of obligations  that would  constitute  Indebtedness for Money Borrowed
under clauses (i) through (iii) hereof, if owed directly by a Borrower.

      Multiemployer  Plan - has the meaning set forth in Section 4001(a)(3) of
      -------------------
ERISA.

      Obligations  - all  Loans  and all  other  advances,  debts,  liabilities,
obligations,  covenants and duties,  together with all interest,  fees and other
charges thereon,  owing,  arising,  due or payable from any and all Borrowers to
Lender of any kind or nature, present or future, whether or not evidenced by any
note,  guaranty or other instrument,  whether arising under the Agreement or any
of the other Loan Documents or otherwise  whether direct or indirect  (including
those acquired by assignment), absolute or contingent, primary or secondary, due
or to become due, now existing or hereafter arising and however acquired.

      Original Term - as defined in Section 4.1 of the Agreement.

      Other  Agreements  - any and all  agreements,  instruments  and  documents
(other  than the  Agreement  and the  Security  Documents),  heretofore,  now or
hereafter  executed by Borrower,  any  Subsidiary of Borrower or any other third
party and delivered to Lender in respect of the transactions contemplated by the
Agreement.

      Overadvance  - the  amount,  if any,  by which the  outstanding  principal
amount of Revolving Credit Loans plus the LC Amount exceeds the Borrowing Base.

      Permitted Liens - any Lien of a kind specified in subsection  8.2.5 of the
Agreement.

      Permitted  Purchase Money  Indebtedness - Purchase Money  Indebtedness  of
Borrowers  incurred  after the date hereof which is secured by a Purchase  Money
Lien and which,  when  aggregated  with the  principal  amount of all other such
Indebtedness  and  Capitalized  Lease  Obligations  of  Borrowers  at  the  time
outstanding,  does not exceed  $1,800,000.  For the purposes of this definition,
the  principal  amount  of  any  Purchase  Money   Indebtedness   consisting  of
capitalized leases shall be computed as a Capitalized Lease Obligation.

      Person  -  an  individual,  partnership,  corporation,  limited  liability
company,  joint stock company,  land trust,  business trust,  or  unincorporated
organization, or a government or agency or political subdivision thereof.
      Plan - an employee benefit plan now or hereafter  maintained for employees
of Borrower that is covered by Title IV of ERISA.

      Projections - Borrowers'  forecasted  Consolidated and  consolidating  (a)
balance sheets,  (b) profit and loss statements,  (c) cash flow statements,  and
(d)  capitalization   statements,  all  prepared  on  a  consistent  basis  with
Borrowers' historical financial statements, together with appropriate supporting
details and a statement of underlying assumptions.

      Prime Rate - the rate of interest announced or quoted by Bank from time to
time as its prime  rate for  commercial  loans,  whether or not such rate is the
lowest rate charged by Bank to its most preferred borrowers;  and, if such prime
rate for commercial  loans is discontinued  by Bank as a standard,  a comparable
reference  rate  designated by Bank as a substitute  therefor shall be the Prime
Rate.

      Property - any  interest in any kind of property or asset,  whether  real,
personal or mixed, or tangible or intangible.

      Purchase Documents - the agreements,  documents and instruments relating
to the  acquisitions of Trinity  Electronics,  Inc.,  First Sources,  Inc. and
D.C. Electronics, Inc.

      Purchase Money  Indebtedness - means and includes (i) Indebtedness  (other
than the  Obligations)  for the payment of all or any part of the purchase price
of any fixed assets, (ii) any Indebtedness (other than the Obligations) incurred
at the time of or within 10 days prior to or after the  acquisition of any fixed
assets  for the  purpose  of  financing  all or any part of the  purchase  price
thereof, and (iii) any renewals, extensions or refinancings thereof, but not any
increases in the principal amounts thereof outstanding at the time.

      Purchase  Money Lien - a Lien upon fixed  assets  which  secures  Purchase
Money Indebtedness,  but only if such Lien shall at all times be confined solely
to the fixed  assets  the  purchase  price of which  was  financed  through  the
incurrence of the Purchase Money Indebtedness secured by such Lien.

