EAB HAUPPAUGE BRANCH
730 Veteran's Memorial Highway
Hauppauge NY 11788
Phone: 516-360-7110
Fax: 516-360-7112

     International Smart Sourcing, Inc.                         December 1, 1999
     320 Broad Hollow Road
     Farmingdale, NY 1 1735

      Re:     $1,250,000 borrowing base line of credit
              $500,000 term loan line

     Gentlemen:

               European  American Bank ("EAB") is pleased to advise you it holds
      available for  International  Smart  Sourcing,  Inc. (the  "Borrower"),  a
      corporation  organized and in good standing under the laws of the State of
      New York,  (I) a borrowing  base line of credit (the "Line") in the amount
      of  $1,250,000  and (ii) a $500,000  term loan line (the "Term Loan Line";
      together  with the  Line  being  collectively,  the  "Credit  Faculties"),
      subject to the following terms and conditions:

               1.      DESCRIPTION OF THE LINE:
                       -----------------------

                       Loans provided under the Line shall be evidenced by EAB's
      standard Master Note (the "Note") in the amount of $1,250,000,  which Note
      shall bear  interest at a rate equal to 1/4% in excess of EAB's Prime Rate
      (the rate of  interest  stated by EAB to be its Prime Rate in effect  from
      time to time and adjusted  when said Prime Rate  changes)  computed on the
      basis of actual days elapsed in a 360 day year.

                       Interest on the unpaid principal balance of the Note from
      time to time outstanding shall be payable monthly in arrears commencing on
      the first day of the month  following  the date of the first advance under
      the Note. Any advance under the Line made by EAB in its  discretion  shall
      be in an amount not less than $50,000 and the Borrower may prepay, in part
      or in full, AT ANY TIME any loans outstanding under the Line in increments
      of not less than $50,000 without premium or penalty.

                       Notwithstanding  any  provisions  herein to the contrary,
      the maximum  availability  under the Credit Facilities shall not exceed an
      amount determined with application to the following borrowing base formula
      (the "Formula"):

                       The sum of (i)  eighty  percent  (80%) of the  borrower's
      "Eligible  Accounts  Receivable",  that is, all  accounts of the  Borrower
      dated not more than ninety (90) days from their respective  invoice dates,
      excluding those accounts deemed  ineligible by EAB in its soles reasonable
      discretion;  and (ii) the  lesser  of  fifty  percent  (50%) of the sum of
      Borrower's "Eligible Inventory" or $500,000 (the "Formula").  In addition,
      if fifty  percent  (50%) of an account is dated more than Ninety (90) days
      then
<PAGE>

     the entire amount shall be deemed ineligible.  Terms used in this paragraph
     shall  have  the  meaning  given  to  such  terms  in  the  Borrowing  Base
     Certificate,  Identified  herein.  The  aggregate of all advances and loans
     under the Line shall at no time exceed the  availability  under the Formula
     and the Borrower shall pay to EAB promptly after demand such amounts as may
     be  necessary  from time to time to reduce the  aggregate of all such loans
     and advances to an amount below the availability under the Formula.

               2.      Description of the Term Loan Line:
                       ---------------------------------

                       Availability  under the Term Loan Line  shall be for term
      loans from EAB or WASCO Funding Corp. ("WASCO"), EAB's subsidiary.

                       Term  Loans  provided  under the Term Loan Line  shall be
      evidenced  by EAB's  standard  Commercial  Note in the amount of each term
      loan thereunder and shall bear interest,  payable monthly in arrears, at a
      rate equal to l~2% in excess of EAB's Prime Rate  computed on the basis of
      actual days elapsed in a 360 day year.  Each term loan provided  under the
      Term Loan Line shall  mature five (5) years after its closing and shall be
      repayable  in  sixty  (60)  equal,  consecutive  monthly  installments  of
      principal and interest.

  The  purpose  of the Term Loan Line  shall be to  finance equipment purchases.


