<PAGE>  1
             COMMERCIAL REVOLVING LOAN AND SECURITY AGREEMENT


     THIS COMMERCIAL REVOLVING LOAN AND SECURITY AGREEMENT is dated July 31, 
1997, by and among COGNITRONICS CORPORATION, a New York corporation with an 
office at 3 Corporate Drive, Danbury, Connecticut 06810-4130 (the "Borrower") 
and FLEET NATIONAL BANK, a national banking association with an office located 
at 1 Landmark Square, Stamford, CT 06901 ("Fleet").
RECITALS
     A.     Borrower has requested that Fleet extend to Borrower a 
$2,000,000.00 revolving loan facility.
     B.     The proceeds of the revolving loan facility shall be used to 
replace an existing line of credit and to support additional working capital 
requirements.
     C.     Fleet is willing to extend the revolving loan facility to Borrower 
subject to the terms and conditions contained herein.
AGREEMENT
     In consideration of the Recitals, the terms and conditions contained in 
this Agreement, and other good and valuable consideration, Borrower and Fleet 
agree as follows:
     I.     DEFINITIONS
     1.01     DEFINED TERMS.  The following terms shall have the following 
meanings when used in the Agreement:
          (a)     "Account" shall have the same meaning as defined in Section 
9-106 of the Uniform Commercial Code.
          (b)     "Affiliate", as applied to any Person, means any other 
Person directly or indirectly through one or more intermediaries controlling, 
controlled by, or under common control with, that Person. For the purposes of 
this definition, "control" (including with correlative meanings, the terms 
"controlling", "controlled by" and "under common control with"), as applied to 
any Person, means the possession, directly or indirectly, of the power to 
direct or cause the direction of the management and policies of the Person, 
whether through the ownership of voting securities or by contract or 
otherwise.
          (c)     "Agreement" shall mean this Commercial Revolving Loan and 
Security Agreement as the same from time to time may be amended, supplemented 
or modified.
          (d)     "Borrowing Base" shall mean an amount which shall not exceed 
the lesser of the following:  (i) $2,000,000.00; or (ii) 75% of Eligible 
Accounts Receivable.
          (e)     "Borrowing Date" shall mean the date on which the Revolving 
Loan is disbursed to Borrower.
          (f)     "Capital Assets" shall mean assets that in accordance with 
GAAP are required or permitted to be depreciated or amortized on Borrower's 
balance sheet.
          (g)     "Capital Leases" shall mean capital leases, conditional 
sales contracts and other title retention agreements relating to the purchase 
or acquisition of Capital Assets.
          (h)     "Change of Control" shall mean the transfer, sale, 
assignment, or pledge, in any manner whatsoever, which has the effect of 
transferring more than fifty percent (50%) of the voting stock of Borrower to 
any Person who is not a shareholder of Borrower as of the date of this 
Agreement.
          (i)     "Collateral" shall mean the property of Borrower described 
in  Section VII below.
<PAGE>  2
          (j)     "Default(s)" shall mean any of the events specified in 
Section 8.01 below, whether or not any requirement for the giving of notice, 
the lapse of time, or both, has been satisfied.
          (k)     "Dollars" and "$" shall mean lawful currency of the United 
States of America.
          (l)     "Earnings Before Interest and Taxes ("EBIT")" shall mean, 
for the applicable period, income from continuing operations before interest 
and tax expense, determined in accordance with GAAP.
          (m)     "Eligible Accounts Receivables" shall mean an Account or 
Accounts in which Fleet has a perfected first priority security interest and 
is not past due more than eighty-nine (89) days from the date set forth on the 
original invoice evidencing such Account, arising from the sale of goods or 
the performance of services by Borrower in the ordinary course of its 
business, which conforms to the warranties set forth in Section V(t) and 
which:
          (i)     reflects all credits for the particular Account debtor as 
shown on the schedule setting forth the aging submitted by Borrower as 
required in Section 6.01(c);
          (ii)     is an Account upon which Borrower's right to receive 
payment is absolute and not contingent upon the fulfillment of any condition 
whatsoever;
          (iii)     does not arise from a sale or sales to an Affiliate, 
parent, or subsidiary of Borrower;
          (iv)     does not arise from the exchange or barter of any goods or 
services;
          (v)     does not arise from a contract containing a prohibition 
against assigning or granting a security interest;
          (vi)     is not an Account arising from a sale to an Account debtor 
which is an inventory or trade supplier of Borrower;
          (vii)     is not an Account of an Account debtor which has suspended 
business, made a general assignment for the benefit of creditors, committed 
any act of insolvency, filed or have had filed against it any petition under 
any bankruptcy law or any other laws for the relief of debtors;
          (viii)     is not an Account to which an Account debtor has 
objected, in any material respect, to the quality or quantity of goods or 
services of Borrower sold, or shall have rejected, returned, or refused to 
accept such goods or services;
          (ix)     is not an Account which is, in Fleet's judgment, an Account 
of an Account debtor which is an undue credit risk or otherwise unacceptable 
to Fleet in its sole discretion; and
          (x)     is not an Account subject to any dispute, offset, defense or 
counterclaim and cannot be offset by any amounts payable by Borrower;
          (n)     "Environmental Laws" shall mean all present and future laws, 
statutes, ordinances, rules, regulations, orders, codes, licenses, permits, 
decrees, judgments, directives or the equivalent of or by any Governmental 
Authority relating to or addressing the protection of the environment or human 
health.
          (o)     "Equipment" shall have the same meaning as defined in 
Section 9-109(2) of the Uniform Commercial Code.
          (p)     "ERISA" shall mean the Employee Retirement Income Security 
Act of 1974 and all rules and regulations promulgated pursuant to said Act, as 
amended from time to time.
          (q) "Event(s) of Default" shall mean any of the events specified in 
Section 8.01 below, provided that any requirement for the giving of notice, 
the lapse of time, or both, or any other condition, has been satisfied.
          (r)     "GAAP" shall mean generally accepted accounting principals 
applied in a manner consistent with that employed in the preparation of the 
financial statements described in Section 6.01 below.
          (s)     "Governmental Authority" shall mean any nation or 
government, any state or other political subdivision, any entity exercising 
executive, legislative, judicial, regulatory, or administrative functions of 
or pertaining to government, and any corporation or other entity owned or 
controlled (through stock or capital ownership or otherwise) by any of the 
foregoing.
<PAGE>  3
          (t)     "Hazardous Materials" shall mean any material or substance 
that, whether by its nature or use, is now or hereafter defined as hazardous 
waste, hazardous substance, pollutant or contaminant under any Environmental 
Laws which is toxic, explosive, corrosive, inflammable, infectious, 
radioactive, carcinogenic, mutagenic or otherwise hazardous and which is now 
or hereafter regulated under any Environmental Laws, or which is or contains 
petroleum, gasoline, diesel fuel or another petroleum hydrocarbon product.
          (u)     "Indebtedness" shall mean all obligations that in accordance 
with GAAP should be classified as liabilities upon Borrower's balance sheet as 
liabilities or to which reference should be made by footnotes to the balance 
sheet.
          (v)     "Intangible Assets" shall mean assets that in accordance 
with GAAP are properly classifiable as intangible assets, including, but not 
limited to, goodwill, franchises, licenses, patents, trademarks, trade names 
and copyrights.
          (w)     "Interest" shall mean, for the applicable period, all 
interest paid or payable, including, but not limited to, interest paid or 
payable on Indebtedness and on Capital Leases, determined in accordance with 
GAAP.
          (x)     "Interest Coverage Ratio" shall mean the ratio of (i) EBIT 
to (ii) Interest.
          (y)     "Inventory" shall have the same meaning as defined in 
Section 9-109(4) of the Uniform Commercial Code.
          (z)     "Lien" shall mean any mortgage, pledge, security interest, 
hypothecation, assignment, deposit arrangement, encumbrance, or preference, 
priority or other security agreement or preferential arrangement of any kind 
or nature whatsoever (including, without limitation, any conditional sale or 
other title retention agreement, any financing lease having substantially the 
same economic effect as any of the foregoing, and the filing of any financing 
statement under the Uniform Commercial Code or comparable law of any 
jurisdiction).
          (aa)     "Loan" shall mean the Revolving Loan made by Fleet to 
Borrower pursuant to the Agreement.
          (ab)     "Loan Documents" shall mean this Agreement, the Note, and 
all other documents or agreements executed in connection with this Agreement, 
together with any amendments, supplements or modifications hereto or thereto.
          (ac)     "Maturity Date" shall mean the Revolving Loan Maturity 
Date.
          (ad)     "Note" shall mean the Revolving Loan Note.