      Release  shall  mean  any  release,  spill,  emission,  leaking,  pumping,
injection, deposit, disposal,  discharge,  dispersal, leaching or migration into
the indoor or outdoor environment,  including,  without limitation, the movement
of Hazardous  Materials through ambient air, soil, surface water,  ground water,
wetlands, land or subsurface strata.

      Rentals - as defined in subsection 8.2.12 of the Agreement.

      Renewal Terms - as defined in Section 4.1 of the Agreement.

      Reportable  Event - any of the events  set forth in  Section  4043(b) of
      -----------------
ERISA.

      Restricted  Investment  - any  investment  made in cash or by  delivery of
Property to any Person,  whether by acquisition of stock,  Indebtedness or other
obligation  or  Security,  or by  loan,  advance  or  capital  contribution,  or
otherwise, or in any Property except the following:

                         investments in one or more Subsidiaries of Borrowers
         to the extent existing on the Closing Date;

                         Property to be used in the ordinary course of
         business;

                         Current  Assets  arising  from the  sale of  goods  and
         services in the  ordinary  course of business  of  Borrowers  and their
         Subsidiaries;

                         investments in direct  obligations of the United States
         of America,  or any agency  thereof or  obligations  guaranteed  by the
         United States of America,  provided that such obligations mature within
         one year from the date of acquisition thereof;

                         investments in certificates of deposit  maturing within
         one year from the date of acquisition issued by a bank or trust company
         organized  under the laws of the  United  States  or any state  thereof
         having  capital  surplus and  undivided  profits  aggregating  at least
         $100,000,000; and

                         investments  in  commercial  paper  given  the  highest
         rating by a national  credit  rating  agency and maturing not more than
         270 days from the date of creation thereof.

      Revolving  Credit  Loan - a Loan made by Lender as  provided  in Section
      -----------------------
2.1 of the Agreement.

      Schedule of Accounts - as defined in subsection 6.4.1 of the Agreement.

      Security  -  shall  have  the  same  meaning  as in  Section  2(1)  of the
Securities Act of 1933, as amended.

      Security  Documents - the Pledge and Security  Agreement,  Patent Security
Agreement, Trademark Security Agreement and all other instruments and agreements
now or at any time hereafter securing the whole or any part of the Obligations.

      Solvent - as to any  Person,  such  Person  (i) owns  Property  whose fair
saleable  value 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.

      Subordinated  Debt - Indebtedness  of Borrower that is subordinated to the
Obligations in a manner satisfactory to Lender.

      Subordination  Agreement - a Subordination Agreement to entered into among
Borrower,  Lender and the  holders of  Subordinated  Debt in form and  substance
satisfactory to Lender.

      Subsidiary  -  any  corporation  of  which  a  Person  owns,  directly  or
indirectly through one or more intermediaries, more than 50% of the Voting Stock
at the time of determination.

      Term Loan - A - the loan described in Section 1.2.1 of the Agreement.

      Term Loan - B - the Loan described in subsection 1.2.2 of the Agreement.

      Term Notes- the Secured  Promissory Notes to be executed by Borrower on or
about the  Closing  Date in favor of Lender to evidence  the Term  Loans,  which
shall be in the form of Exhibit A-1 and Exhibit A-2 to the Agreement.

      Total Credit Facility - $25,000,000.

      Voting Stock -  Securities  of any class or classes of a  corporation  the
holders of which are ordinarily,  in the absence of  contingencies,  entitled to
elect a majority  of the  corporate  directors  (or Persons  performing  similar
functions).

      Working  Capital  -  at  any  date  means  Current  Assets  minus  Current
Liabilities.

      Other Terms.  All other terms  contained in the Agreement shall have, when
the context so  indicates,  the meanings  provided for by the Code to the extent
the same are used or defined therein.

      Certain  Matters  of  Construction.   The  terms  "herein",  "hereof"  and
"hereunder"  and other words of similar import refer to the Agreement as a whole
and not to any particular  section,  paragraph or subdivision.  Any pronoun used
shall be deemed to cover all genders.  The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation  of  the  Agreement.  All  references  to  statutes  and  related
regulations shall include any amendments of same and any successor  statutes and
regulations.  All references to any of the Loan Documents  shall include any and
all modifications thereto and any and all extensions or renewals thereof.



<PAGE>



                                LIST OF EXHIBITS

Exhibit A-1     Term Note - A
Exhibit A-2     Term Note - B
Exhibit A-2     Equipment Note
Exhibit B       Borrower's and each Subsidiary's Business Locations
Exhibit C       Jurisdictions in which Borrower and each Subsidiary is
                Authorized to do Business
Exhibit D       Capital Structure of Borrower
Exhibit E       Corporate Names
Exhibit F       Tax Identification Numbers of Subsidiaries
Exhibit G       Patents, Trademarks, Copyrights and Licenses
Exhibit H       Contracts Restricting Borrower's Right to Incur Debts
Exhibit I       Litigation
Exhibit J       Capitalized Leases
Exhibit K       Operating Leases
Exhibit L       Pension Plans
Exhibit M       Labor Contracts
Exhibit N       Compliance Certificate
Exhibit O       Permitted Liens
Exhibit P       Environmental
Exhibit Q       Broker's Fee
Exhibit R       Options



<PAGE>


                                       A-3
                            SECURED PROMISSORY NOTE-A
$4,700,000.00
March 2, 1998
                                                      Glastonbury, Connecticut

      FOR VALUE RECEIVED, each of the undersigned (hereinafter collectively, the
"Borrowers"), hereby jointly and severally promises to pay to the order of FLEET
CAPITAL CORPORATION,  a Rhode Island corporation (hereinafter "Lender"), in such
coin or currency of the United  States which shall be legal tender in payment of
all debts and dues,  public and private,  at the time of payment,  the principal
sum of  $4,700,000.00,  together with interest from and after the date hereof on
the unpaid principal  balance  outstanding at a variable rate per annum equal to
 .50% above the Prime Rate.

      This Secured  Promissory  Note (the "Note") is the Term Note-A referred to
in, and is issued pursuant to, that certain Loan and Security  Agreement between
Borrowers and Lender dated the date hereof (hereinafter, as amended from time to
time, the "Loan Agreement"), and is entitled to all of the benefits and security
of the Loan  Agreement.  All of the terms,  covenants and conditions of the Loan
Agreement and the Security Documents are hereby made a part of this Note and are
deemed  incorporated  herein in full. All capitalized terms used herein,  unless
otherwise specifically defined in this Note, shall have the meanings ascribed to
them in the Loan Agreement.

      The rate of interest in effect  hereunder shall increase or decrease by an
amount equal to any increase or decrease in the Prime Rate,  effective as of the
opening of business  on the date that any such change in the Prime Rate  occurs.
Interest  shall be  computed  in the  manner  provided  in Section 2 of the Loan
Agreement.  The interest  rate margin of .50% above the Prime Rate is subject to
reduction in the manner  provided in Section  2.1.4 of the Loan  Agreement  and,
under the circumstances set forth in Section 2.1.5 of the Loan Agreement all, or
a portion,  of the outstanding  principal  amount of this Note may bear interest
based upon the LIBOR Rate.

      For so long as no Event of  Default  shall  have  occurred  the  principal
amount and  accrued  interest of this Note shall be due and payable on the dates
and in the manner hereinafter set forth:

                         Interest shall be due and payable monthly, in
arrears,  on the first  day of each  month,  commencing  on April 1,  1998,  and
continuing  until such time as the full  principal  balance,  together  with all
other amounts owing hereunder, shall have been paid in full;

                         Principal shall be due and payable monthly
commencing  on April 1,  1998,  and  continuing  on the first day of each  month
thereafter  to and including the first day of March,  2003, in  installments  of
$55,952.38 each; and

                         The entire remaining principal amount then
outstanding, together with any and all other amounts due hereunder, shall be due
and payable on March 2, 2003.

Notwithstanding  the foregoing,  the entire unpaid principal balance and accrued
interest on this Note shall be due and payable  immediately upon any termination
of the Loan Agreement pursuant to Section 4 thereof.

      This Note shall be subject to mandatory  prepayment in accordance with the
provisions of Section 3.3 of the Loan  Agreement.  Borrowers may also  terminate
the Loan Agreement and, in connection with such termination, prepay this Note in
the manner provided in Section 4 of the Loan Agreement.

      Upon the  occurrence of an Event of Default,  Lender shall have all of the
rights and remedies set forth in Section 10 of the Loan Agreement.

      Borrowers  shall pay a late  payment  fee equal to 5% of the amount of any
installment  of principal  or interest,  or both,  required  hereunder  which is
received by Lender more than 10 days after the due date thereof.

      Time is of the essence of this Note.  To the fullest  extent  permitted by
applicable  law,  Borrowers,  for  themselves  and their legal  representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor,  notice  of  non-payment,  notice  of  maturity,  notice  of  protest,
presentment for the purpose of accelerating  maturity,  diligence in collection,
and the benefit of any exemption or insolvency laws.

      Wherever  possible,  each  provision of this Note shall be  interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this Note shall be prohibited or invalid under applicable law, such
provision  shall be ineffective to the extent of such  prohibition or invalidity
without  invalidating the remainder of such provision or remaining provisions of
this  Note.  No delay or failure  on the part of Lender in the  exercise  of any
right  or  remedy  hereunder  shall  operate  as a  waiver  thereof,  nor  as an
acquiescence in any default,  nor shall any single or partial exercise by Lender
of any right or  remedy  preclude  any other  right or  remedy.  Lender,  at its
option, may enforce its rights against any collateral securing this Note without
enforcing  its rights  against  Borrowers,  any  guarantor  of the  indebtedness
evidenced  hereby or any other property or indebtedness  due or to become due to
Borrowers.  Borrowers  agree that,  without  releasing or  impairing  Borrower's
liability hereunder,  Lender may at any time release,  surrender,  substitute or
exchange any collateral securing this Note and may at any time release any party
primarily or secondarily liable for the indebtedness evidenced by this Note.

      This Note shall be governed by, and  construed  and enforced in accordance
with, the laws of the State of Connecticut.

      EACH BORROWER HEREBY WAIVES RIGHTS AS IT MAY HAVE TO NOTICE AND/OR HEARING
UNDER ANY  APPLICABLE  FEDERAL  OR STATE  LAWS  INCLUDING,  WITHOUT  LIMITATION,
CONNECTICUT GENERAL STATUTES SECTION 52-278A, ET SEQ. AS AMENDED,  PERTAINING TO
THE EXERCISE BY LENDER OF SUCH RIGHTS AS THE LENDER MAY HAVE, INCLUDING, BUT NOT
LIMITED TO, THE RIGHT TO SEEK PREJUDGEMENT  REMEDIES AND/OR DEPRIVE BORROWERS OF
OR AFFECT THE USE OF OR POSSESSION OR ENJOYMENT OF ANY BORROWER'S PROPERTY PRIOR
TO THE RENDITION OF A FINAL JUDGMENT AGAINST ANY BORROWER. EACH BORROWER FURTHER
WAIVES  ANY  RIGHT IT MAY HAVE TO  REQUIRE  LENDER  TO  PROVIDE  A BOND OR OTHER
SECURITY AS A  PRECONDITION  TO OR IN  CONNECTION  WITH ANY  PREJUDGMENT  REMEDY
SOUGHT BY AGENT AND  LENDER,  AND WAIVE ANY  OBJECTION  TO THE  ISSUANCE OF SUCH
PREJUDGMENT  REMEDY BASED ON ANY OFFSETS,  CLAIMS,  DEFENSES OR COUNTERCLAIMS TO
ANY ACTION BROUGHT BY ANY LENDER. EACH BORROWER HEREBY REPRESENTS, COVENANTS AND
AGREES THAT THE PROCEEDS OF THE LOANS  EVIDENCED BY THIS AGREEMENT SHALL BE USED
FOR GENERAL  COMMERCIAL  PURPOSES AND THAT SUCH LOANS  CONSTITUTE A  "COMMERCIAL
TRANSACTION" AS DEFINED BY THE STATUTES OF THE STATE OF CONNECTICUT.