                       The  Borrower  acknowledges  and  agrees  that the Credit
      Facilities  are  uncommitted  and requests for advances or  EXTENSIONS  OF
      CREDIT  THEREUNDER  SHALL BE APPROVED IN THE  DISCRETION OF EAB, WHICH MAY
      REFUSE TO MAKE AN EXTENSION of credit under the Credit  Facilities  at any
      time without prior notice to the  Borrower,  and that the  performance  or
      compliance by the Borrower of the agreements  contained in this letter, or
      in any other document or agreement evidencing or securing such advances or
      extensions of credit, shall not obligate EAB to make an advance or provide
      an extension of credit thereunder.

                       Subject to the terms and  conditions  hereof,  the Credit
Facilities shall be available until June 30, 2000.

               3.      Guarantors:

                       Repayment  of  all  loans,   extensions   of  credit  and
     financial accommodations provided under the Credit Facilities together with
     interest and costs thereon  shall be  guaranteed,  by  Electronic  Hardware
     Corp, ("Electronic"), International Smart Sourcing Corp. ("International',)
     and Compact Disk Packaging Corp.  ("Compact") (the "Corporate  Guarantors")
     pursuant to EAB's standard Guarantee of All Liability.

                       Repayment  of all term  loans,  extensions  of credit and
      financial  accommodations  provided under the Term Loan Line together with
      interest and costs thereon  shall be  guaranteed,  by Andrew L.  Franzone,
      Sr.,  Harry  Goodman and David L. Kassel  (collectively,  the  "Individual
      Guarantors") pursuant to EAB's standard Guarantee of All Liability.

             4. Purpose of the Line:

                       The  purpose  of the  Line  shall be to  provide  working
capital support for all inventory and accounts.

             5.      Security for the Credit Facilities:

                       The  Credit  Facilities  shall  be  secured  by  a  first
      priority  security  interest in all inventory and accounts of the Borrower
      and the Corporate  Guarantors  pursuant to EAB's standard General Security
      Agreement and duly filed UCC-I Financing Statements

                       In addition,  the Credit Facilities shall also be secured
      by the pledge and  assignment of an EAB issued  certificate  of deposit in
      the amount of  $1,000,000  or such  other  liquid  collateral  as shall be
      acceptable  to EAB in its sole  discretion,  pursuant  to  EAB's  standard
      Assignment and Security Agreement.

                       The Term Loan Line shall be  secured by a first  priority
      interest  in all  equipment  that is  financed  by EAB  pursuant  to EAB's
      General Security Agreement and duly filed UCC-1 Financing Statements.

             6.          Conditions Precedent:

                       Prior to the  Borrower's  initial  request for an advance
under the Credit Facilities:

                        a.    It shall have provided to EAB:

                                (I)      A copy of the resolutions passed by the
Borrower's Board of Directors  certified by its Secretary as being in full force
and effect  authorizing the borrowing  described herein and the execution of all
documents  and  agreements  required  by EAB to  evidence  and secure the Credit
Facilities; and

                                (ii)     A certified copy of the certificate  of
 incorporation of the Borrower.

                       b.  EAB  shall  have  conducted  a  field  audit  of  the
      Borrower's  Books and records,  at the  Borrower's  sole cost and expense,
      which audit shall reveal no materially  adverse facts or circumstances not
      currently known by EAB.

                        c. EAB shall have  conducted  favorable  litigation  and
lien, trade and bank checkings of the Borrower.

               7.      FINANCIAL REPORTING:

                       The Borrower shall provide to EAB:

                               (i) As soon as available, but in any event within
     one hundred twenty (120)days  after  the  last  day of  each  fiscal  year,
     the  consolidated  and  consolidating  10K report of the  Borrower  and the
     Corporate Guarantors,filed or to be filed with the Securities  and Exchange
     Commission,  which shall include statements of income and retained earnings
     and cash flows for   such fiscal year,  each  prepared in  accordance  with
     generally accepted accounting principles consistently applied,in reasonable
     detail, such statements to be audited by a firm  of  independent  certified
     public accountants satisfactory to EAB.