          (ae)     "Obligations" shall mean and include all loans, advances, 
interest, indebtedness, liabilities, obligations, guaranties, covenants and 
duties at any time owing by Borrower to Fleet of every kind and description, 
whether or not evidenced by any note or other instrument, whether or not for 
the payment of money, whether direct or indirect, absolute or contingent, due 
or to become due, now existing or hereafter arising, including but not limited 
to the indebtedness, liabilities and obligations arising under this Agreement, 
the Note, and the other Loan Documents, and all costs, expenses, fees, 
charges, expenses and attorneys', paralegals', and professionals' fees 
incurred in connection with any of the foregoing, or in any way connected 
with, involving or related to the preservation, enforcement, protection, and 
defense of this Agreement, the Note, the other Loan Documents, any related 
agreement, document or instrument, any Lien, the Collateral, and the resulting 
rights and remedies.
          (af)     "Person" shall mean any individual, corporation, limited 
liability company, partnership, joint venture, trust, unincorporated 
organization or any other juridical entity, or a government or state or any 
agency or political subdivision thereof.
<PAGE>  4
          (ag)      "Plan" shall mean any plan of a type described in Section 
4021(a) of ERISA in respect of which Borrower is an "employer" as defined in 
Section 3(5) of ERISA.
          (ah)     "Post Default Rate" shall mean at any time a rate of 
interest equal to 4.0% per annum in excess of the rate that would be in effect 
on the date of default.
          (ai)     "Prime Rate" shall mean the rate of interest established 
from time to time by Fleet as its "prime rate."
          (aj)     "Reportable Event" shall mean any of the events set forth 
in Section 4043(b) of ERISA or the regulations thereunder.
          (ak)     "Revolving Loan" shall mean the Loan made pursuant to 
Section 2.01 below.
          (al)     "Revolving Loan Maturity Date" shall mean June 30, 1998.
          (am)     "Revolving Loan Note" shall mean the Note referred to in 
Section 2.01 below.
          (an)     "Revolving Loan Commitment" shall mean the obligation of 
Fleet to make Revolving Loans to Borrower during the Revolving Loan Commitment 
Period pursuant to the terms of this Agreement as such Commitment is described 
in Section 2.01 below.
          (ao)     "Revolving Loan Commitment Period" shall mean the period 
from the date of this Agreement until the Revolving Loan Maturity Date.
          (ap)     "Subsidiary or Subsidiaries" of any Person shall mean any 
corporation or corporations of which the Person or one or more of its 
Subsidiaries, owns, directly or indirectly, at least a majority of the 
securities having ordinary voting power for the election of directors.
          (aq)     "Tangible Net Worth" shall mean Total Net Worth minus 
Intangible Assets.
          (ar)     "Total Assets" shall mean total assets determined in 
accordance with GAAP.
          (as)     "Total Current Assets" shall mean total current assets 
determined in accordance with GAAP.
          (at)     "Total Current Liabilities" shall mean total current 
Indebtedness determined in accordance with GAAP.
          (au)     "Total Liabilities" shall mean total Indebtedness 
determined in accordance with GAAP.
          (av)     "Total Net Worth" shall mean, for the applicable period, 
the excess of Total Assets minus Total Liabilities.
     1.02     ACCOUNTING TERMS. Except as otherwise specifically set forth in 
this Agreement, each accounting term used in this Agreement shall have the 
meaning given to it under GAAP. Any dispute or disagreement between Borrower 
and Fleet relating to the determination of GAAP shall, in the absence of 
manifest error, be conclusively resolved for all purposes by the written 
opinion delivered to Fleet, of independent accountants selected by Borrower 
and approved by Fleet for the purposes of auditing the periodic financial 
statements of Borrower.
     II.     LOAN FACILITY.
     2.01     REVOLVING LOAN. Subject to the terms and conditions, and relying 
upon the representations and warranties set forth in this Agreement, Fleet 
agrees to make revolving loans (a "Revolving Loan") to Borrower at any time 
until terminated as provided in Section 3.02 below, in the principal amount 
which shall not exceed the Borrowing Base in the aggregate at any time.  In 
addition to this Agreement, the Revolving Loan shall be evidenced by the 
Commercial Revolving Promissory Note of this date, a copy of which is attached 
as Exhibit "A" (the "Revolving Loan Note")
<PAGE>  5
          (a)     Procedure For Revolving Loan Borrowing.  Provided that the 
Revolving Loan Commitment has not been terminated as provided in Section 3.02 
below, during the Revolving Loan Commitment Period Borrower may borrow under 
the Revolving Loan Commitment by giving Fleet irrevocable notice of a request 
for a Revolving Loan on or before the date such borrowing is to be made, such 
irrevocable notice setting forth (A) the amount of the Loan requested, which 
shall not be less than $5,000, and (B) the requested Borrowing Date.  Such 
notice must be written (including, without limitation, via facsimile 
transmission) and shall be sufficient if received by 11:00 a.m. (Eastern 
Standard Time) on the date on which such notice is to be given. Unless 
notification is otherwise furnished by Borrower to Fleet (in a manner 
consistent with the requirements of this Section 2.01(a)), Revolving Loans 
will be made by credits to Borrower's deposit account maintained with Fleet.
     2.02     OTHER EVENTS.
          (a)     In the event that, after the date hereof, any enactment of 
or change in applicable law, regulation, condition, directive or 
interpretation thereof (including any request, guideline or policy whether or 
not having the force of law and including, without limitation, Regulation D 
promulgated by the Board of Governors of the Federal Reserve System as now and 
from time to time hereafter in effect) by any authority charged with the 
administration or interpretation thereof:
          (i)     subjects Fleet to a tax with respect to any Loan (other than 
any tax measured by or based upon the overall net income of Fleet or any 
branch or office thereof, imposed by the United States of America or by any 
other jurisdiction in which Fleet is qualified to do business or any political 
subdivision or taxing authority); or
          (ii)     changes the basis of taxation or payment to Fleet of 
principal of or interest on any Loan or any Revolving Loan Commitment under 
this Agreement or any other amounts payable (other than any tax measured by or 
based upon the overall net income of Fleet or any branch or office, imposed by 
the United States of America or by any other jurisdiction in which Fleet is 
qualified to do business or any political subdivision or taxing authority 
therein); or
          (iii)     imposes, modifies or deems applicable any reserve or 
deposit requirements against any assets held by, deposits with or for the 
account of, or loans or commitments by, an office of Fleet in connection with 
payments by Fleet under this Agreement; or
          (iv)     imposes upon Fleet any other condition with respect to any 
amount paid or payable to or by Fleet pursuant to this Agreement;
and the result of any of the foregoing is to increase the cost to Fleet of 
making the payment or maintaining its commitment or to reduce the amount of 
the payment receivable by Fleet or to require Fleet to make the payment on or 
calculated by reference to the gross amount of the sum received by it pursuant 
to this Agreement, in each case by an amount which Fleet in its reasonable 
judgment deems material, then:
     (A)     Fleet shall promptly notify Borrower in writing of the happening 
of such event;
     (B)     Fleet shall promptly deliver to Borrower a certificate stating 
the change which has occurred or the reserve requirements or other conditions 
which have been imposed on Fleet or the request, direction or requirement with 
which it has complied, together with the date thereof, the amount of such 
increased cost, reduction or payment and the way in which such amount has been 
calculated; and
     (C)     Borrower shall pay to Fleet within thirty (30) days after 
delivery of the certificate referred to in clause (B) above such an amount or 
amounts as will reasonably compensate Fleet for such additional cost, 
reduction or payment.
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          (b)     No failure on the part of Fleet to demand compensation under 
subsection (a) above on any one occasion shall constitute a waiver of its 
right to demand such compensation on any other occasion and no failure on the 
part of Fleet to deliver any certificate in a timely manner shall in any way 
reduce any obligations of Borrower to Fleet under this Section 2.02.
     III.     INTEREST, TERM AND FEES.
     3.01     INTEREST RATE.
          (a)     The Note shall bear, and Borrower promises to pay, interest 
on the indebtedness on the terms and conditions set forth in the Note.  The 
LIBOR borrowing option will be made available at 30, 60, and 90-day intervals, 
as determined to be available and appropriate by Fleet.
          (b)     Lawful Interest.    It is the intent of the parties that the 
rate of interest and all other charges to Borrower be lawful. If for any 
reason the payment of a portion of interest, fees or charges as required by 
this Agreement would exceed the limit established by applicable law which a 
commercial lender such as Fleet may charge to a commercial borrower such as 
Borrower, then the obligation to pay interest or charges shall automatically 
be reduced to such limit and, if any amounts in excess of such limits shall be 
paid, then such amounts shall be applied to the unpaid principal amount of the 
Obligations of Borrower to Fleet or refunded so that under no circumstances 
shall the interest or charges required hereunder exceed the maximum rate 
allowed by law.
     3.02     TERM AND TERMINATION.  Unless sooner terminated as a result of 
the occurrence of an Event of Default, the Revolving Loan Commitment shall 
terminate and be due and payable in full on the Revolving Loan Maturity Date. 
Upon termination of the Revolving Loan Commitment, Borrower shall have no 
ability to receive, and Fleet shall have no obligation to make any further 
advances under the Revolving Loan Commitment. All of the rights, interest, and 
remedies of Fleet and Obligations of Borrower under this Agreement and the 
other Loan Documents shall survive termination of the Revolving Loan 
Commitment until all of the Obligations of Borrower are fully satisfied.
     3.03     REPAYMENTS. Any payments made by Borrower to Fleet shall be 
credited first to late charges, then to costs and expenses, then to accrued 
and unpaid interest and then to the outstanding principal balance due in the 
inverse order of maturity.
     3.04     PREPAYMENTS.
          (a)     Prime Rate Loans. If the interest rate selected by the 
Borrower is Fleet's Prime Rate, Borrower may prepay the Revolving Loan without 
any penalty or premium.
          (b)     Fixed Rate Loans.  If the interest rate selected by the 
Borrower is LIBOR, Borrower may prepay a LIBOR Advance, as such term is 
defined in the Note, without any penalty or premium upon the maturity of such 
LIBOR Advance.  At any time that (i) there is a LIBOR Advance outstanding, and 
(ii) Fleet in its sole discretion should determine that current market 
conditions can accommodate a prepayment request, the Borrower shall have the 
right at any time and from time to time to prepay the LIBOR Advance in whole 
(but not in part), and the Borrower shall pay to Fleet a yield maintenance fee 
in an amount computed as follows:  The current rate for United States Treasury 
securities (bills on a discounted basis shall be converted to a bond 
equivalent) with a maturity date closest to the maturity date of the term 
chosen for the LIBOR Advance as to which the prepayment is made, shall be 
subtracted from the "cost of funds" component of the of the fixed rate in 
effect at the time of prepayment.  If the result is zero or a negative number, 
there shall be no yield maintenance fee.  If the result is a positive number, 
then the resulting percentage shall be multiplied by the amount of the 
principal balance being prepaid.  The resulting amount shall be divided by 360 
and multiplied by the number of days remaining in the term chosen for the 
LIBOR Advance as to which the prepayment is made.  Said amount shall be 
<PAGE>  7
reduced to present value calculated by using the number of days remaining in 
the designated term using the above referenced United States Treasury security 
rate and the number of days remaining in the term chosen for the LIBOR Advance 
as to which the prepayment is made.  The resulting amount shall be the yield 
maintenance fee due to Fleet upon prepayment of the LIBOR Advance.  If by 
reason of an Event of Default Fleet elects to declare the Loan to be 
immediately due and payable, then any yield maintenance fee with respect to 
the Loan shall become due and payable in the same manner as though the 
Borrower had exercised such right of prepayment.
     IV.     CONDITIONS OF LENDING.
     Without limiting Fleet's discretion not to make the Revolving Loan, 
Borrower agrees that the Loans are subject to fulfillment by Borrower of the 
following conditions precedent, all in form, scope and substance satisfactory 
to Fleet and its counsel in their sole discretion:
          (a)     Evidence of Corporate and Company Action. Fleet shall have 
received certified copies of all corporate and company action taken by 
Borrower to authorize the execution, delivery and performance of this 
Agreement, the Note, the other Loan Documents, and the borrowings to be made 
hereunder, together with copies of Borrower's Certificate of Incorporation and 
Bylaws, all amendments thereto, and such other papers and documents as Fleet 
or its counsel may require.
          (b)     Note. Fleet shall have received the duly executed Note drawn 
to its order.
          (c)     UCC-1 Financing Statements.  Fleet shall have received from 
Borrower duly executed UCC-1 Financing Statements and such other documents as 
Fleet deems necessary or proper to perfect its security interest in the 
Collateral.

          (d)     Insurance.  Fleet shall have received evidence of hazard and 
liability insurance in such amounts and with such companies satisfactory to 
Fleet, and Fleet shall be named as a loss payee on all such insurance.
          (e)     Opinion of Counsel. Borrower shall provide Fleet with an 
opinion from counsel in form and content satisfactory to Fleet opining to, 
among other things, the valid, binding and enforceable nature of the Loan 
Documents and the authority of Borrower to enter into the Loan Documents.
          (f)     Other. Fleet shall have received such other documents as it 
deems necessary.
     V.     REPRESENTATIONS AND WARRANTIES.
     Borrower represents and warrants to Fleet that:
          (a)     Good Standing and Qualification. Borrower is a corporation 
duly organized, validly existing and in good standing under the laws of the 
state or province, as the case may be, of its incorporation.  Borrower has all 
requisite corporate power and authority to own and operate its properties and 
to carry on its business as presently conducted and is qualified to do 
business and is in good standing as a foreign corporation in each jurisdiction 
wherein the character of the properties owned or leased by it therein or in 
which the transaction of its business therein makes such qualification 
necessary.
          (b)     Corporate Authority.  Borrower has full power and authority 
to enter into and perform the obligations under this Agreement and to make the 
borrowings contemplated, to execute and deliver the Note and the other Loan 
Documents and to incur the obligations provided for, all of which have been 
duly authorized by all necessary and proper corporate action. No other consent 
or approval or the taking of any other action in respect of shareholders or of 
any public authority is required as a condition to the validity or 
enforceability of this Agreement, the Note, or any of the other Loan 
Documents. The execution and delivery of this Agreement is for valid purposes 
<PAGE>  8
and will not violate its Certificate of Incorporation, By-Laws, or any other 
agreement to which it is a party or by which it is bound.
          (c)     Binding Agreements. This Agreement constitutes, and the Note 
and the other Loan Documents delivered in connection herewith shall 
constitute, valid and legally binding obligations of Borrower, enforceable in 
accordance with their respective terms, except as enforcement may be limited 
by bankruptcy, insolvency or similar laws affecting the enforcement of 
creditors' rights generally.
          (d)     Litigation. Except as set forth on the attached Schedule 
"5(d)", there are no actions, suits, proceedings or investigations pending or, 
to the knowledge of the officers of Borrower, threatened against Borrower 
before any court or administrative agency, which either in any case or in the 
aggregate, if adversely determined, would materially and adversely affect the 
financial condition, assets or operations of Borrower or which question the 
validity of this Agreement, the Note, or any of the other Loan Document, or 
any action to be taken in connection with the transaction contemplated hereby.
          (e)     No Conflicting Law or Agreements. The execution, delivery, 
and performance by Borrower of this Agreement, the Note, and the other Loan 
Documents (i) do not violate any provision of the Certificate of Incorporation 
or By-Laws of Borrower, (ii) do not violate any order, decree or judgment, or 
any provision of any statute, rule or regulation, (iii) do not violate or 
conflict with, result in a breach of or constitute (with notice or lapse of 
time, or both) a default under any shareholder agreement, stock preference 
agreement, mortgage, indenture, or contract to which Borrower is a party, or 
by which any of its properties are bound, and (iv) do not result in the 
creation or imposition of any lien, charge or encumbrance of any nature 
whatsoever upon any property or assets of Borrower except as contemplated in 
this Agreement.
          (f)     Taxes. With respect to all taxable periods of Borrower, 
Borrower has filed all tax returns required to be filed by it and has paid all 
Federal, state, municipal, franchise, and other taxes shown on such filed 
returns and has reserved against the same, as required by GAAP, and Borrower 
knows of no unpaid assessments against it.
          (g)     Financial Statements.    Borrower has delivered to Fleet its 
company-prepared financial statements as of December 31, 1996.  Such 
statements fairly present the consolidated financial condition of Borrower as 
of the dates and for the periods referred to therein and have been prepared in 
accordance with GAAP applied on a consistent basis by Borrower throughout the 
periods involved. There are no liabilities, direct or indirect, fixed or 
contingent, of Borrower as of the date of the balance sheet which are not 
reflected therein or in the notes thereto, other than liabilities or 
obligations not material in amount which are not required to be reflected in 
corporate balance sheets prepared in accordance with GAAP. There has been no 
material adverse change in the financial condition, business, operations, 
affairs or prospects of Borrower since the date of such financial statements.
          (h)     Existence of Assets and Title Thereto. Borrower has good and 
marketable title to its properties and assets, including the properties and 
assets reflected in the financial statements referred to above. These 
properties and assets are not subject to any mortgage, pledge, lien, lease, 
security interest, encumbrance, restriction or charge except those permitted 
under the terms of this Agreement or as set forth in Schedule "5(h)", and none 
of the foregoing prohibit or interfere with ownership of any of Borrower's 
assets or the operation of its business presently conducted.
          (i)     Regulations G. T, U and X.    The proceeds of the Loan will 
not be used, directly or indirectly, for the purpose of purchasing or carrying 
any margin stock in contravention of Regulations G, T, U or X promulgated by 
the Board of Governors of the Federal Reserve System.
<PAGE>  9
          (j)     Compliance.  To the best of Borrower's knowledge and 
belief,  Borrower is not in default with respect to or in violation of any 
order, writ, injunction or decree of any court or of any Federal, state, 
provincial, municipal or other governmental department, commission, board, 
bureau, agency, authority or official, or in violation of any law, statute, 
rule or regulation to which it or its properties is or are subject, where such 
default or violation would materially and adversely affect the financial 
condition of Borrower.  Borrower represents that it has not received notice of 
any such default from any party.  Borrower is not in default in the payment or 
performance of any of its obligations to any third parties or in the 
performance of any mortgage, indenture, lease, contract or other agreement to 
which it is a party or by which any of its assets or properties are bound.
          (k)     Leases. Borrower enjoys quiet and undisturbed possession 
under all leases under which it is operating, and all such leases are valid 
and subsisting and Borrower is not in default under any of its leases.
          (l)     Pension Plans. To the best of Borrower's knowledge, no fact, 
including but not limited to any "Reportable Event", as that term is defined 
in Section 4043 of ERISA, as the same may be amended from time to time exists 
in connection with any Plan of each of Borrower which might constitute grounds 
for termination of any such Plan by the Pension Benefit Guaranty Corporation 
or for the appointment by the appropriate United States District Court of a 
Trustee to administer any such Plan. No "Prohibited Transaction" as defined by 
ERISA exists or will exist upon the execution and delivery of this Agreement 
or the performance by the parties hereto of their respective duties and 
obligations hereunder. Borrower agrees to do all acts including, but not 
limited to, making all contributions necessary to maintain compliance with 
ERISA and agrees not to terminate any such Plan in a manner or do or fail to 
do any act which could result in the imposition of a lien on any property of 
any of Borrower pursuant to Section 4068 of ERISA.  Borrower has not incurred 
any withdrawal liability under the Multiemployer Pension Plan Amendment Act of 
1980. Borrower has no unfunded liability in contravention of ERISA.
          (m)     Office. The chief executive office and principal place of 
business of  Borrower, and the office where its records concerning Collateral 
are kept are as set forth in the first paragraph of this Agreement.
          (n)     Places of Business.  Borrower has no other places of 
business and locates no Collateral, specifically including books and records, 
at any location other than those set forth in the attached Schedule "5(n)".
          (o)     Contingent Liabilities. Except as set forth on the attached 
Schedule "5(o)", Borrower is not a party to any suretyship, guarantyship, or 
other similar type agreement; and it has not offered its endorsement to any 
individual, concern, corporation or other entity or acted or failed to act in 
any manner which would in any way create a contingent liability that does not 
appear in the financial statements referred to above.
          (p)     Contracts.  No contract, governmental or otherwise, to which 
Borrower is a party, is subject to renegotiation, nor is Borrower in default 
of any material contract.
          (q)     Union Contracts and Pension Plans.  Borrower is not a party 
to any collective bargaining, union or pension plan agreement, except as set 
forth on the attached Schedule "5(q)".  The union contracts set forth on 
Schedule "5(q)" are in full force and effect and are not currently subject to 
renegotiation. Borrower is in full compliance with the terms and conditions of 
all such union contracts and knows of no threatened work stoppage by any union 
members.
          (r)     Stock Matters. There are no options or rights outstanding to 
purchase any of Borrower's capital stock, except as set forth on the attached 
Schedule "5(r)".
<PAGE> 10
          (s)     Licenses.  To the best of Borrower's knowledge and belief, 
Borrower has all licenses, permits, approvals and other authorizations 
required by any government, agency or subdivision thereof, or from any 
licensing entity necessary for the conduct of its business, all of which 
Borrower represents to be current, valid and in full force and effect.
          (t)     Collateral.  Borrower is and shall continue to be the sole 
owner of the Collateral free and clear of all liens, encumbrances, security 
interests and claims except the liens and the security interests granted to 
Fleet hereunder.  Borrower is fully authorized to sell, transfer, pledge or 
grant to Fleet a security interest in each and every item of the Collateral; 
all documents and agreements related to the Collateral shall be true and 
correct and in all respects what they purport to be; all signatures and 
endorsements that appear thereon shall be genuine and all signatories and 
endorsers shall have full capacity to contract; none of the transactions 
underlying or giving rise to the Collateral shall violate any applicable state 
or Federal laws or regulations; all documents relating to the Collateral shall 
be legally sufficient under such laws or regulations and shall be legally 
enforceable in accordance with their terms; and Borrower agrees to defend the 
Collateral against the claims of all persons other than Fleet.
          (u)     Financial Information. All financial information including, 
but not limited to, information relating to the Accounts, Equipment, and 
Inventory, submitted by Borrower to Fleet, whether previously or in the 
future, is and will be true and correct in all material respects, and is and 
will be complete insofar as may be necessary to give Fleet a true and accurate 
knowledge of the subject matter.
          (v)     Environmental Health and Safety Laws.  Borrower has not 
received any notice, order, petition, or similar document in connection with 
or arising out of any violation or possible violation of any environmental 
health or safety law, regulation or order, and Borrower knows of no basis for 
any such violation or threat thereof for which it may become liable.
          (w)     Parent, Affiliate or Subsidiary Corporations.  Borrower has 
no parent corporation and, except as set forth on the attached Schedule 
"5(w)", has no domestic or foreign Affiliate or Subsidiary corporations.
     VI.     COVENANTS.
     6.01     FINANCING REPORTING.  Borrower covenants and agrees that from 
the date hereof until payment in full of all Obligations and the termination 
of this Agreement, Borrower shall furnish to Fleet the following, all to be 
prepared on a consolidating basis and in conformity with GAAP, applied on a 
basis consistent with the preceding period:
          (a)     within ninety (90) days after the end of each fiscal year, 
Borrower shall provide audited annual financial statements of Borrower 
prepared by independent certified public accountants of recognized standing 
selected by Borrower and acceptable to Fleet (the form of such statements to 
be satisfactory to Fleet), showing the operations and financial condition of 
Borrower on a consolidated basis at the close of such year;
          (b)     within forty-five (45) days after the end of each quarter of 
each year, quarterly financial statements prepared by the management of 
Borrower (the form of such statements to be satisfactory to Fleet), showing 
the operations and financial condition of Borrower at the close of such fiscal 
quarters;
          (c)     within fifteen (15) days after the end of each month, 
Borrower shall provide an accounts receivable aging;
          (d)     within fifteen (15) days after the end of each month 
Borrower shall provide monthly Borrowing Base Certificates in the form of the 
attached Exhibit "C";
          (e)     within sixty (60) days of the end of each quarter and within 
one hundred twenty (120) days of the end of Borrower's fiscal year, a 
Certificate of Compliance of Borrower in the form of the attached Exhibit "B" 
and signed by the President of Borrower;
<PAGE> 11
          (f)     within one hundred twenty (120) days after the end of each 
fiscal year, Borrower shall provide projected financial statements;
          (g)     as is required by the Securities and Exchange Commission, 
but in any event not later than 90 days of the end of Borrower's fiscal year, 
Borrower shall provide Form 8K and Form 10K.
          (h)     promptly upon Fleet's written request from time to time, 
such other information about the financial condition and operations of 
Borrower as Fleet may reasonably request.
     6.02     AFFIRMATIVE COVENANTS.  Borrower covenants and agrees from the 
date hereof until payment in full of all obligations and termination of this 
Agreement, Borrower shall:
          (a)     Insurance and Endorsement.    Keep its properties and 
business insured against fire and other hazards (so-called "All Risk" 
coverage) in amounts and with companies reasonably satisfactory to Fleet 
covering such risks as are herein set forth; maintain public liability 
coverage, against claims for personal injuries or death; and maintain all 
worker's compensation, employment or similar insurance as may be required by 
applicable law. All insurance shall be in amounts reasonably satisfactory to 
Fleet and shall contain such terms, be in such form, be for such periods, and 
be written by carriers duly licensed by the state of Connecticut and 
reasonably satisfactory to Fleet. Without limiting the generality of the 
foregoing, such insurance must provide that it may not be canceled without 
thirty (30) days prior written notice to Fleet. With respect to the 
Collateral, Borrower shall cause Fleet to be endorsed as a loss payee. In the 
event of failure to provide and maintain insurance as so provided, Fleet may, 
at its option, provide such insurance and charge the amount to the Revolving 
Loan.  Borrower shall furnish to Fleet certificates or other satisfactory 
evidence of compliance with the foregoing insurance provisions. Borrower 
irrevocably appoints Fleet as its attorney-in-fact, coupled with an interest, 
to make proofs of loss and claims for insurance, and to receive payments of 
the insurance and execute all documents, checks and drafts in connection with 
payments of the insurance.
          (b)     Taxes and Other Liens. Comply with all statutes and 
government regulations and pay all taxes, assessments, governmental charges or 
levies, or claims for labor, supplies, rent and other obligations made against 
it or its property which, if unpaid, might become a lien or charge against 
Borrower or its properties, except liabilities being contested in good faith 
and against which, if requested by Fleet, Borrower shall set up reserves in 
amounts and in form reasonably satisfactory to Fleet.
          (c)     Place of Business. Maintain its chief place of business and 
chief executive offices at the address set forth in the beginning of this 
Agreement.
          (d)     Inspections. After reasonable notice and during normal 
business hours, allow Fleet by or through any of its officers, attorneys, 
accountants, or other agents designated by Fleet, for the purpose of 
ascertaining whether or not each and every provision hereof and of the other 
Loan Documents, is being performed, to enter the offices and plants of 
Borrower or its subsidiaries to examine or inspect any of the properties, 
books and records or extracts therefrom, to make copies of such books and 
records or extracts therefrom, and to discuss the affairs, finances, and 
accounts with Borrower all at such times and as often as Fleet or any 
representatives of Fleet may reasonably request.
          (e)     Litigation. Advise Fleet of the commencement or threat of 
litigation, including arbitration proceedings and any proceedings before any 
governmental agency, which is instituted against Borrower and is reasonably 
likely to have a material adverse effect upon the condition, financial, 
operating, or otherwise, of Borrower.
          (f)     Maintain Existence. Maintain its corporate existence and 
comply with all applicable statutes, rules, and regulations.
<PAGE> 12
          (g)     Maintain Assets.    Maintain its properties in good repair, 
working order, and operating condition. Borrower shall immediately notify 
Fleet of any event causing material loss in the value of its assets.
          (h)     ERISA.  Comply in all material respects with ERISA.
          (i)     Notice of Certain Events.  Give prompt written notice to 
Fleet of:
          (i)     any dispute that arises between Borrower and any 
governmental regulatory body or law enforcement agency;
          (ii)     any labor controversy resulting or likely to result in a 
strike or work stoppage against Borrower;
          (iii)     any proposal by any public authority to acquire the assets 
or business of any of Borrower;
          (iv)     the location of any Collateral other than at any of 
Borrower's places of business disclosed in this Agreement other than (1) 
Collateral in transit in the ordinary course of Borrower's business, and (2) 
Collateral valued at less than $100,000.00 in the aggregate;
          (v)     any proposed or actual change of the name, identity, or 
corporate structure of Borrower;
               (vi)     any other matter which has resulted or is likely to 
result in a material adverse change in the financial condition or operations 
of Borrower; and
          (vii)     any information received by Borrower with respect to 
Accounts that may materially affect the value of the Accounts or the rights 
and remedies of Fleet with respect to the Accounts.
          (j)     Defaults. Give prompt written notice to Fleet upon the 
occurrence of any Default or of any event which, but for giving of notice or 
passage of time or both, would constitute an Event of Default, signed by the 
president or chief financial officer of Borrower describing such occurrence 
and the steps, if any, being taken to cure the Default.
          (k)     Account Duties.  Comply with any and all Federal, state, and 
local laws affecting its business, including, but not limited to, payment of 
all Federal, state and provincial taxes.  Borrower agrees to indemnify and 
hold Fleet harmless from all claims, actions and losses, including reasonable 
attorneys' fees and costs actually incurred by Fleet arising from any 
contention, that there has been a failure to comply with such laws.
          (l)     Collateral Duties. Do whatever Fleet may reasonably request 
from time to time by way of obtaining, executing, delivering, and filing 
financing statements, assignments, landlord's or mortgagee's waivers, and 
other notices and amendments and renewals thereof, and Borrower will take such 
actions as Fleet shall reasonably request in order to create and maintain a 
valid and enforceable first lien upon, pledge of, and first priority security 
interest in, any and all of the Collateral. If Borrower fails to timely 
provide financing statements, Fleet is authorized to file financing statements 
without the signature of Borrower and to execute and file such financing 
statements on behalf of Borrower as specified by the Uniform Commercial Code 
to perfect or maintain its security interest in all of the Collateral. All 
charges, expenses and fees which Fleet incurs in filing any of the foregoing, 
together with costs and expenses of any lien search required by Fleet, and any 
taxes relating thereto, shall be charged to the balance of the Revolving Loan 
and added to the Obligations.
          (m)     Audit by Bank; Fees.  Permit Fleet to audit the books and 
records of  Borrower at such times and in such manner and detail as Fleet 
deems, in its reasonable discretion, are necessary.  Borrower shall promptly 
pay Fleet all audit fees and any reasonable out-of-pocket expenses incurred in 
connection with any such audit.  Fleet may charge any such audit fees and 
out-of-pocket expenses to Borrower's deposit account.
<PAGE> 13
          (n)     Officers and Directors. Promptly notify Fleet in writing 
upon any changes or additions to any of Borrower's officers or directors or 
the occurrence of a Change of Control.
     6.03     NEGATIVE COVENANTS.  Borrower covenants and agrees that from the 
date hereof until payment in full of all Obligations and termination of this 
Agreement, Borrower shall not without the prior written consent of Fleet:
          (a)     Encumbrances. Incur or permit to exist any lien, mortgage, 
charge, or other encumbrance against any of its properties or assets, whether 
now owned or hereafter acquired, including the Collateral, except: (i) liens 
required or expressly permitted by this Agreement; (ii) pledges or deposits in 
connection with or to secure worker's compensation, unemployment, or liability 
insurance; and (iii) tax liens which are being contested in good faith and in 
compliance with this Agreement.
          (b)     Limitation on Indebtedness. Except as set forth on the 
attached Schedule "6.03(b)", create, incur or guaranty any indebtedness or 
obligation, borrow money from, or issue or sell any obligations of Borrower to 
any lender or Person other than Fleet, except in the ordinary course of 
business.
          (c)     Contingent Liabilities. Assume, guaranty, endorse or 
otherwise become liable upon the obligations of any person, firm or 
corporation, or enter into any purchase or option agreement or other 
arrangement having substantially the same effect as such a guarantee, except 
by the endorsement of negotiable instruments for deposit or collection or 
similar transactions in the ordinary course of business.
          (d)     Consolidation or Merger. Merge into or consolidate with or 
into any corporation or entity.
          (e)     Loans, Advances, Investments.  Use the proceeds of the Loan, 
either directly or indirectly, to make or permit to exist any loans or 
advances to (other than in the ordinary course of business), or purchase any 
stock, other than securities or evidences of indebtedness, or make or permit 
to exist any investment, including without limitation the acquisition of stock 
of a corporation, or acquire any interest whatsoever in, any other person or 
entity.
          (f)     Acquisition of Stock of Borrower. Purchase, acquire, redeem 
or retire, or make any commitment to purchase, acquire, redeem or retire any 
of the common stock of any Borrower, whether now or hereafter outstanding.
          (g)     Sale and Lease of Assets.  Sell, lease or otherwise dispose 
of any of its assets, except in the ordinary course of business.
          (h)     Name Changes. Change its corporate or company name or 
conduct its business under any trade name other than as set forth in this 
Agreement.
          (i)     Change of Control. Suffer any Change of Control of Borrower.
          (j)     Prohibited Transfers. Transfer, in any manner, either 
directly or indirectly, any cash, property, or other assets to any parent or 
any Affiliate or Subsidiary, and except for any sales made in the ordinary 
course of business and for fair consideration on terms no less favorable than 
if such sale had been an arms-length transaction between Borrower and an 
unaffiliated entity.
          (k)     Use of Proceeds.    Apply any of the proceeds from the Loans 
to any Affiliate or Subsidiary.
          (l)     No Management/Ownership Change. Suffer any change in the 
management or ownership of Borrower which Fleet deems, in its reasonable 
discretion, to be a material adverse change.
          (m)     Leasebacks. Lease any real estate or other capital asset 
from any lessor who shall have acquired such property from Borrower.
          (n)     Business Operations.  Engage in any business other than the 
business in which it is currently engaged or a business reasonably related 
thereto.
<PAGE> 14
          (o)     Assignment of Claims Act.  Take any action or fail to take 
any action, either directly or indirectly, or cooperate in any way, so as to 
allow any party, other than Fleet, to comply with the Federal Assignment of 
Claims Act.
          (p)     Distributions.     Make any distributions (the 
"Distributions") of cash or other assets of Borrower other than salaries, 
bonuses and other ordinary and necessary business expenses of employees of 
Borrower.
          (q)     Dividend. Declare or pay any cash dividend on Borrower's 
capital stock or make any other Distribution with respect to Borrower's 
capital stock or redeem, retire, purchase or otherwise acquire, directly or 
indirectly, for value or set apart any sum for the redemption, retirement, 
purchase or other acquisition of, directly or indirectly, any share of 
Borrower' capital stock, unless after giving effect hereto, Borrower is in 
compliance with the Financial Covenants as set forth in Section 6.04.
          (r)     Contingent Liabilities. Assume, guaranty, endorse or 
otherwise become liable upon the obligations of any Person, except as required 
by this Agreement and by the endorsement of negotiable instruments for deposit 
or collection or similar transactions in the ordinary course of business.
          (s)     Investment, Loans. Guarantees, Revolving Loans.  Lend or 
advance money, credit or property to any Person, or invest in (by capital 
contribution, creation of subsidiaries or otherwise), or purchase or 
repurchase the stock or indebtedness, or all or a substantial part of the 
assets of properties, of any Person, or enter into any exchange of securities 
with any Person, or guaranty, assume, endorse, or otherwise become responsible 
for (directly or indirectly or by any instrument having the effect of assuring 
any Person's payment or performance or capability) the indebtedness, 
performance, obligations, stock, or dividends of any Person, or agree to do 
any of the foregoing, or permit or suffer any Subsidiary to do so, except:
     (i)     endorsement of negotiable instruments for deposit or collection 
in the ordinary course of business;
     (ii)     investments representing the indebtedness of any Person owing as 
a result of the sale of goods by Borrower or Borrower' Subsidiaries in the 
ordinary course of business;
     (iii)     the extension of credit to customers in the ordinary course of 
business.
          (t)     Immigration.  Hire any employee in violation of any law or 
regulating immigration and naturalization.
     6.04     FINANCIAL COVENANTS.     Borrower agrees and covenants that from 
the date hereof until payment in full and performance of all Obligations it 
shall not, on a consolidated  basis:
          (a)     Minimum Tangible Net Worth.  Permit its Tangible Net Worth 
to be less than $8,500,000.00 at any time.  This covenant shall be tested 
quarterly.
          (b)     Interest Coverage Ratio.  Permit its Interest Coverage Ratio 
to be less than 2.5 to 1.0 at any time.  This covenant shall be tested 
quarterly.
          (c)     No Two Consecutive Quarterly Loses:  Permit its Net income, 
as defined by generally accepted accounting principles, to be less than one 
dollar ($1.00) for two consecutive quarters.  This covenant shall be tested 
quarterly.
          (d)     30-Day Annual Cleanup:  The Borrower shall maintain a zero 
outstanding level under the Revolving Loan Note for at least 30 consecutive 
days during the term of the facility.
     VII.     GRANT OF COLLATERAL.
     To secure the prompt payment and performance of the Obligations, Borrower 
pledges, assigns, transfers, and grants to Fleet a continuing, first priority 
lien and security interest in the following property of Borrower (the 
"Collateral"):
<PAGE> 15
          (a)     All domestic accounts (the "Accounts"), as that term is 
defined in Section 9-106 of the Uniform Commercial Code as in effect from 
time-to-time in the State of Connecticut (the "UCC"), including, without 
limitation, all accounts receivable, book debts and other forms of 
obligations, other than forms of obligations evidenced by Chattel Paper or 
Instruments, as those terms are defined below, now owned or hereafter received 
or acquired by or belonging or owing to Borrower, including, without 
limitation, under any trade name, style, or division thereof, whether arising 
out of goods sold or services rendered by Borrower or from any other 
transaction, whether or not the same involves the sale of goods or services by 
Borrower, including, without limitation, any such obligation which may be 
characterized as an account or contract right under the UCC, and all of 
Borrower's rights in to and under all purchase orders or receipts now owned or 
hereafter acquired by it for goods or services, and all of Borrower's rights 
to any goods represented by any of the foregoing, including, without 
limitation, unpaid seller's rights of rescission, replevin, reclamation or 
repossessed goods, and all monies due or to become due to Borrower under all 
purchase orders and contracts for the sale of goods or the performance of 
services or both by Borrower, whether or not yet earned by performance on the 
part of Borrower or in connection with any other transaction, now in existence 
or hereafter occurring, including, without limitation, the right to receive 
the proceeds of such purchase orders and contracts, and all collateral 
security and guaranties of any kind given by any person with respect to any of 
the foregoing;
          (b)     All equipment (the "Equipment"), as that term is defined in 
Section 9-109(2) of the UCC, now or hereafter owned or acquired by Borrower 
and, in any event, shall include, without limitation, all machinery, tools, 
dyes, equipment, furnishings, vehicles, and computers and other electronic 
data processing and other office equipment, any and all additions, 
substitutions and replacements of any of the foregoing, wherever located, 
together with all attachments, components, parts, equipment and accessories 
installed thereon or affixed thereto;
          (c)     All inventory (the "Inventory"), as that term is defined in 
Section 9-109(4) of the UCC, wherever located, now or hereafter owned or 
acquired by Borrower and, in any event, shall include all inventory, 
merchandise, goods and other personal property which are held by or on behalf 
of Borrower for sale or lease or are furnished or are to be furnished under a 
contract of service or which constitute raw materials, work in process or 
materials used or consumed or to be used or consumed in Borrower's business, 
or the processing, packaging, promotion, delivery or shipping of the same, and 
all finished goods, whether or not such inventory is listed on any schedules, 
assignments or reports furnished to Fleet from time-to-time and whether or not 
the same is in transit or in the constructive, actual, or exclusive occupancy 
or possession of Borrower or is held by Borrower or by others for Borrower's 
account, including, without limitation, all goods covered by purchase orders 
and contracts with suppliers and all goods billed and held by suppliers and 
all inventory which may be located on premises of Borrower or of any carriers, 
forwarding agents, truckers, warehousemen, vendors, selling agents or other 
persons;
          (d)     All proceeds (the "Proceeds"), as that term is defined in 
Section 9-306(1) of the UCC, and in any event shall include, without 
limitation, (i) any and all Accounts, Chattel Paper, Instruments, cash and 
other proceeds payable to Borrower from time-to-time in respect of any of the 
foregoing collateral security, (ii) any and all proceeds of any insurance, 
indemnity, warranty or guaranty payable to Borrower from time-to-time with 
respect to any of the collateral security, (iii) any and all payments (in any 
form whatsoever) made or due and payable to Borrower from time-to-time in 
connection with any requisition, confiscation, condemnation, seizure, or 
forfeiture of all or any part of the collateral security by any governmental 
<PAGE> 16
body, authority, bureau, or agency (or any person acting under color of 
governmental authority) and (iv) any and all other amounts from time-to-time 
paid or payable under or in connection with any of the collateral security.
     VIII.     DEFAULT.
     8.01     EVENTS OF DEFAULT. The Obligations shall, at the option of 
Fleet, become immediately due and payable in full without notice or demand 
unless otherwise provided in this Agreement upon the occurrence of any of the 
following events (collectively, "Events of Default" and individually, an 
"Event of Default"):
          (a)     failure of Borrower to pay any installment of principal or 
interest or any other Obligation arising under this Agreement, the Note, or 
the other Loan Documents within 10 days from the date such installment or 
Obligation becomes due;
          (b)     breach of any of the Obligations by Borrower including, 
without limitation, any covenant, representation, or warranty contained in 
this Agreement, or of Borrower's failure to perform any act, duty or 
obligation as required by this Agreement or any of the other Loan Documents 
which breach or failure is not cured within 15 days after written notice from 
Fleet to Borrower;
          (c)     the making by Borrower of any material misrepresentation of 
a material fact to Fleet;
          (d)     insolvency (failure of any of Borrower to pay its debts as 
they mature or when the fair value of Borrower's assets is less than its 
liabilities) of Borrower, or business failure, appointment of a receiver or 
custodian, or assignment for the benefit of creditors or the commencement of 
any proceedings under any bankruptcy or insolvency law by or against Borrower 
for the Obligations; appointment of a committee of creditors or liquidating 
banks, or offering of a composition or extension to creditors by, for or of 
Borrower; however, if an involuntary bankruptcy petition is filed, an Event of 
Default shall occur if the petition is not dismissed within thirty (30) days 
of filing;
          (e)     the loss, revocation or failure to renew any license or 
permit now held or hereafter acquired by Borrower which materially affects the 
ability of the Borrower to continue its operations as presently conducted;
          (f)     a default, after any applicable cure period, in any other 
Loan Document or other agreements between Fleet and Borrower;
          (g)     the filing of any lien or security interest, voluntary or 
involuntary, against the Collateral, which in the case of an involuntary lien 
is not discharged of record within thirty (30) days of filing;
          (h)     dissolution or termination of existence of Borrower;
          (i)     failure by Borrower to pay or perform any other Indebtedness 
in excess of $5,000 (other than trade debt), or if any such other Indebtedness 
shall be accelerated, or if there shall exist any default under any 
instrument, document or agreement governing, evidencing or securing such other 
Indebtedness;
          (j)     a material adverse change in the condition, financial or 
otherwise, of Borrower as determined by Fleet in its reasonable discretion;
          (k)     any judgment entered against the Borrower, net of insurance 
coverage, that is in excess of $1,000,000.00;
          (l)     any judgment that is not fully satisfied within thirty (30) 
days from the date of judgment.
Upon the happening of any one or more Events of Default, any requirements upon 
Fleet to make further Revolving Loans shall terminate.  Borrower expressly 
waives any presentment, demand, protest, notice of protest or other notice of 
any kind.  Fleet may proceed to enforce the rights of Fleet whether by suit in 
equity or by action at law, whether for specific performance of any covenant 
or agreement contained in this Agreement, the Note, or any other Loan 
<PAGE> 17
Documents, or in aid of the exercise of any power granted in either this 
Agreement, the Note, or the other Loan Documents, or it may proceed to obtain 
judgment or any other relief whatsoever appropriate to the enforcement of such 
rights, or proceed to enforce any legal or equitable right which it may have 
by reason of the occurrence of any Event of Default.
     8.02     DECLARED DEFAULT. Upon the occurrence of an Event of Default, 
Fleet shall have in any jurisdiction where enforcement is sought, in addition 
to all other rights and remedies which Fleet may have under law and equity, 
the following rights and remedies, all of which may be exercised with or 
without further notice to Borrower and without a prior judicial or 
administrative hearing or notice, which notice and hearing are expressly 
waived: (a) to enforce or foreclose the liens and security interests created 
under the Loan Documents, this Agreement or under any other agreement relating 
to the Collateral by any available judicial procedure or without judicial 
process, (b) to enter any premises where any Collateral may be located for the 
purpose of taking possession or removing the same, (c) to sell, assign, lease, 
or otherwise dispose of Collateral or any part thereof, either at public or 
private sale, in lots or in bulk, for cash, on credit or otherwise, with or 
without representations or warranties, and upon such terms as shall be 
acceptable to Fleet, all at Fleet's sole option and as it in its sole 
discretion may deem advisable, (d) to bid or become purchaser at any such sale 
if public, free from any right of Borrower of redemption, after sale, which is 
expressly waived by Borrower, and (e) at the option of Fleet, to apply or be 
credited with the amount of all or any part of the Obligations owing to Fleet 
against the purchase price bid by Fleet at any such sale.
     8.03     SPECIFIC POWERS.    (a) Fleet may at any time, after the 
occurrence of an Event of Default, at its sole discretion: (i) give notice of 
assignment to any Account debtor of Borrower; (ii) collect Accounts directly 
and charge the collection costs and expenses to  Borrower's demand deposit 
account; (iii) settle or adjust disputes and claims directly with Account 
debtors of Borrower for amounts and upon terms which Fleet considers advisable, 
and credit the demand deposit account with the net amounts received in payment 
of Accounts; (iv) exercise all other rights granted in this Agreement and the 
other Loan Documents; (v) receive, open and dispose of all mail addressed to 
Borrower and notify the Post Office authorities to change the address for 
delivery of Borrower's mail to an address designated by Fleet; (vi) endorse 
the name of Borrower on any checks or other evidence of payment that may come 
into possession of Fleet and on any invoice, freight or express bill, bill of 
lading or other documents; (vii) in the name of Borrower or otherwise, demand, 
sue for, collect, and give acquittance for any and all monies due or to become 
due on Accounts; (viii) compromise, prosecute, or defend any action, claim or 
proceeding concerning Accounts; and (ix) do any and all things necessary and 
proper to carry out the purposes contemplated in this Agreement, to carry out 
the purposes contemplated in this Agreement, the other Loan Documents, and any 
other agreement between the parties.
          (b)     Fleet and any person acting as its attorney hereunder shall 
not be liable for any acts or omissions or for any error of judgment or 
mistake of fact or law, except for bad faith and willful misconduct. Borrower 
agrees that the powers granted hereunder, being coupled with an interest, 
shall be irrevocable so long as any Obligation remains unsatisfied. 
Notwithstanding the foregoing, it is understood that Fleet is under no duty to 
take  the foregoing actions and that after having made demand upon the account 
debtors of Borrower for payment, Fleet shall have no further duty as to the 
collection or protection of Accounts or any income therefrom and no further 
duty to preserve any rights pertaining thereto, other than the safe custody 
thereof.
<PAGE> 18
     8.04     DUTIES AFTER DEFAULT.   (a) Borrower will, at Fleet's request, 
assemble all Collateral and make it available to Fleet at places which Fleet 
may reasonably select and will make available to Fleet all premises and 
facilities of Borrower for the purpose of Fleet taking possession of 
Collateral or of removing or putting the Collateral in salable form. In the 
event any goods called for in any sales order, contract, invoice, or other 
instrument or agreement evidencing or purporting to give rise to any Account 
shall not have been delivered or shall be claimed to be defective by any 
customer, Fleet shall have the right in its discretion to use and deliver to 
such customer any goods of Borrower to fulfill such order, contract or the 
like so as to make good any such Account. If any Collateral shall require 
repairing, maintenance, preparation, or the like, or is in process or other 
unfinished state, Fleet shall have the right, but shall not be obligated, to 
do such repairing, maintenance, preparation, processing, or completion of 
manufacturing for the purpose of putting the same in such salable form as 
Fleet shall deem appropriate, but Fleet shall have the right to sell or 
dispose of such Collateral without such processing.
          (b)     The net cash proceeds resulting from the collection, 
liquidation, sale, lease, or other disposition of Collateral shall be applied 
first to the expenses, including all reasonable attorneys' and professional 
fees, of retaking, holding, storing, processing, and preparing for sale, 
selling, collecting, liquidating, and the like and then to the satisfaction of 
all Obligations, application as to particular Obligations or against principal 
or interest to be at Fleet's sole discretion and the balance of the proceeds, 
if any, shall be paid to Borrower. Borrower shall be liable to Fleet and shall 
pay to Fleet on demand any deficiency which may remain after such sale, 
disposition, collection or liquidation of Collateral.
     8.05     BORROWER'S INDEMNIFICATION. Fleet shall not, under any 
circumstances or in any event whatsoever, have any liability for any error or 
omission or delay of any kind occurring in the liquidation of any of the 
Collateral, including the settlement, collection or payment of any of the 
Collateral accounts or any instrument received in payment thereof, or any 
damage resulting therefrom. Borrower shall indemnify and hold harmless Fleet 
against and from any claim, loss or damage arising out of the liquidation of 
any of the Collateral, including the settlement, collection or payment of any 
of the Collateral accounts or any instrument received in payment thereof, 
provided that Fleet acted in a commercially reasonable manner in its 
liquidation of any of the Collateral.
     8.06     CUMULATIVE REMEDIES.  The enumeration of Fleet's rights and 
remedies set forth in this Section is not intended to be exhaustive, and the 
exercise by Fleet of any right or remedy shall not preclude the exercise of 
any other rights or remedies, all of which shall be cumulative and shall be in 
addition to any other right or remedy given hereunder or under any other 
agreement between the parties or which may now or hereafter exist in law or at 
equity or by suit or otherwise. No delay or failure to take action on the part 
of Bank in exercising any right, power or privilege shall operate as a waiver 
thereof, nor shall any single or partial exercise of any such right, power, or 
privilege preclude other or further exercise thereof or the exercise of any 
other right, power or privilege or shall be construed to be a waiver of any 
event of default. No course of dealing between Borrower and Fleet or their 
employees shall be effective to change, modify, or discharge any provision of 
this Agreement or to constitute a waiver of any default.
     IX.     MISCELLANEOUS.
     9.01     EXPENSES. Borrower agrees to pay all expenses (including 
reasonable fees and expenses of Fleet or its counsel)  incidental to the 
collection of monies due hereunder or under the Notes or the other Loan 
Documents or the enforcement of the rights (including the protection thereof) 
of Fleet under any provisions of this Agreement, and the Note and the other 
Loan Documents.
<PAGE> 19
     9.02     SET-OFF. Borrower gives Fleet a lien and right of set off for 
all the Obligations upon and against all its deposits, credits, collateral, 
and property now or hereafter in the possession or control of Fleet or in 
transit to it. Fleet may, upon demand or the occurrence of any Event of 
Default, apply or set off the same, or any part thereof, to any Obligations of 
Borrower to Fleet.
     9.03     COVENANTS TO SURVIVE. BINDING AGREEMENT. All covenants, 
agreements, warranties, and representations made herein, in the Note, in the 
other Loan Documents, and in all certificates or other documents of Borrower 
shall survive the advances of money made by Fleet to Borrower and the delivery 
of the Note, and the other Loan Documents. All such covenants, agreements, 
warranties, and representations shall be binding upon Borrower and its 
successors and assigns, and inure to the benefit of Fleet and its successors 
and assigns, whether or not so expressed.
     9.04     CROSS-COLLATERALIZATION. All Collateral which Fleet may at any 
time acquire from Borrower or from any other source in connection with 
Obligations arising under this Agreement and the other Loan Documents shall 
constitute collateral for each and every Obligation, without apportionment or 
designation as to particular Obligations. All Obligations, however and 
whenever incurred, shall be secured by all Collateral however and wherever 
acquired. Fleet shall have the right, in its sole discretion, to determine the 
order in which its rights in or remedies against any Collateral are to be 
exercised and which type of Collateral or which portions of Collateral are to 
be proceeded against and the order of application of proceeds of Collateral as 
against particular Obligations.
     9.05     CROSS-DEFAULT. The Loan shall be cross-defaulted with current 
and future financing accommodations extended or to be extended by Fleet to 
Borrower so that a default under any loan to Borrower shall be an Event of 
Default hereunder and under all of the other loans extended by Fleet.
     9.06     AMENDMENTS AND WAIVERS. This Agreement, the Note, the other Loan 
Documents, and any term, covenant, or condition hereof or thereof may not be 
changed, waived, discharged, modified or terminated except by a writing 
executed by the parties.  The failure on the part of Fleet to exercise, or 
Fleet's delay in exercising, any right, remedy or power hereunder or under the 
Note or the other Loan Documents shall not preclude any other or future 
exercise thereof, or the exercise of any other right, remedy or power.
     9.07     NOTICES. All notices, requests, consents, demands and other 
communications shall be in writing and shall be mailed by registered or 
certified first class mail or delivered by an overnight courier to the 
respective parties to this Agreement as follows:
If to Borrower:                Cognitronics Corporation
                         3 Corporate Drive
                         Danbury, Connecticut 06810
                         Attention: Brian J. Kelley
     with a copy to:          Diserio Martin O'Connor & Castiglioni
                         One Atlantic Street
                         Stamford, Connecticut  06901
                         Attention: Brian T. O'Connor

If to the Bank:               Fleet National Bank
                         One Landmark Square
                         Stamford, Connecticut 06901
                         Attention: John V. Raleigh

     with a copy to:          Brody and Ober, P.C.
                         135 Rennell Drive
                         Southport, Connecticut  06490
                         Attention: Seth L. Cooper
<PAGE> 20
     9.08     TRANSFER OF INTEREST.  Borrower agrees that Fleet, in its sole 
discretion and upon prior written notice to Borrower, may freely sell, assign 
or otherwise transfer participations, portions, co-lender interests, or other 
interests in all or any portion of the indebtedness, liabilities or 
obligations arising in connection with or in any way related to the financing 
transactions of which this Agreement is a part. In the event of any such 
transfer, the transferee may, in Fleet's sole discretion, have and enforce all 
the rights, remedies and privileges of Fleet. Borrower consents to the release 
by Fleet to any potential transferee of any and all information including, 
without limitation, financial information pertaining to Borrower as Fleet, in 
its sole discretion, may deem appropriate.  If such transferee so participates 
with Fleet in making loans or advances hereunder or under any other agreement 
between Fleet and Borrower, Borrower grants to such transferee and such 
transferee shall have and is hereby given a continuing lien and security 
interest in any money, securities, or other property of Borrower in the 
custody or possession of such transferee, including the right of set off, to 
the extent of such transferee's participation in the Obligations.
     9.09     SECTION HEADINGS, SEVERABILITY, ENTIRE AGREEMENT. Section and 
subsection headings have been inserted herein for the convenience of Fleet 
only and shall not be construed as part of this Agreement. Every provision of 
this Agreement, the Note, and the other Loan Documents is intended to be 
severable; if any term or provision of this Agreement, the Note, the other 
Loan Documents, or any other document delivered in connection herewith shall 
be invalid, illegal, or unenforceable for any reason whatsoever, the validity, 
legality, and enforceability of the remaining provisions hereof or thereof 
shall not in any way be affected or impaired thereby. All Exhibits and 
Schedules to this Agreement shall be deemed to be part of this Agreement. This 
Agreement, the other Loan Documents, and the Exhibits and Schedules attached 
hereto and thereto embody the entire agreement and understanding between 
Borrower and Fleet and supersede all prior agreements and understandings 
relating to the subject matter hereof unless otherwise specifically reaffirmed 
or restated herein.
     9.10     COUNTERPARTS. This Agreement may be executed in any number of 
counterparts, each of which, when so executed and delivered shall be an 
original, and it shall not be necessary when making proof of this Agreement to 
produce or account for more than one counterpart.
     9.11     GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement and the 
other Loan Documents, and all transactions, assignments and transfers 
hereunder and thereunder, and all the rights of the parties, shall be governed 
as to validity, construction, enforcement and in all other respects by the 
laws of the State of Connecticut. Borrower agrees that any Superior Court or 
United States District Court for the District of Connecticut located in 
Fairfield County shall have jurisdiction to hear and determine any claims or 
disputes pertaining to the financing transactions of which this Agreement is a 
part and to any matter arising or in any way related to this Agreement or any 
other agreement between Fleet and Borrower.  Borrower expressly submits and 
consents in advance to such jurisdiction in any action or proceeding.
     9.12     UNIFORM COMMERCIAL CODE. Borrower shall comply with, and Fleet 
shall have all the rights and remedies of a secured party under the Uniform 
Commercial Code, as enacted in Connecticut, as amended.
     9.13     FURTHER ASSURANCES. At the request of Fleet, Borrower agrees 
that at its expense, it shall promptly execute and deliver all further 
instruments and documents, and take all further action, that may be necessary 
or desirable, or that Fleet may request, in order to perfect and protect any 
security granted or purported to be granted hereby including, but not limited 
to UCC-l financing statements, or to enable Fleet to exercise and enforce its 
rights and remedies hereunder.
<PAGE> 21
     9.14     PREJUDGMENT REMEDY WAIVER; WAIVERS. BORROWER ACKNOWLEDGES THAT 
THE LOAN AND SECURITY INTERESTS EVIDENCED HEREBY ARE COMMERCIAL TRANSACTIONS 
AND WAIVES ITS RIGHT TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE 
CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL 
LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH FLEET MAY DESIRE TO USE, AND 
FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF 
NONPAYMENT, PROTEST, AND NOTICE OF ANY RENEWALS OR EXTENSIONS. BORROWER ALSO 
WAIVES IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT BY FLEET THE RIGHT TO ASSERT 
WITH REGARD TO THIS AGREEMENT, ANY OFFSETS OR COUNTERCLAIMS IT MIGHT HAVE. 
BORROWER ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND 
VOLUNTARILY, AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE 
RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
     9.15     JURY TRIAL WAIVER.  BORROWER WAIVES TRIAL BY JURY IN ANY COURT 
IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR 
IN ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A 
PART OR THE ENFORCEMENT OF ANY OF FLEET'S RIGHTS. BORROWER ACKNOWLEDGES THAT 
IT MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY, AND WITHOUT DURESS, 
AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER 
WITH ITS ATTORNEYS.
     The parties have executed this Agreement on July 31, 1997.
Signed in the presence of:               COGNITRONICS CORPORATION

______________________________
                              By_________________________________
______________________________     Brian J. Kelley
                              Its President, duly authorized



                              FLEET NATIONAL BANK
_____________________________

_____________________________     By__________________________________
                              John V. Raleigh
                              Its Vice President
STATE OF CONNECTICUT     )
                         ) ss: Stamford
COUNTY OF FAIRFIELD     )

     On this the 31st day of July, 1997, before me, the undersigned officer, 
personally appeared Brian J. Kelley who acknowledged himself to be the 
President of COGNITRONICS CORPORATION, a New York corporation, and that he, as 
such officer, being authorized so to do, executed the foregoing instrument for 
the purposes therein contained and acknowledged the same to be his free act 
and deed individually and as such officer, and the free act and deed of the 
corporation.

     IN WITNESS WHEREOF, I hereunto set my hand.
                    _________________________________
                    Commissioner of the Superior Court


STATE OF CONNECTICUT     )
                         ) ss: Stamford
COUNTY OF FAIRFIELD     )

     On this the 31st day of July, 1997, before me, the undersigned officer, 
personally appeared John V. Raleigh, who acknowledged himself to be the Vice 
<PAGE> 22
President of FLEET NATIONAL BANK, a national banking association, and that he, 
as such officer, being authorized so to do, executed the foregoing instrument 
for the purposes therein contained and acknowledged the same to be his free 
act and deed individually and as such officer, and the free act and deed of 
the national banking association.

     IN WITNESS WHEREOF, I hereunto set my hand.

                    _________________________________
Commissioner of the Superior Court