      IN WITNESS  WHEREOF,  Borrowers  have caused this Note to be duly executed
and delivered for acceptance by Lender in  Glastonbury,  Connecticut on the date
first above written.

ATTEST:                              TMCI ELECTRONICS, INC.,
                                     a Delaware corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              TOUCHE MANUFACTURING COMPANY, INC.
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              TOUCHE ELECTRONICS, INC.,
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              ENTERPRISE INDUSTRIES, INC.,
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                                 TRINITY ELECTRONICS, INC.,
                                        a California corporation ("Borrower")

                                        By_____________________________________
______________________________          Name_________________________________
Secretary/Assistant Secretary           Title _________________________________


<PAGE>


                                       B-3

                            SECURED PROMISSORY NOTE-B
$2,000,000.00                                                    March 2, 1998
                                                      Glastonbury, Connecticut

      FOR VALUE RECEIVED, each of the undersigned (hereinafter collectively, the
"Borrowers"), hereby jointly and severally promises to pay to the order of FLEET
CAPITAL CORPORATION,  a Rhode Island corporation (hereinafter "Lender"), in such
coin or currency of the United  States which shall be legal tender in payment of
all debts and dues,  public and private,  at the time of payment,  the principal
sum of  $2,000,000.00,  together with interest from and after the date hereof on
the unpaid principal  balance  outstanding at a variable rate per annum equal to
1.50% above the Prime Rate.

      This Secured  Promissory  Note (the "Note") is the Term Note-B referred to
in, and is issued pursuant to, that certain Loan and Security  Agreement between
Borrowers and Lender dated the date hereof (hereinafter, as amended from time to
time, the "Loan Agreement"), and is entitled to all of the benefits and security
of the Loan  Agreement.  All of the terms,  covenants and conditions of the Loan
Agreement and the Security Documents are hereby made a part of this Note and are
deemed  incorporated  herein in full. All capitalized terms used herein,  unless
otherwise specifically defined in this Note, shall have the meanings ascribed to
them in the Loan  Agreement.  The interest  rate margin of 1.50% above the Prime
Rate is subject to reduction in the manner provided in Section 2.1.4 of the Loan
Agreement  and, under the  circumstances  set forth in Section 2.1.5 of the Loan
Agreement all, or a portion,  of the outstanding  principal  amount of this Note
may bear interest based upon the LIBOR Rate.

      The rate of interest in effect  hereunder shall increase or decrease by an
amount equal to any increase or decrease in the Prime Rate,  effective as of the
opening of business  on the date that any such change in the Prime Rate  occurs.
Interest  shall be  computed  in the  manner  provided  in Section 2 of the Loan
Agreement.

      For so long as no Event of  Default  shall  have  occurred  the  principal
amount and  accrued  interest of this Note shall be due and payable on the dates
and in the manner hereinafter set forth:

                         Interest shall be due and payable monthly, in
arrears,  on the first  day of each  month,  commencing  on April 1,  1998,  and
continuing  until such time as the full  principal  balance,  together  with all
other amounts owing hereunder, shall have been paid in full;

                         Principal shall be due and payable monthly
commencing  on April 1,  1998,  and  continuing  on the first day of each  month
thereafter  to and including the first day of March,  2003, in  installments  of
$33,333.33 each; and

                         The entire remaining principal amount then
outstanding, together with any and all other amounts due hereunder, shall be due
and payable on March 2, 2003 .

Notwithstanding  the foregoing,  the entire unpaid principal balance and accrued
interest on this Note shall be due and payable  immediately upon any termination
of the Loan Agreement pursuant to Section 4 thereof.

      This Note shall be subject to mandatory  prepayment in accordance with the
provisions of Section 3.3 of the Loan  Agreement.  Borrowers may also  terminate
the Loan Agreement and, in connection with such termination, prepay this Note in
the manner provided in Section 4 of the Loan Agreement.

      Upon the  occurrence of an Event of Default,  Lender shall have all of the
rights and remedies set forth in Section 10 of the Loan Agreement.

      Borrowers  shall pay a late  payment  fee equal to 5% of the amount of any
installment  of principal  or interest,  or both,  required  hereunder  which is
received by Lender more than 10 days after the due date thereof.

      Time is of the essence of this Note.  To the fullest  extent  permitted by
applicable  law,  Borrowers,  for  themselves  and their legal  representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor,  notice  of  non-payment,  notice  of  maturity,  notice  of  protest,
presentment for the purpose of accelerating  maturity,  diligence in collection,
and the benefit of any exemption or insolvency laws.

      Wherever  possible,  each  provision of this Note shall be  interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this Note shall be prohibited or invalid under applicable law, such
provision  shall be ineffective to the extent of such  prohibition or invalidity
without  invalidating the remainder of such provision or remaining provisions of
this  Note.  No delay or failure  on the part of Lender in the  exercise  of any
right  or  remedy  hereunder  shall  operate  as a  waiver  thereof,  nor  as an
acquiescence in any default,  nor shall any single or partial exercise by Lender
of any right or  remedy  preclude  any other  right or  remedy.  Lender,  at its
option, may enforce its rights against any collateral securing this Note without
enforcing  its rights  against  Borrowers,  any  guarantor  of the  indebtedness
evidenced  hereby or any other property or indebtedness  due or to become due to
Borrowers.  Borrowers  agrees that,  without  releasing or impairing  Borrowers'
liability hereunder,  Lender may at any time release,  surrender,  substitute or
exchange any collateral securing this Note and may at any time release any party
primarily or secondarily liable for the indebtedness evidenced by this Note.

      This Note shall be governed by, and  construed  and enforced in accordance
with, the laws of the State of Connecticut.



<PAGE>


      IN WITNESS WHEREOF,  Borrower has caused this Note to be duly executed and
delivered for acceptance by Lender in Glastonbury, Connecticut on the date first
above written.

ATTEST:                              TMCI ELECTRONICS, INC.,
                                     a Delaware corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              TOUCHE MANUFACTURING COMPANY, INC.,
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              TOUCHE ELECTRONICS, INC.,
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              ENTERPRISE INDUSTRIES, INC.
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              TRINITY ELECTRONICS, INC.,
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


<PAGE>


                                       A-3
                             SECURED PROMISSORY NOTE
$4,000,000.00                                                    March 2, 1998
                                                      Glastonbury, Connecticut

      FOR VALUE RECEIVED, each of the undersigned (hereinafter  collectively the
"Borrowers"), hereby jointly and severally promises to pay to the order of FLEET
CAPITAL CORPORATION,  a Rhode Island corporation (hereinafter "Lender"), in such
coin or currency of the United  States which shall be legal tender in payment of
all debts and dues,  public and private,  at the time of payment,  the principal
sum of  $4,000,000.00  or such  amount as may be  advanced  from time to time to
Borrowers as Equipment Loans under the Loan Agreement (as hereinafter  defined),
together with  interest  from and after the date hereof on the unpaid  principal
balance  outstanding  at a variable rate per annum equal to .50% above the Prime
Rate.

      This Secured  Promissory  Note (the "Note") is the Equipment Note referred
to in, and is issued  pursuant  to, that  certain  Loan and  Security  Agreement
between Borrowers and Lender dated the date hereof (hereinafter, as amended from
time to time, the "Loan Agreement"),  and is entitled to all of the benefits and
security of the Loan  Agreement.  All of the terms,  covenants and conditions of
the Loan  Agreement  and the Security  Documents  are hereby made a part of this
Note and are deemed  incorporated  herein in full.  All  capitalized  terms used
herein,  unless  otherwise  specifically  defined in this  Note,  shall have the
meanings  ascribed to them in the Loan  Agreement.  The interest  rate margin of
 .50%  above the Prime Rate is subject to  reduction  in the manner  provided  in
Section 2.1.4 of the Loan Agreement and,  under the  circumstances  set forth in
Section  2.1.5 of the Loan  Agreement  all,  or a  portion,  of the  outstanding
principal amount of this Note may bear interest based upon the LIBOR Rate.

      The rate of interest in effect  hereunder shall increase or decrease by an
amount equal to any increase or decrease in the Prime Rate,  effective as of the
opening of business  on the date that any such change in the Prime Rate  occurs.
Interest  shall be  computed  in the  manner  provided  in Section 2 of the Loan
Agreement.

      For so long as no Event of  Default  shall  have  occurred  the  principal
amount and  accrued  interest of this Note shall be due and payable on the dates
and in the manner hereinafter set forth:

                         Interest shall be due and payable monthly, in
arrears,  on the first  day of each  month,  commencing  on April 1,  1998,  and
continuing  until such time as the full  principal  balance,  together  with all
other amounts owing hereunder, shall have been paid in full;

                         Principal shall be due and payable monthly
commencing  on April 1,  1998,  and  continuing  on the first day of each  month
thereafter to and including the first day of March,  2003, in installments equal
to 1/84th of the aggregate amount theretofore advanced to Borrowers as Equipment
Leases; and

                         The entire remaining principal amount then
outstanding, together with any and all other amounts due hereunder, shall be due
and payable on March 2, 2003.

Notwithstanding  the foregoing,  the entire unpaid principal balance and accrued
interest on this Note shall be due and payable  immediately upon any termination
of the Loan Agreement pursuant to Section 4 thereof.

      This Note shall be subject to mandatory  prepayment in accordance with the
provisions of Section 3.3 of the Loan  Agreement.  Borrowers may also  terminate
the Loan Agreement and, in connection with such termination, prepay this Note in
the manner provided in Section 4 of the Loan Agreement.

      Upon the  occurrence of an Event of Default,  Lender shall have all of the
rights and remedies set forth in Section 10 of the Loan Agreement.

      Borrowers  shall pay a late  payment  fee equal to 5% of the amount of any
installment  of principal  or interest,  or both,  required  hereunder  which is
received by Lender more than 10 days after the due date thereof.

      Time is of the essence of this Note.  To the fullest  extent  permitted by
applicable  law,  Borrowers,  for  themselves  and their legal  representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor,  notice  of  non-payment,  notice  of  maturity,  notice  of  protest,
presentment for the purpose of accelerating  maturity,  diligence in collection,
and the benefit of any exemption or insolvency laws.

      Wherever  possible,  each  provision of this Note shall be  interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this Note shall be prohibited or invalid under applicable law, such
provision  shall be ineffective to the extent of such  prohibition or invalidity
without  invalidating the remainder of such provision or remaining provisions of
this  Note.  No delay or failure  on the part of Lender in the  exercise  of any
right  or  remedy  hereunder  shall  operate  as a  waiver  thereof,  nor  as an
acquiescence in any default,  nor shall any single or partial exercise by Lender
of any right or  remedy  preclude  any other  right or  remedy.  Lender,  at its
option, may enforce its rights against any collateral securing this Note without
enforcing  its rights  against  Borrowers,  any  guarantor  of the  indebtedness
evidenced  hereby or any other property or indebtedness  due or to become due to
Borrowers.  Borrowers  agree that,  without  releasing or  impairing  Borrower's
liability hereunder,  Lender may at any time release,  surrender,  substitute or
exchange any collateral securing this Note and may at any time release any party
primarily or secondarily liable for the indebtedness evidenced by this Note.

      This Note shall be governed by, and  construed  and enforced in accordance
with, the laws of the State of Connecticut.



<PAGE>


      IN WITNESS WHEREOF,  Borrower has caused this Note to be duly executed and
delivered  and  accepted  in  Glastonbury,  Connecticut  on the date first above
written.

ATTEST:                              TMCI ELECTRONICS, INC.,
                                     a Delaware corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              TOUCHE MANUFACTURING COMPANY, INC.,
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              TOUCHE ELECTRONICS, INC.,
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              ENTERPRISE INDUSTRIES, INC.,
                                     a California corporation ("Borrower")

______________________________       By________________________________________
Secretary/Assistant Secretary        Title_____________________________________


ATTEST:                              TRINITY ELECTRONICS, INC.,
                                     a California corporation ("Borrower")

                                     By________________________________________
Secretary/Assistant Secretary        Title_____________________________________