                                (ii)     As soon as  available, but in any event
       within sixty(60)days after the end of each of the Borrower's first  three
       fiscal  quarters,  the  10Q reports  filed  or  to  be   filed  with  the
       Securities and Exchange Commission.

                                Each of the financial  statements  specified  in
      Sections  (i)  and  (ii)  above  shall  be  accompanied  by  a certificate
      signed  by  the  president  or chief  financial  officer  of the  Borrower
      to the effect that such  statements fairly present the financial condition
      of the Borrower and the Corporate Guarantors as of the statement date  and
      results of the  operations  of the  Borrower  and the Corporate Guarantors
      for  the   period(s)  then ended  in  accordance  with  generall  accepted
      accounting principles consistently applied.

                                (iii) As  soon as available, but  in  any  event
      within  fifteen (15) days after the end of each calendar month, a schedule
     of accounts  receivable  aged to show the number of days each such  account
     has been  outstanding  from its invoice  date,  in form atisfactory  to EAB
     and  accompanied  by  a  Statement  signed by  the Borrower's  president or
     chief  financial officer to the effect that such statement is true, correct
     and complete.

                                (iv) As soon as  available,  but  in  any  event
       within  fifteen  (15)  days  after  the  end  of  each  calend a month, a
       "Borrowing Base Certificate", in form satisfactory to EAB.

                                (v) Within one hundred  twenty  (120) days after
      the last day of each calendar year, the  personal  financial  statement of
     each Guarantor, on EAB's standard form.

                                (vi)  Such   other   financial   or   additional
    information as EAB may from time to time request.

              8.        SPECIAL REQUIREMENTS:

                       a. The Borrower agrees to maintain on a consolidated  and
consolidating basis at all times:

                                (I) a capital base (the sum of capital  surplus,
earned surplus, capital  stock  and  such  other  items as are  allowable  under
generally  accepted accounting  principles and  subordinated  liabilities  minus
deferred charges, intangibles,  receivables due from  stockholders,  officers or
affiliates  and  treasury  stock)  in  an  amount not less  than  $3,400,000  at
December 31, 1999.

                                (ii)     a maximum  leverage ratio (the ratio of
 total  unsubordinated  liabilities to capital base) of not greater than 1.00 to
 1.0 at December 31, 1999

                       b. The Borrower  shall maintain  hazard  insurance on its
      inventory with a financially sound and reputable insurance company in such
      amounts as are  necessary to cover not less than the  replacement  cost of
      such inventory and covering such risks as are usually carried by companies
      engaged in the same or similar  business which  insurance  policy shall be
      endorsed to name EAB lender loss payee.

                       C. The Borrower  agrees that EAB or its designee shall be
      permitted  access to its  premises to conduct a field  examination  of the
      Borrower's  books and records and its  operations,  at the Borrower's sole
      cost and expense  but not more  frequently  than once in any twelve  month
      period.

                       d. The Borrower shall  maintain,  to the  satisfaction of
      EAB, its, primary account relationship with EAB.

                       e. EAB agrees to release the  $1,000,000  certificate  of
      deposit  described  in  paragraph  5 hereof at such  time as the  Borrower
      delivers  to EAB  either  audited  fiscal  year end or  interim  financial
      statements which evidence, in the sole reasonable  determination of EAB, a
      year to date net operating profit of $100,000.

               9.      ACCEPTANCE:

                  If the foregoing is acceptable,  please so indicate by signing
and returning  this letter before  December 14, 1999,  the date this letter will
otherwise expire, unless extended in writing by EAB.

                                                               Very truly yours,

                                                          EUROPEAN AMERICAN BANK

                                                                  Jason A. Quinn
                                                        Assistant Vice President
                                                                Robert Stratford
                                                            Group Vice President

Agreed and Accepted this day of December, 1999

INTERNATIONAL SMART SOURCING, INC.

By: