[LOGO OF COMERICA]

                                CREDIT AGREEMENT

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THIS CREDIT  AGREEMENT  is made and  delivered to be effective as of November 1,
2003, by GVI SECURITY, INC., a Delaware corporation,  d/b/a SAMSUNG CCTV (herein
referred to with all successors,  assigns and/or personal representatives as the
"Borrower"),  and COMERICA  BANK  (herein  referred to with its  successors  and
assigns as the "Bank").  For and in  consideration of the mutual promises herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrower and Bank agree as follows:

SECTION 1.        DEFINITIONS

1.1      Defined Terms.  The following  terms, as used in this Agreement,  shall
         have the meanings set forth below.  The singular number shall be deemed
         to include the plural,  the masculine gender shall include the feminine
         and neuter genders, and vice versa.

         "Accounts,"  "Chattel  Paper,"  "Documents,"   "General   Intangibles,"
         "Goods,"  "Instruments" shall have the meanings assigned to them in the
         UCC on the date of this Agreement.

         "Affiliate" shall mean, when used with respect to any Person, any other
         Person which,  directly or indirectly,  controls or is controlled by or
         is  under  common  control  with  such  Person.  For  purposes  of this
         definition,  "control" (including, with correlative meanings, the terms
         "controlled by" and "under common control  with"),  with respect to any
         Person, shall mean possession,  directly or indirectly, of the power to
         direct or cause the  direction of the  management  and policies of such
         Person, whether through the ownership of voting securities, by contract
         or otherwise.

         "Agreement"  shall mean this Credit  Agreement,  including all addenda,
         exhibits and schedules now or hereafter made a part hereof, as the same
         may be amended from time to time.

         "Applicable Interest Rate" shall mean, with respect to the Indebtedness
         from time to time  outstanding  under any promissory note or other Loan
         Document  evidencing  the  Indebtedness,  the rate or rates provided in
         such note as the applicable interest rate.

         "Business  Day"  shall mean a day on which the Bank is open to carry on
         its normal commercial lending business.

         "Collateral" shall mean all property, assets and rights in which a Lien
         or other  encumbrance  in favor of or for the benefit of Bank is or has
         been  granted or arises or has arisen,  or may  hereafter be granted or
         arise, under or in connection with any Loan Document, or otherwise,  to
         secure the payment or performance of any portion of the Indebtedness.

         "Debt" shall mean, as of any applicable date of determination  thereof,
         all liabilities of a Person that should be classified as liabilities in
         accordance  with GAAP.  In the case of Borrower,  the term "Debt" shall
         include, without limitation, the Indebtedness.

         "Debt-to-Tangible  Net Worth  Ratio"  shall mean,  with  respect to any
         Person,  and as of any applicable date of  determination  thereof,  the
         ratio of (a) the total Debt of such Person less the total  Subordinated
         Debt of such Person to (b) the Tangible Net Worth of such Person.

         "Default"  shall mean any condition or event which,  with the giving of
         notice or the passage of time,  or both,  would  constitute an Event of
         Default.


                                      -1-
<PAGE>


         "Disbursement  Date"  shall  mean each date upon which the Bank makes a
         loan to the Borrower under Section 2.1 of this Agreement.

         "Environmental Law(s)" shall mean all laws, codes,  ordinances,  rules,
         regulations,  orders,  decrees and  directives  issued by any  federal,
         state,  local,  foreign  or other  governmental  or quasi  governmental
         authority  or  body  (or  any  agency,   instrumentality  or  political
         subdivision  thereof)  pertaining  to Hazardous  Materials or otherwise
         intended  to  regulate or improve  health,  safety or the  environment,
         including, without limitation, any hazardous materials or wastes, toxic
         substances,  flammable,  explosive or radioactive materials,  asbestos,
         and/or  other  similar   materials;   any  so-called   "superfund"   or
         "superlien" law,  pertaining to Hazardous  Materials on or about any of
         the  Collateral,  or any other  property at any time  owned,  leased or
         otherwise used by any Loan Party,  or any portion  thereof,  including,
         without limitation,  those relating to soil, surface, subsurface ground
         water  conditions  and the  condition of the ambient air; and any other
         federal,  state, foreign or local statute, law, ordinance,  code, rule,
         regulation,  order or  decree  regulating,  relating  to,  or  imposing
         liability or standards of conduct  concerning,  any  hazardous,  toxic,
         radioactive,  flammable or dangerous waste,  substance or material,  as
         now or at anytime hereafter in effect.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
         as amended, or any successor act or code.

         "Event of Default" shall mean any of those  conditions or events listed
         in Section 6.1 of this Agreement.

         "Financial  Statements"  shall mean all those balance sheets,  earnings
         statements  and other  financial  data  (whether of the  Borrower,  any
         Subsidiary,  any Guarantor or otherwise)  which have been  furnished to
         the Bank for the purpose of, or in connection  with, this Agreement and
         the transactions contemplated hereby.

         "GAAP" shall mean generally accepted accounting principles consistently
         applied.

         "Governmental Authority" shall mean the United States, each state, each
         county, each city, and each other political subdivision in which all or
         any  portion of the  Collateral  is located,  and each other  political
         subdivision,  agency, or instrumentality  exercising  jurisdiction over
         Bank, any Loan Party, any of the Indebtedness or any Collateral.

         "Governmental Requirements" shall mean all laws, ordinances, rules, and
         regulations of any Governmental Authority applicable to any Loan Party,
         any of the Indebtedness or any Collateral.

         "Guarantor(s)"  shall mean,  as the  context  dictates,  any  Person(s)
         (other  than  the  Borrower)  who  shall,  at any  time,  guarantee  or
         otherwise be or become  obligated  for the repayment of all or any part
         of the Indebtedness, if any.

         "Hazardous  Material"  shall mean and include any  hazardous,  toxic or
         dangerous  waste,  substance  or  material  defined  as such in, or for
         purposes of, any Environmental Law(s).


<PAGE>


         "Indebtedness"  shall mean all  obligations and liabilities of any Loan
         Party to Bank under this Agreement or any Loan Document,  together with
         all other  indebtedness,  obligations  and  liabilities  whatsoever  of
         Borrower  to  Bank,   whether  matured  or  unmatured,   liquidated  or
         unliquidated,  direct or  indirect,  absolute or  contingent,  joint or
         several,  due or to become  due,  now  existing or  hereafter  arising,
         voluntary or involuntary,  known or unknown,  or originally  payable to
         Bank or to a third party and  subsequently  acquired by Bank including,
         without limitation,  any: late charges; loan fees or charges; overdraft
         indebtedness;  costs  incurred  by Bank in  establishing,  determining,
         continuing  or  defending  the  validity  or priority of any Lien or in
         pursuing any of its rights or remedies under this Agreement or any Loan
         Document  or in  connection  with any  proceeding  involving  Bank as a
         result of any financial accommodation to Borrower;  debts,  obligations
         and  liabilities  for which Borrower  would  otherwise be liable to the
         Bank were it not for the invalidity or enforceability of them by reason
         of any bankruptcy, insolvency or other law or for any other reason; and
         reasonable costs and expenses of attorneys and paralegals,  whether any
         suit or other  action  is  instituted,  and to  court  costs if suit or
         action is instituted,  and whether any such fees, costs or expenses are
         incurred  at the trial  court  level or on appeal,  in  bankruptcy,  in
         administrative   proceedings,  in  probate  proceedings  or  otherwise;
         provided,  however,  that the term  Indebtedness  shall not include any
         consumer  loan to the  extent  treatment  of  such  loan as part of the
         Indebtedness would violate any Governmental Requirement.

         "Inventory"  means  all of  the  Borrower's  now  owned  and  hereafter
         acquired inventory,  goods,  merchandise,  and other personal property,
         wherever located, to be furnished under any contract of service or held
         for sale or lease, all raw materials, work-in-process,  finished goods,
         returned and repossessed goods, and materials and supplies of any kind,
         nature or  description  which are or might be used or  consumed  in the
         Borrower's  business  or  used  in  connection  with  the  manufacture,
         packing, shipping, advertising,  selling or finishing of such inventory
         goods,  merchandise and such other personal property, and all documents
         of title or other documents representing them, and all proceeds thereof
         (including,  but not limited to, all proceeds of insurance with respect
         thereto,  including  the proceeds of any casualty  insurance);  and any
         lists,  information  and  records  prepared  or kept in relation to the
         foregoing  and  including,  without  limitation,  any of the  foregoing
         constituting  in-transit inventory at the FOB Shipping Point, following
         acquisition thereof by Borrower.

         "Letter of Credit" shall mean a letter of credit issued by the Bank for
         the  account  of  and/or  upon  the  application  of  the  Borrower  in
         accordance  with  this  Agreement,  as such  Letter  of  Credit  may be
         amended, supplemented, extended or confirmed from time to time.

         "Letter of Credit  Liabilities"  shall mean, at any time and in respect
         of all Letters of Credit, the sum of (a) the aggregate amount available
         to be drawn  under all such  Letters of Credit  plus (b) the  aggregate
         unpaid amount of all Reimbursement  Obligations then due and payable in
         respect of previous drawings under such Letters of Credit.

         "Lien" shall mean any valid and  enforceable  interest in any property,
         whether real, personal or mixed,  securing an indebtedness,  obligation
         or  liability  owed to or claimed by any Person other than the owner of
         such property,  whether such indebtedness is based on the common law or
         any statute or contract and  including,  but not limited to, a security
         interest,  pledge,  mortgage,   assignment,   conditional  sale,  trust
         receipt, lease, consignment or bailment for security purposes.

         "Loan  Documents"  shall  mean   collectively,   this  Agreement,   any
         promissory notes evidencing  Indebtedness,  any approved  subordination
         agreement,  any reimbursement agreement or other documentation executed
         in  connection  with any  Letter of  Credit,  and any other  documents,
         instruments or agreements evidencing, governing, securing, guaranteeing
         or otherwise  relating to or executed pursuant to or in connection with
         any of the  Indebtedness  or any Loan  Document  (whether  executed and
         delivered prior to, concurrently with or subsequent to this Agreement),
         as such  documents  may have been or may hereafter be amended from time
         to time.

<PAGE>


         "Loan Party" shall mean Borrower,  each of its Subsidiaries (whether or
         not a party to any Loan  Document)  and each other  Person who or which
         shall be liable for the payment or performance of all or any portion of
         the Indebtedness or who or which shall own any property that is subject
         to (or  purported  to be subject  to) a Lien which  secures  all or any
         portion of the Indebtedness.

         "Material  Adverse  Effect"  shall mean any act,  event,  condition  or
         circumstance  which could materially and adversely affect the business,
         operations,  condition (financial or otherwise),  performance or assets
         of any Loan  Party,  the  ability  of any Loan  Party  to  perform  its
         obligations  under any Loan Document to which it is a party or by which
         it is bound or the enforceability of any Loan Document.

         "Maximum  Legal  Rate"  shall  mean  the  maximum  rate of  nonusurious
         interest per annum  permitted to be paid by Borrower or, if applicable,
         another Loan Party or received by Bank with  respect to the  applicable
         portion of the Indebtedness from time to time under applicable state or
         federal law as now or as may be hereafter in effect,  including Chapter
         1 D of Title 79 Vernon's  Texas Civil  Statutes (and as the same may be
         incorporated  by  reference  in other Texas  statutes),  but  otherwise
         without limitation, that rate based upon the "weekly ceiling rate" from
         time to time in effect under  Chapter 303 of the Texas Finance Code, as
         amended.

         "Net  Income"  shall  mean the net income (or loss) of a Person for any
         applicable period of determination, determined in accordance with GAAP,
         but excluding, in any event:

         (a)      any gains or losses on the sale or other  disposition,  not in
                  the ordinary  course of business,  of  investments or fixed or
                  capital  assets,  and any taxes on the excluded  gains and any
                  tax  deductions or credits on account of any excluded  losses;
                  and

         (b)      in the case of  Borrower,  net earnings of any Person in which
                  Borrower has an ownership  interest,  unless such net earnings
                  shall have  actually  been received by Borrower in the form of
                  cash distributions.

         "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation,  or any
         Person  succeeding  to the present  powers and functions of the Pension
         Benefit Guaranty Corporation.

         "Pension Plan(s)" shall mean any and all employee benefit pension plans
         of Borrower and/or any of its Subsidiaries in effect from time to time,
         as such term is defined in ERISA.

         "Permitted  Encumbrances"  shall mean:  (a) Liens in favor of the Bank;
         (b) Liens for taxes,  assessments or other  governmental  charges which
         are not yet  due  and  payable,  incurred  in the  ordinary  course  of
         business and for which no interest, late charge or penalty is attaching
         or which are being  contested in good faith by appropriate  proceedings
         and, if requested by Bank, bonded in an amount and manner  satisfactory
         to Bank; (c) Liens,  not delinquent,  arising in the ordinary course of
         business   and  created  by  statute  in   connection   with   worker's
         compensation,  unemployment  insurance,  social  security  and  similar
         statutory obligations; (d) Liens of mechanics,  materialmen,  carriers,
         warehousemen  or other  like  statutory  or common  law Liens  securing
         obligations  incurred in good faith in the ordinary  course of business
         without  violation  of any  Loan  Document  that  are  not  yet due and
         payable; (e) Liens existing as of the date hereof identified on Exhibit
         A attached  hereto;  and (f) Liens placed upon fixed  assets  hereafter
         acquired to secure a portion of the purchase  price  thereof,  provided
         that any such Lien shall not encumber any other property of Borrower.


<PAGE>

         "Person"  or   "person"   shall  mean  any   individual,   corporation,
         partnership,  joint venture,  limited liability  company,  association,
         trust,  unincorporated  association,  joint stock company,  government,
         municipality, political subdivision or agency, or other entity.

         "Reimbursement  Obligations"  shall mean, at any time and in respect of
         all Letters of Credit, the aggregate obligations of the Borrower,  then
         outstanding  or which may thereafter  arise,  to reimburse the Bank for
         any  amount  paid or  incurred  by the Bank in  respect  of any and all
         drawings under such Letters of Credit,  together with any and all other
         Indebtedness,  obligations  and  liabilities  of any Loan Party to Bank
         related to such Letters of Credit  arising  under this  Agreement,  any
         Letter of Credit application or any other Loan Document.

         "Revolving  Credit  Maturity Date" shall mean the  Termination  Date or
         such earlier date on which the entire  unpaid  principal  amount of all
         Revolving  Loans becomes due and payable  whether by the lapse of time,
         demand for payment,  acceleration or otherwise;  provided,  however, if
         any such date is not a business day, then the Revolving Credit Maturity
         Date shall be the next succeeding business day.

         "Revolving  Credit  Maximum  Amount"  shall  mean  the  lesser  of  (a)
         $10,000,000.00  or (b) the maximum  amount  permitted  by that  certain
         Advance Formula Agreement ("Advance Formula Agreement"),  dated of even
         date herewith, executed by Borrower and Bank.

         "Revolving  Credit Note" shall mean the Revolving  Credit Note dated of
         even  date  herewith  in  the  maximum  original  principal  amount  of
         $10,000,000.00  made by Borrower  payable to the order of the Bank,  as
         the same may be renewed, extended, modified, increased or restated from
         time to time.

         "Revolving  Loan" shall mean an advance made, or to be made,  under the
         revolving  credit facility to or for the credit of Borrower by the Bank
         pursuant to this Agreement.

         "Subordinated  Debt"  shall mean any Debt of  Borrower  (other than the
         Indebtedness) which has been subordinated to the Indebtedness  pursuant
         to a  subordination  agreement in form and content  satisfactory to the
         Bank.

         "Subsidiary"  shall  mean  as to  any  particular  parent  entity,  any
         corporation,  partnership,  limited  liability  company or other entity
         (whether now existing or hereafter organized or acquired) in which more
         than fifty percent (50%) of the outstanding equity ownership  interests
         having voting rights as of any applicable date of determination,  shall
         be owned directly,  or indirectly through one or more Subsidiaries,  by
         such parent entity.  As of the date of this Agreement,  Borrower's only
         Subsidiaries are: None

         "Tangible  Net Worth" shall mean,  with respect to any Person and as of
         any  applicable  date of  determination,  (a) the net book value of all
         assets  of  such  Person  (excluding  accounts   receivables  from  any
         Affiliate,   patent  rights,   trademarks,   trade  names,  franchises,
         copyrights, licenses, goodwill, and all other intangible assets of such
         Person),  after all  appropriate  deductions  in  accordance  with GAAP
         (including,  without  limitation,  reserves for  doubtful  receivables,
         obsolescence, depreciation and amortization), less (b) all Debt of such
         Person at such time, plus (c) the Subordinated Debt of such Person.

         "Termination Date" shall mean November 1, 2005.


<PAGE>

         "UCC" shall mean the Uniform Commercial Code as adopted and in force in
         the State of Texas, as amended.

1.2      Accounting Terms. All accounting terms not specifically defined in this
         Agreement shall be determined and construed in accordance with GAAP.

SECTION 2.        FUNDING LOANS, PAYMENTS, RECOVERIES AND COLLECTIONS

2.1      Funding Loans. Subject to the terms,  conditions and procedures of this
         Agreement and each other Loan Document and to the  satisfaction  of all
         conditions precedent to the making and funding of any loan as set forth
         in any Loan  Document,  Bank shall make the  proceeds  of any such loan
         available to Borrower on the Disbursement  Date agreed upon by Bank and
         Borrower by  depositing  such  proceeds  into an account  maintained by
         Borrower with Bank or as otherwise agreed to in writing by Borrower and
         Bank.

2.2      Revolving  Loans.  Subject  to the  terms  and  conditions  of the Loan
         Documents and to the  satisfaction  of all conditions  precedent to the
         making and funding of any loan as set forth in any Loan  Document,  the
         Bank  agrees to make  Revolving  Loans to Borrower at any time and from
         time to time from the effective  date hereof until (but not  including)
         the Revolving  Credit  Maturity Date.  The proceeds of Revolving  Loans
         shall be used solely to finance the working capital needs of Borrower.

         Except as hereinafter  provided,  Borrower may request a Revolving Loan
         by submitting to Bank a request for advance by an authorized officer or
         other  representative of Borrower,  subject to the following:  (a) each
         such  request  for  advance  shall  include,  without  limitation,  the
         proposed  amount of such revolving  loan and the proposed  Disbursement
         Date,  which date must be a Business  Day;  (b) each such  request  for
         advance  shall be  communicated  to Bank by 12:00 noon  (Dallas,  Texas
         time) three (3) business days prior to the proposed  Disbursement Date;
         (c) a request for  advance,  once  communicated  to Bank,  shall not be
         revocable  by  Borrower;   and  (d)  each  request  for  advance,  once
         communicated to Bank, shall constitute a  representation,  warranty and
         certification  by Borrower as of the date thereof that: (i) both before
         and after the making of such Revolving  Loan, the obligations set forth
         in the Loan Documents are and shall be valid,  binding and  enforceable
         obligations  of each  Loan  Party,  as  applicable;  (ii) all terms and
         conditions  precedent  to the making of such  Revolving  Loan have been
         satisfied,  and  shall  remain  satisfied  through  the  date  of  such
         Revolving Loan;  (iii) the making of such Revolving Loan will not cause
         the aggregate  outstanding principal amount of all Revolving Loans plus
         the  Letter  of  Credit  Liabilities,  if  applicable,  to  exceed  the
         Revolving  Credit Maximum  Amount;  (iv) no Default or Event of Default
         shall have  occurred or be in  existence,  and none will exist or arise
         upon the making of such  Revolving  Loan; (v) the  representations  and
         warranties  contained in the Loan Documents are true and correct in all
         material  respects  and  shall  be true  and  correct  in all  material
         respects as of the making of such Revolving  Loan; and (vi) the request
         for advance will not violate the terms or  conditions  of any contract,
         indenture, agreement or other borrowing of any Loan Party.

         Bank  may  elect  (but  without  any  obligation  to do so)  to  make a
         Revolving  Loan upon the  telephonic or facsimile  request of Borrower,
         provided  that  Borrower  has first  executed  and  delivered to Bank a
         telephone  notice  authorization  in form and content  satisfactory  to
         Bank. If any such  Revolving  Loan based upon a telephonic or facsimile
         request is made by Borrower,  Bank may require Borrower to confirm said
         telephonic or facsimile request in writing by delivering to Bank, on or
         before  11:00  a.m.  (Dallas,  Texas  time)  on the next  business  day
         following the Disbursement Date of such Revolving Loan, a duly executed
         written request for advance,  and all other  provisions of this Section
         2.2  shall be  applicable  with  respect  to such  Revolving  Loan.  In
         addition,  Borrower  may  authorize  the  Bank  to  automatically  make
         revolving  loans  pursuant to such other  written  agreements as may be
         entered into by Bank and Borrower.


<PAGE>


         Notwithstanding  anything  contained in this Agreement to the contrary,
         the  aggregate  principal  amount  of all  Revolving  Loans at any time
         outstanding plus the Letter of Credit Liabilities, if applicable, shall
         not exceed the Revolving Credit Maximum Amount. If said limitations are
         exceeded at anytime,  Borrower  shall  immediately,  without  demand by
         Bank, pay to Bank an amount not less than such excess,  or, if Bank, in
         its sole discretion,  shall so agree,  Borrower shall provide Bank cash
         collateral in an amount not less than such excess,  and Borrower hereby
         pledges and grants to Bank a security  interest in such cash collateral
         so  provided to Bank.  Unless  otherwise  expressly  provided in a Loan
         Document, all sums payable by Borrower to Bank under or pursuant to any
         Loan Document,  whether  principal,  interest,  or otherwise,  shall be
         paid,  when due,  directly to Bank at any office of Bank located in the
         State  of Texas in  immediately  available  United  States  funds,  and
         without setoff, deduction or counterclaim. Bank may, in its discretion,
         charge  any and all  deposit  or  other  accounts  (including,  without
         limitation,  any account  evidenced by a certificate of deposit or time
         deposit)  of Borrower  maintained  with Bank for all or any part of any
         Indebtedness  then  due  and  payable;  provided,  however,  that  such
         authorization  shall  not  affect  Borrower's  obligations  to pay  all
         Indebtedness,  when  due,  whether  or not any  such  account  balances
         maintained  by Borrower with Bank are  insufficient  to pay any amounts
         then due.

         Borrower shall pay to Bank an unused  commitment fee in an amount equal
         to the product of (a) one quarter of one percent  (.25%)  multiplied by
         (b) the difference between (i) the maximum face amount of the Revolving
         Credit Note and (ii) the average daily aggregate  principal  balance of
         all  Revolving  Loans  outstanding  during  each of  Borrower's  fiscal
         quarters.  Such fee shall be computed and shall be payable quarterly in
         arrears as of the end of each of Borrower's fiscal quarters. Bank shall
         invoice  Borrower for such fees, which invoice shall be due and payable
         within fifteen (15) days after receipt.

         The   provisions   of  Chapter  346  of  the  Texas  Finance  Code  are
         specifically declared by the parties not to be applicable to any of the
         Loan Documents or the transactions contemplated thereby.

2.3      Letters  of  Credit.  Subject  to the  terms  and  conditions  of  this
         Agreement and the other Loan  Documents,  the Bank shall,  upon request
         from Borrower from time to time prior to the Revolving  Credit Maturity
         Date,  issue  one or more  Letters  of  Credit.  The  Letter  of Credit
         Liabilities  shall  not  exceed  $1,000,000.00  and  the sum of (a) the
         outstanding  principal  balance  of all  Revolving  Loans  plus (b) the
         Letter of Credit  Liabilities  shall not  exceed the  Revolving  Credit
         Maximum  Amount.  Letters of Credit may be issued  solely as commercial
         letters of credit  related to trade  financing.  Each  Letter of Credit
         issued  pursuant to this  Agreement  shall be in a minimum  amount of $
         -0-. No Letter of Credit shall have a stated expiration date later than
         the Revolving Credit Maturity Date.

         Borrower shall give the Bank written notice requesting each issuance of
         a Letter of Credit hereunder not less than ten (10) business days prior
         to the  requested  issuance  date and  shall  furnish  such  additional
         information  regarding  such  transaction  as  Bank  may  request.  The
         issuance  by Bank of each  Letter of Credit  shall,  in addition to the
         conditions precedent set forth elsewhere in this Agreement,  be subject
         to the conditions  precedent that (i) such Letter of Credit shall be in
         form and  substance  satisfactory  to Bank,  (ii)  Borrower  shall have
         executed and delivered  such  applications  and other  instruments  and
         agreements  relating  to such  Letter  of  Credit  as Bank  shall  have
         requested and are not  inconsistent  with the terms of this  Agreement,
         (iii) each of the  statements  in Section  2.2 (d) above are true as of
         the date of issuance of such Letter of Credit with  respect to issuance
         of such Letter of Credit (as opposed to making a Revolving  Loan),  and
         the  submission  of an  application  for issuance of a Letter of Credit
         shall  constitute  a  representation,  warranty  and  certification  of
         Borrower to that effect,  and (iv) no Letter of Credit may be issued if
         after  giving  effect  thereto,  the sum of the  aggregate  outstanding
         principal  balance  of all  Revolving  Loans  plus the Letter of Credit
         Liabilities  would exceed the Revolving  Credit  Maximum  Amount.  With
         respect to the  issuance or renewal of each Letter of Credit,  Borrower
         shall pay to Bank an  origination  fee for each Letter of Credit in the
         amount of one  percent  (1%) of the amount of such Letter of Credit and
         such other fees and expenses  customarily charged by Bank in connection
         with the issuance or renewals of letters of credit.


<PAGE>


         Borrower shall be irrevocably and  unconditionally  obligated forthwith
         to  reimburse  Bank for any amount paid by Bank upon any drawing  under
         any Letter of Credit,  without  presentment,  demand,  protest or other
         formalities  of any  kind,  all of  which  are  hereby  waived.  Unless
         Borrower   shall  elect  to  otherwise   satisfy   such   Reimbursement
         Obligation,  such reimbursement  shall,  subject to satisfaction of any
         conditions provided herein for the making of Revolving Loans and to the
         Revolving Credit Maximum Amount,  automatically be made by advancing to
         Borrower  a  Revolving  Loan  in  the  amount  of  such   Reimbursement
         Obligation.

2.4      Maximum Interest Rate. At no time shall any Applicable Interest Rate or
         default  rate in  respect  of any  Indebtedness  hereunder,  exceed the
         Maximum  Legal  Rate.  In the event  that any  interest  is  charged or
         otherwise  received  by Bank  in  excess  of the  Maximum  Legal  Rate,
         Borrower hereby  acknowledges  and agrees that any such excess interest
         shall be the result of an accidental and bona fide error,  and any such
         excess  shall be deemed to have been payment of  principal,  and not of
         interest,  and  shall  be  applied,  first,  to  reduce  the  principal
         Indebtedness  then outstanding,  second,  any remaining excess, if any,
         shall be  applied  to reduce any other  Indebtedness,  and  third,  any
         remaining   excess,   if  any,   shall   be   returned   to   Borrower.
         Notwithstanding  the foregoing or anything to the contrary contained in
         this  Agreement  or  any  other  Loan  Document,  but  subject  to  all
         limitations  contained in this  Section,  if at anytime any  Applicable
         Interest  Rate or default rate or other rate of interest  applicable to
         any portion of the Indebtedness is computed on the basis of the Maximum
         Legal Rate, any subsequent  reduction in the Applicable  Interest Rate,
         default  rate or such other  rate of  interest  shall not  reduce  such
         interest rate thereafter payable below the Maximum Legal Rate until the
         aggregate  amount  of  interest  accrued  equals  the  total  amount of
         interest  that would have accrued if interest  had, at all times,  been
         computed solely on the basis of the Applicable  Interest Rate,  default
         rate or such other  interest  rate.  This  Section  shall  control  all
         agreements between the Borrower and the Bank.

2.5      Receipt of  Payments  by Bank.  Any  payment by  Borrower of any of the
         Indebtedness  made by mail will be deemed tendered and received by Bank
         only upon actual receipt thereof by Bank at the address  designated for
         such payment,  whether or not Bank has authorized payment by mail or in
         any other  manner,  and such  payment  shall not be deemed to have been
         made in a timely manner unless  actually  received by Bank on or before
         the date due for such  payment,  time  being of the  essence.  Borrower
         expressly  assumes  all  risks  of loss  or  liability  resulting  from
         non-delivery or delay of delivery of any item of payment transmitted by
         mail or in any other  manner.  Acceptance  by Bank of any payment in an
         amount less than the amount then due shall be deemed an  acceptance  on
         account  only,  and any failure to pay the entire amount then due shall
         constitute  and  continue  to be an  Event  of  Default.  Prior  to the
         occurrence of any Default,  Borrower shall have the right to direct the
         application  of any and all  payments  made  to Bank  hereunder  to the
         Indebtedness   evidenced  by  the  respective   notes   evidencing  the
         Indebtedness.  Borrower  waives the right to direct the  application of
         any and all  payments  received by Bank  hereunder at any time or times
         after  the  occurrence  and  during  the  continuance  of any  Default.
         Borrower  further  agrees  that  after the  occurrence  and  during the
         continuance  of any Default,  or prior to the occurrence of any Default
         if Borrower has failed to direct such application,  Bank shall have the
         continuing exclusive right to apply and to reapply any and all payments
         received by Bank at any time or times,  whether as voluntary  payments,
         proceeds  from any  Collateral,  offsets,  or  otherwise,  against  the
         Indebtedness  in such order and in such manner as Bank may, in its sole
         discretion, deem advisable,  notwithstanding any entry by Bank upon any
         of its books and records. Borrower hereby expressly agrees that, to the
         extent that Bank  receives any payment or benefit of or otherwise  upon
         any of the  Indebtedness,  and such  payment  or  benefit,  or any part
         thereof,  is  subsequently  invalidated,  declared to be  fraudulent or
         preferential,  set  aside,  or  required  to be  repaid  to a  trustee,
         receiver,  or any other  Person  under  any  bankruptcy  act,  state or
         federal law,  common law,  equitable  cause or  otherwise,  then to the
         extent of such payment or benefit,  the Indebtedness,  or part thereof,
         intended to be satisfied  shall be revived and  continued in full force
         and effect as if such  payment or benefit had not been made or received
         by Bank, and, further, any such repayment by Bank shall be added to and
         be deemed to be additional Indebtedness.


<PAGE>

2.6      Conditions  Precedent to Loans and Letters of Credit. The obligation of
         the Bank to issue any Letter of Credit,  if applicable,  or to make any
         loan  under or  pursuant  to this  Agreement  shall be  subject  to the
         following conditions precedent:

         a.       Borrower  shall have executed and delivered to Bank, or caused
                  to  have  been  executed  and  delivered  to  Bank,  all  such
                  instruments,  agreements,  certificates,  opinions,  financial
                  statements,   appraisals,   evidence  of  title,  evidence  of
                  insurance,  environmental  audits,  and other  information and
                  other  documents  as the Bank  shall  require,  and all of the
                  foregoing shall be in form and content  acceptable to Bank and
                  all  instruments  and  agreements  shall be in full  force and
                  effect and binding  and  enforceable  obligations  of Borrower
                  and,  to the extent  that it is a party  thereto or  otherwise
                  bound thereby, of each other Person who may be a party thereto
                  or bound thereby including without limitation: (i) evidence of
                  existence,  good standing,  qualification  to conduct business
                  and  authority  for each Loan Party and signatory on behalf of
                  each  Loan  Party;  (ii)  all  notes,   guaranties,   security
                  agreements,  mortgages,  deeds of  trust,  pledge  agreements,
                  assignments,   financing   statements   and  other   documents
                  requested by Bank to evidence the  Indebtedness  or to create,
                  protect or perfect Liens upon the Collateral  required by Bank
                  as  security  for  the  Indebtedness  and  to  accord  Bank  a
                  perfected security position in the Collateral, subject only to
                  Permitted  Encumbrances;   (iii)  if  applicable,  a  guaranty
                  agreement  from each  Guarantor  required  by Bank;  (iv) such
                  other documents or agreements of security,  assurances of Loan
                  Document   validity,   legality   and   enforceability,    and
                  appropriate assurances of validity, perfection and priority of
                  Lien as  Bank  may  request,  including,  without  limitation,
                  delivery to the Bank of landlord waivers satisfactory to Bank,
                  and Bank shall have received proof that  appropriate  security
                  agreements,  financing statements,  mortgages, deeds of trust,
                  collateral and other documents  covering the Collateral  shall
                  have been  executed and delivered by the  appropriate  Persons
                  and  recorded  or filed in such  jurisdictions  and such other
                  steps  shall  have been  taken as  necessary  to  perfect  and
                  protect,  subject  only to Permitted  Encumbrances,  the Liens
                  granted thereby.

         b.       All actions,  proceedings,  instruments and documents required
                  to carry out the borrowings and  transactions  contemplated by
                  this  Agreement  or any  other  Loan  Document  or  incidental
                  thereto, and all other related legal matters,  shall have been
                  satisfactory to and approved by Bank.

         c.       Each Loan Party shall have  performed  and  complied  with all
                  agreements  and  conditions  contained  in the Loan  Documents
                  applicable to it and which are then in effect.



<PAGE>

         d.       Each of the  representations and warranties of each Loan Party
                  under  any Loan  Document  shall be true  and  correct  in all
                  material respects as if made on each loan Disbursement Date.

         e.       No  Default or Event of Default  shall  have  occurred  and be
                  continuing;  there shall have been no material  adverse change
                  in  the  condition   (financial  or  otherwise),   properties,
                  business,  or  operations  of any Loan Party since the date of
                  the financial statements most recently delivered to Bank prior
                  to the date of this  Agreement;  and no  provision of law, any
                  order of any Governmental Authority,  or any regulation,  rule
                  or interpretation thereof, shall have had any Material Adverse
                  Effect on the validity or enforceability of any Loan Document.

SECTION 3.        REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants,  and such representations and warranties shall
be deemed to be continuing representations and warranties during the entire life
of this  Agreement,  and so long as Bank shall have any commitment or obligation
to make any loans or issue any Letters of Credit,  if applicable  and so long as
any  Indebtedness  remains unpaid and  outstanding  under any Loan Document,  as
follows:

3.1      Authority. Each Loan Party and, if applicable, each of its partners and
         members who is not a natural Person is duly organized, validly existing
         and  in  good  standing  under  the  laws  of the  jurisdiction  of its
         organization  and is duly  qualified  and  authorized to do business in
         each other  jurisdiction  in which the  character  of its assets or the
         nature of its business makes such qualification necessary.

3.2      Due  Authorization.  Each  Loan  Party  has  all  requisite  power  and
         authority to execute,  deliver and perform its  obligations  under each
         Loan  Document  to which it is a party or is  otherwise  bound,  all of
         which have been duly authorized by all necessary action, and are not in
         contravention of law or the terms of any Loan Party's organizational or
         other governing documents.

3.3      Title to  Property.  Each Loan Party has good title to all property and
         assets purported to be owned by it,  including those assets  identified
         on the financial statements most recently delivered to Bank.

3.4      Encumbrances.  There  are no  security  interests  or  other  Liens  or
         encumbrances  on, and no financing  statements on file with respect to,
         any of the property or assets of any Loan Party,  except for  Permitted
         Encumbrances.

3.5      Subsidiaries.  Borrower has no Subsidiaries  except those  specifically
         disclosed in the Defined Terms.

3.6      Taxes.  Each Loan Party has filed,  on or before their  respective  due
         dates,  all  federal,  state,  local and foreign tax returns  which are
         required to be filed,  or has obtained  extensions  for filing such tax
         returns,  and is not  delinquent  in filing such returns in  accordance
         with such  extensions,  and has paid all taxes  which  have  become due
         pursuant to those  returns or pursuant to any  assessments  received by
         any such  party,  as the case may be, to the  extent  such  taxes  have
         become due,  except to the extent such tax payments are being  actively
         and diligently contested in good faith by appropriate proceedings,  and
         if  requested  by Bank,  have been  bonded or reserved in an amount and
         manner satisfactory to Bank.



<PAGE>

3.7      No-Defaults.  There exists no default (or event which,  with the giving
         of notice or passage of time, or both, would result in a default) under
         the  provisions of any instrument or agreement  evidencing,  governing,
         securing  or  otherwise  relating  to any  Debt of any  Loan  Party  or
         pertaining to any of the Permitted Encumbrances.

3.8      Enforceability of Agreement and Loan Documents.  Each Loan Document has
         been duly executed and delivered by duly authorized officer(s) or other
         representative(s)  of each  Loan  Party and  constitutes  the valid and
         binding  obligation of each Loan Party,  enforceable in accordance with
         its terms, except to the extent that enforcement thereof may be limited
         by applicable  bankruptcy,  reorganization,  insolvency,  moratorium or
         similar laws affecting the enforcement of creditors'  rights  generally
         at the time in effect.

3.9      Non-contravention. The execution, delivery and performance by each Loan
         Party of the Loan  Documents  to which  such  Loan  Party is a party or
         otherwise  bound,  are  not  in  contravention  of  the  terms  of  any
         indenture,  agreement or  undertaking to which any such Loan Party is a
         party or by which it is bound,  except to the  extent  that such  terms
         have been  waived or that  failure to comply  with any such terms would
         not have a Material Adverse Effect.

3.10     Actions, Suits, Litigation or Proceedings. There are no actions, suits,
         litigation  or  proceedings,  at law or in equity,  and no  proceedings
         before  any  arbitrator  or by or before  any  Governmental  Authority,
         pending,  or, to the best knowledge of Borrower,  threatened against or
         affecting  any  Loan  Party,  which,  if  adversely  determined,  could
         materially  impair the right of any Loan Party to carry on its business
         substantially as now conducted or could have a Material Adverse Effect.
         No Loan  Party is under  investigation  by, or is  operating  under any
         restrictions imposed by, any Governmental Authority.

3.11     Compliance   with  Laws.   Each  Loan  Party  has  complied   with  all
         Governmental Requirements, including, without limitation, Environmental
         Laws,  to the extent  that  failure to so comply  could have a Material
         Adverse Effect.

3.12     Consents,  Approvals and Filings,  Etc.  Except as have been previously
         obtained  or as  otherwise  expressly  provided in this  Agreement,  no
         authorization,  consent,  approval,  license,  qualification  or formal
         exemption from, or any filing,  declaration or  registration  with, any
         Governmental  Authority  and  no  material  authorization,  consent  or
         approval  from any other  Person,  is required in  connection  with the
         execution,  delivery  and  performance  by any  Loan  Party of any Loan
         Document  to which it is a party.  All such  authorizations,  consents,
         approvals, licenses, qualifications,  exemptions, filings, declarations
         and  registrations  which have previously been obtained or made, as the
         case may be, are in full  force and  effect and are not the  subject of
         any attack, or to the knowledge of Borrower,  any threatened attack, in
         any material respect, by appeal, direct proceeding or otherwise.

3.13     Environmental  Representations.   No  Loan  Party  has  used  Hazardous
         Materials  on, in,  under or otherwise  affecting  any real or personal
         property now or at any time owned,  occupied or operated by such Person
         or upon which such Person has a place of business which, in any manner,
         violates any Environmental  Law, to the extent any such violation could
         result in a  Material  Adverse  Effect,  and to the best of  Borrower's
         knowledge,  no prior or current  owner,  occupant or operator of any of
         such property does or has used any Hazardous  Materials on or affecting
         such property in any manner which violates any Environmental Law to the
         extent  that any such  violation  could  result in a  Material  Adverse
         Effect.  No Loan Party has received any notice of any  violation of any
         Environmental  Law, and to the best  knowledge of the  Borrower,  there
         have been no actions  commenced or threatened by any Person against any
         such  property  or against any Loan Party for  non-compliance  with any
         Environmental Law which could result in a Material Adverse Effect.



<PAGE>

3.14     Accuracy of Information.  All financial statements previously furnished
         to Bank have been prepared in accordance  with GAAP and fairly  present
         the   financial   condition  of  Borrower  and,  as   applicable,   the
         consolidated  financial  condition of Borrower and such other Person(s)
         as such  financial  statements  purport to present,  and the results of
         their respective operations as of the dates and for the periods covered
         thereby; and since the date(s) of said financial statements,  there has
         been no material adverse change in the financial  condition of Borrower
         or any other Person covered by such financial statements.

         Each Loan Party is solvent,  able to pay its debts as they mature,  has
         capital  sufficient  to carry on its  business  and has assets the fair
         market value of which exceed its liabilities, and no Loan Party will be
         rendered insolvent,  under-capitalized or unable to pay debts generally
         as they become due by the execution or performance of any Loan Document
         to which it is a party or by which it is otherwise bound.

SECTION 4.        AFFIRMATIVE COVENANTS

Borrower  covenants  and  agrees  that,  until all  instruments  and  agreements
evidencing   each  and  every  loan,   Letter  of  Credit  and  other  financial
accommodation by the Bank to the Borrower or any Loan Party are fully discharged
and terminated, and thereafter, so long as any Indebtedness remains outstanding,
it will, and, as applicable, it will cause each Loan Party within its control or
under common control to:

4.1      Preservation of Existence, Etc. Preserve and maintain its existence and
         preserve and maintain such of its rights,  licenses,  and privileges as
         are material to the business and  operations  conducted by it;  qualify
         and remain qualified to do business in each  jurisdiction in which such
         qualification  is material to its business and  operations or ownership
         of its  properties,  continue  to  conduct  and  operate  its  business
         substantially   as  conducted  and  operated  during  the  present  and
         preceding  calendar year; at all times  maintain,  preserve and protect
         all of its franchises and trade names and preserve all the remainder of
         its  property  and keep  the same in good  repair,  working  order  and
         condition;  and from time to time make, or cause to be made, all needed
         and   proper   repairs,   renewals,   replacements,   betterments   and
         improvements thereto.

4.2      Keeping of Books;  Audits of  Collateral;  Fees.  Keep proper  books of
         record and account in which full and correct  entries  shall be made of
         all of its financial  transactions  and its assets and businesses so as
         to  permit  the  presentation  of  financial   statements  prepared  in
         accordance  with GAAP;  and permit  Bank,  or its  representatives,  at
         reasonable  times and  intervals,  at Borrower's  cost and expense,  to
         examine its books and records and to discuss its financial matters with
         its officers,  employees and independent  certified public accountants;
         and  permit  Bank  from  time  to time to  audit  Borrower's  accounts,
         inventory,  or other  Collateral,  provided  that such  audits  will be
         conducted upon reasonable notice. Borrower agrees to reimburse Bank, on
         demand,  for customary and  reasonable  fees and costs incurred by Bank
         for such audits,  and for each  appraisal of  Collateral  and financial
         analysis and examination of Borrower performed from time to time by its
         agents.

4.3      Reporting  Requirements.  Furnish to Bank,  or cause to be furnished to
         Bank, the following:

         a.       as  soon  as  possible,  and in any  event  within  three  (3)
                  calendar  days  after  becoming  aware  of the  occurrence  or
                  existence of each Default or Event of Default hereunder or any
                  material adverse change in the financial condition of any Loan
                  Party, a written  statement of the chief financial  officer of
                  Borrower  (or  in his or her  absence,  a  responsible  senior
                  officer of  Borrower),  setting forth details of such Default,
                  Event of Default or change,  and the action which Borrower has
                  taken,  or has caused to be taken,  or proposes to take, or to
                  cause to be taken, with respect thereto;

         b.       as soon as available, and in any event within ninety (90) days
                  after  and as of the end of  each  fiscal  year  of  Borrower,
                  audited financial statements of Borrower and such other of the
                  Loan Parties as may be required by the Bank, consolidated,  as
                  applicable,  including  a  balance  sheet,  income  statement,
                  statement of profit and loss, surplus reconciliation statement
                  and  statement  of cash flows,  for and as of such fiscal year
                  then ending and  including  such other  comments and financial
                  details  as are  usually  included  in similar  reports.  Such
                  financial  statements  shall be - prepared in accordance  with
                  GAAP by independent certified public accountants of recognized
                  standing  selected  by  Borrower  and  approved  by  Bank  and
                  containing  unqualified  opinions  as to the  fairness  of the
                  statements therein contained.

         c.       as soon as available, and in any event within thirty (30) days
                  after and as of the end of each calendar  month  including the
                  last such reporting period of each of Borrower's fiscal years,
                  financial  statements  of Borrower  and such of the other Loan
                  Parties  as may be  required  by the Bank,  for and as of such
                  reporting period, including a balance sheet, income statement,
                  statement of profit and loss, surplus reconciliation statement
                  and  statement  of cash  flows  for  and as of such  reporting
                  period  then  ending  and for and as of  that  portion  of the
                  fiscal year then ending, in each case,  prepared and certified
                  by the chief  financial  officer of Borrower (or in his or her
                  absence,  a responsible  senior  officer of Borrower)  and, as
                  applicable, each other Loan Party as to consistency with prior
                  financial  reports  and  accounting   periods,   accuracy  and
                  fairness of presentation

         d.       as soon as available, and in any event within thirty (30) days
                  prior  to end of each  fiscal  year  of  Borrower,  an  annual
                  proposed  budget prepared and certified by the chief financial
                  officer of  Borrower,  and  completed  in such  detail as Bank
                  shall require, in Bank's sole discretion.

         e.       as soon as available, and in any event within twenty (20) days
                  after  and  as of the  end of  each  calendar  month,  monthly
                  accounts  payable aging and accounts  receivable aging reports
                  prepared  and  certified  by the chief  financial  officer  of
                  Borrower,  and completed in such detail as Bank shall require,
                  in Bank's sole discretion.

         f.       concurrently  with each delivery of the  Financial  Statements
                  required by this section, furnish to the Bank a certificate of
                  its chief executive or financial officer stating that no Event
                  of Default or Default  has  occurred,  or if any such Event of
                  Default or Default  exists,  stating the nature  thereof,  the
                  period of  existence  thereof  and what  action  the  Borrower
                  proposes to take with respect thereto.

         g.       twenty (20) days after the end of each calendar month,  (i) an
                  Inventory  report  as of the end of the  preceding  month in a
                  form satisfactory to the Bank, in Bank's sole discretion,  and
                  (ii) a  certificate  in  the  form  required  by  Bank  and as
                  otherwise  set  forth  in  the  Advance   Formula   Agreement,
                  confirming that the aggregate  unpaid  principal amount of all
                  Revolving Loans and Reimbursement  Obligations does not exceed
                  the  limitations  as then in effect  pursuant  to the  Advance
                  Formula Agreement (or, if such is not the case, accompanied by
                  a prepayment of the Revolving Credit Note sufficient in amount
                  to  reduce  the  aggregate  unpaid  principal  amount  of  all
                  Revolving Loans and Reimbursement  Obligations to or below the
                  amount of any such  limitations  as set  forth in the  Advance
                  Formula  Agreement) and confirming  that the aggregate  unpaid
                  principal  balance of the  Revolving  Loans and  Reimbursement
                  Obligations does not exceed the Maximum Revolving Credit Loan.


<PAGE>


4.4      Financial  Covenants.  Maintain all financial covenants set forth below
         (for purposes of the financial  covenants,  definitions for capitalized
         terms not otherwise defined in this Agreement follow the covenants):

         (a)      Tangible Net Worth.

                  (i)      Maintain a minimum  Tangible  Net Worth from the date
                  of this Agreement through December 2003 of $2,200,000.00; and

                  (ii)     Commencing  January 2004, and continuing  each fiscal
                  quarter  thereafter  through the Termination Date,  maintain a
                  Tangible Net Worth equal to the minimum required  Tangible Net
                  Worth for the  preceding  fiscal  quarter,  plus fifty percent
                  (50%) of Net  Income  of  Borrower  for the  preceding  fiscal
                  quarter.

         (b)      Debt-to-Tangible   Net  Worth   Ratio.   Maintain   a  maximum
                  Debt-to-Tangible Net Worth Ratio at all times of not more than
                  the ratio set forth below during the corresponding  period set
                  forth below:

<TABLE>
<CAPTION>
<S>                                                                                     <C>
                                              Period                                     Ratio

                         From the date hereof through November 2003                     6.00:1
                         December 2003 through February 2004                            5.50:1
                         March 2004 through May 2004                                    5.10:1
                         June 2004 through August 2004                                  4.70:1
                         September 2004 through November 2004                           4.30:1
                         December 2004 through February 2004                            3.90:1
                         March 2005 through May 2005                                    3.60:1
                         June 2005 through August 2005                                  3.30:1
                         September 2005 to November 2005                                3.00:1
</TABLE>

         (c)      Net Income.  Maintain a minimum  quarterly Net Income from the
                  date of this Agreement  through the Termination  Date for each
                  quarter  beginning with the quarter ending  September 30, 2003
                  of $-0-.

4.5      Further Assurances;  Financing Statements.  Furnish Bank, at Borrower's
         cost and expense,  upon Bank's request and in form satisfactory to Bank
         (and execute and deliver or cause to be executed and  delivered),  such
         additional pledges,  assignments,  mortgages, Lien instruments or other
         security  instruments,  consents,  acknowledgments,  subordinations and
         financing  statements covering any or all of the Collateral required by
         Bank to secure any  Indebtedness  together with such other documents or
         instruments  as Bank may require to effectuate  more fully the purposes
         of any Loan Document.

4.6      Insurance.  Maintain insurance coverage by insurers  acceptable to Bank
         on its physical assets and against other business risks in such amounts
         and of such types as are  customarily  carried by companies  similar in
         size and nature or as may  otherwise  be required  by Bank,  and in the
         event of acquisition of additional  property,  real or personal,  or of
         the  incurrence  of  additional  risks  of any  nature,  increase  such
         insurance  coverage  in such  manner  and to  such  extent  as  prudent
         business  judgment and present practice would dictate;  and in the case
         of all  policies  covering  property  subject to any Loan  Document  or
         property  in which the Bank shall  have a Lien of any kind  whatsoever,
         other than those policies  protecting  against casualty  liabilities to
         strangers,  all such  insurance  policies  shall  provide that the loss
         payable  thereunder  shall be  payable  to  Borrower  (or other  Person
         providing  Collateral) and Bank, with  mortgagee's  clauses in favor of
         and satisfactory to Bank for all such policies, and such policies shall
         also  provide that they may not be canceled or changed  without  thirty
         (30) days' prior written notice to Bank.  Upon the request of Bank, all
         of said policies, or copies thereof, including all endorsements thereon
         and those required hereunder, shall be deposited with Bank.


<PAGE>

4.7      Compliance  with ERISA.  In the event that any Loan Party or any of its
         Subsidiaries  maintain(s)  or  establish(es)  a Pension Plan subject to
         ERISA,  (a)  comply  in all  material  respects  with all  requirements
         imposed  by ERISA as  presently  in  effect or  hereafter  promulgated,
         including,  but  not  limited  to,  the  minimum  funding  requirements
         thereof;  (b) promptly notify Bank upon the occurrence of a "reportable
         event" or "prohibited transaction" within the meaning of ERISA, or that
         the PBGC or any Loan Party has instituted or will institute proceedings
         to terminate  any Pension  Plan,  together  with a copy of any proposed
         notice of such event  which may be  required to be filed with the PBGC;
         and (c)  furnish  to Bank (or cause the plan  administrator  to furnish
         Bank)  a  copy  of the  annual  return  (including  all  schedules  and
         attachments) for each Pension Plan covered by ERISA, and filed with the
         Internal Revenue Service by any Loan Party not later than ten (10) days
         after such report has been so filed.

4.8      Environmental Covenants. Comply with all applicable Environmental Laws,
         and  maintain  all  permits,  licenses  and  approvals  required  under
         applicable  Environmental Laws, where the failure to do so could have a
         Material Adverse Effect.  Promptly notify Bank, in writing,  as soon as
         Borrower becomes aware of any condition or circumstance which makes any
         of the  environmental  representations  or warranties set forth in this
         Agreement  incomplete,  incorrect or inaccurate in any material respect
         as of any date; and promptly provide to Bank,  immediately upon receipt
         thereof,  copies  of any  material  correspondence,  notice,  pleading,
         citation, indictment,  complaint, order, decree, or other document from
         any source asserting or alleging a violation of any  Environmental  Law
         by any Loan Party,  or of any  circumstance or condition which requires
         or may  require,  a  financial  contribution  by any Loan  Party,  or a
         clean-up, removal, remedial action or other response by or on behalf of
         any Loan  Party,  under  applicable  Environmental  Law, or which seeks
         damages or civil, criminal or punitive penalties from any Loan Party or
         any violation or alleged violation of any  Environmental  Law. Borrower
         hereby  agrees to  indemnify,  defend and hold Bank,  and any of Bank's
         past, present and future officers, directors, shareholders,  employees,
         representatives  and  consultants,  harmless  from any and all  claims,
         losses, damages, suits, penalties, costs, liabilities,  obligations and
         expenses (including, without limitation,  reasonable legal expenses and
         attorneys' fees, whether inside or outside counsel is used) incurred or
         arising out of any claim,  loss or damage of any property,  injuries to
         or death of any  persons,  contamination  of or adverse  effects on the
         environment, or other violation of any applicable Environmental Law, in
         any  case,  caused  by any  Loan  Party  or in any way  related  to any
         property  owned or operated by any Loan Party or due to any acts of any
         Loan Party or any of its officers, directors, shareholders,  employees,
         consultants  and/or  representatives   INCLUDING  ANY  CLAIMS,  LOSSES,
         DAMAGES, SUITS, PENALTIES, COSTS, LIABILITIES, OBLIGATIONS OR EXPENSES,
         RESULTING  FROM  BANK'S  OWN  NEGLIGENCE;  provided  however,  that the
         foregoing  indemnification shall not be applicable,  and Borrower shall
         not be liable for any such claims, losses,  damages,  suits, penalties,
         costs, liabilities, obligations or expenses, to the extent (but only to
         the  extent)  the same  arise or result  from any gross  negligence  or
         willful misconduct of Bank or any of its agents or employees.



<PAGE>

SECTION 5.        NEGATIVE COVENANTS

Borrower  covenants  and  agrees  that,  until all  instruments  and  agreements
evidencing   each  and  every  loan,   Letter  of  Credit  and  other  financial
accommodation by the Bank to the Borrower or any Loan Party are fully discharged
and terminated, and thereafter, so long as any Indebtedness remains outstanding,
it will not,  and it will not allow any Loan Party  within its  control or under
common control to, without the prior written consent of the Bank:

5.1      Capital  Structure;   Business  Objects  or  Purpose;   Mergers;  Asset
         Disposition;  Acquisitions.  Purchase,  acquire  or  redeem  any of its
         equity  ownership  interests;  or  enter  into  any  reorganization  or
         recapitalization; or reclassify its equity ownership interests; or make
         any  material  change in its  capital  structure  or  general  business
         objects or  purpose;  or change  its name,  or enter into any merger or
         consolidation, whether or not the surviving entity thereunder; or sell,
         lease, transfer,  relocate or dispose of all, substantially all, or any
         material part of its assets  (whether in a single  transaction  or in a
         series of  transactions);  or purchase or  otherwise  acquire or become
         obligated for the purchase of all or substantially all of the assets or
         business  interests  of any  Person  or any  shares  of  stock or other
         ownership  interests of any Person or in any other manner effectuate or
         attempt to effectuate an expansion of present  business by acquisition.
         Notwithstanding  the  foregoing,  nothing  in this  Section  5.1  shall
         prohibit or otherwise  restrict  Borrower  from issuing  common  stock,
         preferred  stock  (including  a newly  designated  series of  preferred
         stock), options,  warrants and other equity securities to raise capital
         or as consideration in connection with a business  transaction  entered
         into in the ordinary course of business;  provided,  however,  that any
         such  action by  Borrower  (i) does not  result in a  violation  of any
         covenants, representations or warranties contained in this Agreement or
         any other Loan Document and (ii) does not result in any material change
         in ownership of Borrower unless Bank is notified by Borrower in writing
         at least thirty (30) days prior to any such action by Borrower.

5.2      Guaranties.  Guarantee, endorse, or otherwise become secondarily liable
         for or upon the  obligations  or Debt of others  (whether  directly  or
         indirectly), except guaranties in favor of and satisfactory to Bank and
         endorsements  for  deposit  or  collection  in the  ordinary  course of
         business.

5.3      Debt. Become or remain obligated for any Debt, except: Indebtedness and
         other Debt from time to time  outstanding and owing to Bank;  unsecured
         trade,  utility or  non-extraordinary  accounts  payable arising in the
         ordinary  course  of  business;   Subordinated  Debt;   purchase  money
         indebtedness  incurred for the purpose of purchasing or acquiring fixed
         assets;  and Debt (including,  without  limitation,  capitalized  lease
         obligations)   outstanding  as  of  the  date  hereof  if  specifically
         disclosed in the most recent financial statements delivered to the Bank
         prior to the date hereof.

5.4      Encumbrances.  Create,  incur,  assume or suffer to exist any Lien upon
         any of its property or assets, whether now owned or hereafter acquired,
         except for Permitted Encumbrances.

5.5      Investments;  Extensions of Credit. Make or allow to remain outstanding
         any investment  (whether such  investment  shall be of the character of
         investment  in shares  of stock,  evidences  of  indebtedness  or other
         securities  or otherwise)  in, or any loans,  advances or extensions of
         credit to, any  Person,  other than (a)  Borrower's  current  ownership
         interests  in  those  Subsidiaries  of  Borrower,  if  any,  which  are
         specifically  disclosed in the definition of Subsidiaries,  and (b) any
         investment in direct obligations of the United States of America or any
         agency  thereof,   or  in  certificates  of  deposit  issued  by  Bank,
         maintained  consistent  with Borrower's or such  Subsidiary's  business
         practices prior to the date hereof;  provided,  that no such investment
         shall  mature  more  than one (1) year  after the date when made or the
         issuance thereof, and (c) marketable, traded stock and other securities
         issued by entities  organized  under the laws of the United States or a
         state thereof.


<PAGE>


5.6      Pension Plans.  Except in compliance with this  Agreement,  enter into,
         maintain, or make contribution to, directly or indirectly,  any Pension
         Plan that is subject to ERISA.

5.7      Subordinate  Indebtedness.  Subordinate any indebtedness due to it from
         any Person to indebtedness of other creditors of such Person.

SECTION 6.        EVENTS OF DEFAULT

6.1      Events of Default.  The occurrence or existence of any of the following
         conditions or events shall constitute an "Event of Default" hereunder:

         (a)      non-payment of any principal,  interest or other sums due upon
                  the  Indebtedness  within five (5) days following the date due
                  by maturity,  acceleration or otherwise, or failure to pay any
                  Indebtedness owing on a demand basis upon demand;

         (b)      any failure or neglect by Borrower or any Loan Party to comply
                  with,  or  breach  of or  default  under,  any of  the  terms,
                  conditions,   covenants  or  agreements   set  forth  in  this
                  Agreement or any other Loan Document, and such failure, breach
                  or default is not cured within ten (10) days following written
                  demand by Bank;

         (c)      any representation,  warranty,  financial statement,  or other
                  information  made,  given or furnished to Bank by or on behalf
                  of any Loan Party in any Loan  Document  shall be, or prove to
                  have been,  untrue or incorrect  in any material  respect when
                  made, given or furnished;

         (d)      any  change  in the  executive  management  (i.e.,  the  chief
                  executive officer,  chief operating officer or chief financial
                  officer),  or any change in the majority  ownership or control
                  of  Borrower,   whether  by  reason  of   incapacity,   death,
                  resignation,  termination or otherwise  which,  in Bank's sole
                  judgment, could become a Material Adverse Effect;

         (e)      any   expiration,   or  termination  by  Samsung   Corporation
                  ("Samsung") of, that certain Distribution  Agreement ("Samsung
                  Agreement"),  dated August 30, 1999,  by and between  Borrower
                  and  Samsung  Corporation,  unless (i)  Samsung  continues  to
                  operate  and  honor  the  terms  of  the  Samsung   Agreement,
                  notwithstanding  any such termination or expiration,  and (ii)
                  the Samsung Agreement is renewed,  extended or replaced with a
                  comparable  agreement  within  thirty (30) days  following the
                  termination or expiration thereof ;

         (f)      any termination or breach of any guaranty,  pledge, collateral
                  assignment or subordination  agreement  relating to all or any
                  part of the Indebtedness;

         (g)      any   failure  by   Borrower  to  pay  when  due  any  of  its
                  indebtedness  (other than to the Bank) or in the observance or
                  performance of any term, covenant or condition in any document
                  evidencing, securing or relating to such indebtedness;


<PAGE>

         (h)      any levy or writ of  attachment or  garnishment  or other like
                  judicial  process is filed or issued upon the  Borrower or any
                  of the Collateral,  including  without limit,  any accounts of
                  Borrower  with the  Bank,  involving  any  indebtedness  in an
                  amount in excess of $50,000.00,  which is not stayed or lifted
                  within  sixty  (60) days  following  the date filed or levied;
                  provided,  however,  that  Borrower  shall  provide  Bank with
                  written notice of any such filing or issuance  notwithstanding
                  the  foregoing   limitation  on  the  amount  of  indebtedness
                  involved;

         (i)      any loss, theft,  substantial damage or destruction to, or of,
                  any Collateral,  which in Bank's sole judgment, could become a
                  Material Adverse Effect;

         (j)      any sale or other  disposition by Borrower of any  substantial
                  portion of its assets or property or voluntary  suspension  of
                  the  transaction of business by Borrower or any Loan Party, or
                  dissolution, termination of existence, merger or consolidation
                  by Borrower, or any Loan Party;

         (k)      if Bank deems the margin of Collateral  insufficient or itself
                  insecure, in good faith believing that the prospect of payment
                  of the  Indebtedness  or  performance  of  this  Agreement  is
                  impaired  or shall fear  deterioration,  removal,  or waste of
                  Collateral; or

         (l)      if (i) Borrower applies for or consents to the appointment of,
                  or the taking of possession by, a receiver, custodian, trustee
                  or liquidator of itself or of all or a substantial part of its
                  property,   (ii)  admits  in  writing  its  inability,  or  be
                  generally unable, to pay its debts as they become due or cease
                  operations  of its  present  business,  (iii)  makes a general
                  assignment  for the  benefit of  creditors,  (iv)  commences a
                  voluntary case under any state or Federal  bankruptcy laws (as
                  now or hereafter in effect),  (v) is adjudicated a bankrupt or
                  insolvent,  (vi) files a petition seeking to take advantage of
                  any other law  providing  for the  relief  of  debtors,  (vii)
                  acquiesces to, or fails to have dismissed,  within ninety (90)
                  days,  any petition filed against it in any  involuntary  case
                  under such bankruptcy laws, or (viii) takes any action for the
                  purpose of effecting any of the foregoing.

6.2      Remedies  Upon Event of Default.  Upon the  occurrence  and at any time
         during  the  existence  or  continuance  of any Event of  Default,  but
         without  impairing  or  otherwise  limiting  the Bank's right to demand
         payment of all or any portion of the  Indebtedness  which is payable on
         demand,  at Bank's option,  Bank may give notice to Borrower  declaring
         all  or  any  portion  of  the   Indebtedness   remaining   unpaid  and
         outstanding,  whether under the notes  evidencing the  Indebtedness  or
         otherwise, to be due and payable in full without presentation,  demand,
         protest, notice of dishonor, notice of intent to accelerate,  notice of
         acceleration  or other  notice  of any kind,  all of which  are  hereby
         expressly  waived,  whereupon all such  Indebtedness  shall immediately
         become due and payable.  Furthermore,  upon the occurrence of a Default
         or Event of Default and at any time during the existence or continuance
         of any Default or Event of Default,  but without impairing or otherwise
         limiting the right of Bank,  if reserved  under any Loan  Document,  to
         make or withhold  financial  accommodations  at its discretion,  to the
         extent not yet  disbursed,  any  commitment by Bank to make any further
         loans or, if  applicable,  issue any  further  Letters of Credit  shall
         automatically  terminate.  The  foregoing  rights and  remedies  are in
         addition  to  any  other  rights,  remedies  and  privileges  Bank  may
         otherwise  have or which may be  available  to it,  whether  under this
         Agreement, any other Loan Document, by law, or otherwise.

6.3      Waiver of Defaults.  No Default or Event of Default  shall be waived by
         Bank except in a written  instrument  specifying the scope and terms of
         such  waiver and  signed by an  authorized  officer  of Bank,  and such
         waiver  and  shall be  effective  only  for the  specific  time(s)  and
         purpose(s) given. No single or partial exercise of any right,  power or
         privilege  hereunder,  or any  delay  in the  exercise  thereof,  shall
         preclude other or further  exercise of Bank's rights.  No waiver of any
         Default  or Event of  Default  shall  extend  to any  other or  further
         Default  or Event of  Default.  No  forbearance  on the part of Bank in
         enforcing  any of Bank's  rights or  remedies  under any Loan  Document
         shall  constitute a waiver of any of its rights or  remedies.  Borrower
         expressly  agrees  that this  Section  may not be waived or modified by
         Bank by course of performance, estoppel or otherwise.



<PAGE>

6.4      Discretionary Credit and Credit Payable Upon Demand. TO THE EXTENT THAT
         ANY OF THE  INDEBTEDNESS  SHALL,  AT ANY TIME,  BE PAYABLE UPON DEMAND,
         NOTHING CONTAINED IN THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT,  SHALL
         BE  CONSTRUED TO PREVENT BANK FROM MAKING  DEMAND,  WITHOUT  NOTICE AND
         WITH OR WITHOUT  REASON,  FOR  IMMEDIATE  PAYMENT OF ALL OR ANY PART OF
         SUCH  INDEBTEDNESS  AT ANY TIME OR TIMES,  WHETHER  OR NOT A DEFAULT OR
         EVENT OF DEFAULT HAS OCCURRED OR EXISTS.  IN THE EVENT THAT SUCH DEMAND
         IS  MADE  UPON  ANY  PORTION  OF THE  INDEBTEDNESS,  THE  BANK,  AT ITS
         ELECTION, MAY TERMINATE ANY COMMITMENT TO MAKE ANY FURTHER LOANS OR, IF
         APPLICABLE, ISSUE ANY FURTHER LETTERS OF CREDIT UNDER THIS AGREEMENT OR
         OTHERWISE.  FURTHERMORE, TO THE EXTENT ANY LOAN DOCUMENT AUTHORIZES THE
         BANK,  AT ITS  DISCRETION,  TO MAKE  OR TO  DECLINE  TO MAKE  FINANCIAL
         ACCOMMODATIONS TO THE BORROWER,  NOTHING CONTAINED IN THIS AGREEMENT OR
         ANY OTHER LOAN  DOCUMENT  SHALL BE  CONSTRUED  TO LIMIT OR IMPAIR  SUCH
         DISCRETION OR TO COMMIT OR OTHERWISE OBLIGATE THE BANK TO MAKE ANY SUCH
         FINANCIAL ACCOMMODATION.

SECTION 7.        MISCELLANEOUS

7.1      Governing  Law.  Each  Loan  Document  shall  be  deemed  to have  been
         delivered  in and shall be governed by and  construed  and  enforced in
         accordance  with the laws of the State of Texas,  except to the  extent
         that the UCC,  other  personal  property  law or real  property  law of
         another  jurisdiction  where  Collateral is located is applicable,  and
         except to the extent expressed to the contrary in any Loan Document.

7.2      Costs and Expenses.  Borrower shall pay Bank, on demand,  all costs and
         expenses, including, without limitation, reasonable attorneys' fees and
         legal expenses (whether inside or outside counsel is used), incurred by
         Bank in perfecting, revising, protecting or enforcing any of its rights
         or remedies  against  any Loan Party or any  Collateral,  or  otherwise
         incurred by Bank in connection  with any Default or Event of Default or
         the  enforcement of the Loan Documents or the  Indebtedness.  Following
         Bank's  demand  upon  Borrower  for the  payment  of any such costs and
         expenses,  and until the same are paid in full,  the  unpaid  amount of
         such costs and expenses shall  constitute  Indebtedness  and shall bear
         interest at the highest  default rate of interest  provided in any Loan
         Document.

7.3      Successors and Assigns; Participation.  This Agreement shall be binding
         upon and shall  inure to the  benefit  of  Borrower  and Bank and their
         respective  successors and assigns.  The foregoing  shall not authorize
         any assignment or transfer by Borrower of any of its respective rights,
         duties or obligations  hereunder,  such  assignments or transfers being
         expressly  prohibited.  Bank,  however,  may freely assign,  whether by
         assignment,  participation  or  otherwise,  its rights and  obligations
         hereunder, and is hereby authorized to disclose to any such assignee or
         participant  (or proposed  assignee or  participant)  any  financial or
         other  information  in its knowledge or  possession  regarding any Loan
         Party or the Indebtedness.



<PAGE>

7.4      Reliance on and Survival of Various Provisions.  All terms,  covenants,
         agreements,  representations  and  warranties of any Loan Party made in
         any Loan Document, or in any certificate,  report,  financial statement
         or other  document  furnished  by or on  behalf  of any  Loan  Party in
         connection with any Loan Document,  shall be deemed to have been relied
         upon by Bank, notwithstanding any investigation heretofore or hereafter
         made by Bank or on Bank's behalf, and those covenants and agreements of
         Borrower  set forth in  Section  4.8  hereof  (together  with any other
         indemnities of Borrower contained elsewhere in any Loan Document) shall
         survive the  termination of this Agreement and the repayment in full of
         the Indebtedness.

7.5      Complete  Agreement;   Conflicts.   This  Agreement,   the  other  Loan
         Documents,  and any commitment  letter  previously  issued by Bank with
         respect  thereto  (provided that in the event of any  inconsistency  or
         conflict  between this Agreement and the other Loan  Documents,  on one
         hand, and such commitment letter, on the other hand, this Agreement and
         the Loan Documents shall control),  contain the entire agreement of the
         parties thereto and supercede all prior  agreements and  understandings
         related to the subject matter hereof,  and none of the parties shall be
         bound by anything not expressed in writing.  In the event that,  and to
         the extent that,  any of the terms,  conditions or provisions of any of
         the other Loan Documents are inconsistent  with or in conflict with any
         of  the  terms,  conditions  or  provisions  of  this  Agreement,   the
         applicable  terms,  conditions and  provisions of this Agreement  shall
         govern and control.  Any amendments or modifications hereto shall be in
         writing signed by all parties.

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

7.7      WAIVER OF JURY TRIAL. BANK AND BORROWER EACH ACKNOWLEDGE THAT THE RIGHT
         TO TRIAL BY JURY IS A  CONSTITUTIONAL  ONE,  BUT THAT IT MAY BE WAIVED.
         EACH OF  THEM,  AFTER  CONSULTING  OR  HAVING  HAD THE  OPPORTUNITY  TO
         CONSULT,  WITH  COUNSEL OF THEIR  CHOICE,  KNOWINGLY,  VOLUNTARILY  AND
         INTENTIONALLY  WAIVES  ANY RIGHT  EITHER OF THEM MAY HAVE TO A TRIAL BY
         JURY IN ANY  LITIGATION  BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT
         OR ANY OF THE  TRANSACTIONS  CONTEMPLATED  BY THE LOAN DOCUMENTS OR ANY
         COURSE OF CONDUCT,  DEALING,  STATEMENTS (WHETHER ORAL OR WRITTEN),  OR
         ACTION OF EITHER OF THEM.  THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE
         BEEN  MODIFIED  IN ANY  RESPECT OR  RELINQUISHED  BY BANK OR  BORROWER,
         EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM.

7.8      NO ORAL AGREEMENTS.  THIS AGREEMENT AND THE OTHER "LOAN AGREEMENTS" (AS
         DEFINED IN SECTION  26.02(A)(2)  OF THE TEXAS BUSINESS & COMMERCE CODE,
         AS AMENDED) REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, AND THIS
         AGREEMENT AND THE OTHER WRITTEN LOAN AGREEMENTS MAY NOT BE CONTRADICTED
         BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS  OR SUBSEQUENT  ORAL  AGREEMENTS
         BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
         PARTIES.



               (The balance of this page intentionally left blank)




<PAGE>

WITNESS the due execution hereof as of the day and year first above written.

<TABLE>
<CAPTION>
<S>                                                       <C>
BANK:                                                     BORROWER:
----                                                      --------
COMERICA BANK                                             GVI SECURITY, INC.,
                                                          D/B/A/ Samsung CCTV
                                                          a Delaware corporation

By:      /s/ Jeff Bundy                                   By:      /s/ Thomas Wade
   -----------------------------------------                  -----------------------------------------
         Jeff Bundy                                           Thomas Wade
         Assistant Vice President - Texas Division            President, CEO and Chairman
                                                              of the Board

ADDRESS:                                                  ADDRESS:
-------                                                   -------
P.O. Box 650282                                           1621 West Crosby Street
Dallas, Texas 75265-0282                                  Suite 104
Mail Code 6596                                            Carrollton, Texas 75006

Attn:    Jeff Bundy                                       Attn:    /s/ John T Lagnese
                                                                 --------------------
Facsimile:  214-890-5186                                  Facsimile         972-245-7333
                                                                   ---------------------
</TABLE>

<PAGE>

                                    EXHIBIT A

                                 EXISTING LIENS

                                      NONE