EXHIBIT 10(L)



                              EMPLOYMENT AGREEMENT

                  THIS AGREEMENT,  made and entered into as of June 25, 1999, by
and between Telebyte Technology, Inc., a Nevada corporation (the "Company"), and
Michael Breneisen (the "Executive").

                                    RECITALS:

         1.       The  Company  wishes to employ the  Executive  upon the terms
and subject to the  conditions  set forth in this Agreement.

         2.       The  Executive  is willing to serve in the employ of the
Company  upon the terms and  subject tothe conditions set forth in this
Agreement.

                  NOW,  THEREFORE,  in  consideration  of the  foregoing and the
mutual  promises  and  agreements  hereinafter  set forth,  the  Company and the
Executive hereby agree as follows:

1.       EMPLOYMENT; DUTIES.

                  (a) The Company  hereby  employs the  Executive as  President,
Chief  Operating  Officer and Chief  Financial  Officer of the Company,  and the
Executive hereby accepts such employment.

                  (b) In his capacity as President,  Chief Operating Officer and
Chief Financial Officer of the Company,  the Executive shall report to the Chief
Executive Officer of the Company and shall have such responsibilities and duties
consistent  with his respective  positions,  and of such a nature as are usually
associated  with his offices as may be designated from time to time by the Board
of Directors of the Company (the "Board of Directors").

                  (c) The Executive  shall  faithfully and diligently  discharge
his duties hereunder,  including the implementation of the policies  established
by the Board of Directors.  In the performance of his duties and functions under
this  Agreement,  the Executive shall devote such time as is consistent with his
position as President, Chief Operating Officer and Chief Financial Officer.

                  (d) During the  Employment  Term,  the  Employee  shall (i) if
elected or appointed, serve as (a) an officer of any subsidiaries of the Company
in existence or hereafter  created or acquired and (b) a Director of the Company
and/or  any  such  subsidiaries  of the  Company,  and (ii)  serve as the  Chief
Executive  Officer of the Company's  subsidiary,  DeliverNextDay.com,  Inc. (the
"Subsidiary")  for so long as the Company has the power to appoint the  Employee
to such positions and such Subsidiary is in existence,  in each case without any
additional compensation for such services.


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                                       11



                  (a)  Initial  Term.  Unless  renewed or sooner  terminated  as
provided  herein,  the initial term (the "Initial Term") of this Agreement shall
begin on the date hereof and shall continue for a period of three (3) years.

                  (b) Renewal  Term.  After the  expiration of the Initial Term,
this Agreement shall be deemed renewed for a successive three (3) year term, and
thereafter  for  successive  two year terms  (such  three (3) year term and each
successive two (2) year term being hereinafter referred to as a "Renewal Term"),
unless the  Company or the  Executive  gives  written  notice to the other on or
prior to the date which is one (1) year prior to the end of the Initial  Term or
any Renewal Term, of the election to terminate  this Agreement at the end of the
Initial Term or the then current  Renewal Term. The Initial Term and any Renewal
Terms shall be hereinafter collectively referred to as the "Employment Term".

3.       COMPENSATION.

                  (a) Salary. The Company shall pay the Executive an annual base
gross  salary  which  is not  less  than  $75,000  per  year (as the same may be
increased from time to time as hereinafter provided, the "Salary").

                  The Salary may be increased (but not  decreased)  from time to
time by the Board of  Directors,  and shall in any  event be  subject  to annual
review at the meeting of the Board of Directors immediately following the annual
meeting of the shareholders of the Company.

                  (b)      Incentive  Compensation.  The  Executive  shall be
entitled  to an  annual  performance bonus as may be determined by the Board of
Directors, in its sole discretion.

4.       BENEFITS.

                  (a)  Benefit  Plans.   The  Executive  shall  be  entitled  to
participate  in and  receive the  benefits  under any  pension,  profit-sharing,
bonus, stock purchase,  stock option,  stock bonus,  health,  life, accident and
disability  insurance plans or programs and any other employee benefit or fringe
benefit plans,  perquisites or  arrangements  which the Company makes  available
generally  to other  employees,  including,  without  limitation,  to the senior
executive officers of the Company, to the extent that the Executive is otherwise
eligible to participate in such plans or arrangements pursuant to the provisions
of such plans or arrangements as they may be in effect from time to time.

                  (b) Automobile. The Company shall provide the Executive with a
leased vehicle, substantially equivalent to the vehicle presently being provided
to the Executive,  for use by the Executive. In addition, the Company shall also
pay for insurance,  maintenance,  fuel and other costs incurred by the Executive
in the use and maintenance of such a vehicle.

                  (c)      Life Insurance; Medical Benefits.



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                           (i) The Company  shall,  at its own cost and expense,
                  (x)  obtain a whole life  insurance  policy on the life of the
                  Executive  in the amount of  $250,000,  which  policy shall be
                  owned  by  the   Executive   and  shall  be  payable  to  such
                  beneficiary or  beneficiaries  as the Executive may designate,
                  and, (y) provide medical benefits at least equivalent to those
                  benefits  which the  Executive  heretofore  received,  for the
                  period required herein under Section 6 hereof.

                           (ii) In the event the acquired  whole life  insurance
                  referred  to  in  (c)(i)   above  is   terminated,   and  such
                  termination  is due to a default  by the  Company  under  such
                  policy or is otherwise  the fault of the Company,  the Company
                  shall obtain an equivalent life insurance  policy and maintain
                  such life insurance policy for the period required herein.  In
                  the event the  acquired  whole life  insurance  referred to in
                  (c)(i) above is  terminated,  and such  termination is not the
                  result of any action or inaction by the  Company,  the Company
                  shall purchase such whole life insurance as shall be available
                  at a cost  equivalent  to  the  premium  being  paid  for  the
                  acquired whole life  insurance,  and maintain the same for the
                  period required herein.

                  (d) Annual Leave and Holidays. The Executive shall be entitled
to four (4) weeks paid  annual  leave  during each year of the  Employment  Term
hereof.  To the extent the Executive  shall not take four (4) weeks annual leave
during any year, the unused time shall accrue and carry forward to future years.
Upon  termination of the  Executive's  employment for any reason,  the Executive
shall  receive a cash  payment for any accrued but unused  annual  leave up to a
maximum of six (6) months.  The Executive  shall be entitled to such holidays as
determined  by the  Company's  policy with respect to employees in effect on the
date hereof, and as amended.

                  (e) Expenses. The Company shall pay or reimburse the Executive
for all reasonable  expenses  actually  incurred or paid by the Executive in the
performance of his services  hereunder  (including 100% of reasonable travel and
entertainment  expenses),  provided,  that the expenses are consistent  with the
Company's  established  policies with respect to the  incurrence of expenses and
the Executive  submits expense  statements or vouchers or such other  supporting
information as the Company may reasonably require of the Executive.

5.       TERMINATION OF EMPLOYMENT.

         (a)      Notwithstanding  the  provisions  of paragraph 2 hereof,  this
Agreement  may be  terminated  as follows:

                           (i)      Upon Notice.  At the end of the Employment
 Term with respect to which notice is given by the  Executive or the Company
 pursuant to paragraph 2(b) hereof  electing not to renew this Agreement.

                           (ii)     Death. The Executive's  employment hereunder
 shall terminate  automatically as of the date of his death.




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                           (iii)  Disability.  The  Company  may  terminate  the
                           Executive's   employment   hereunder   after   having
                           established the Executive's  "Disability" (as defined
                           below), by giving the Executive written notice of its
                           intention to terminate the Executive's employment due
                           to such  Disability.  For purposes of this Agreement,
                           "Disability"  means  the  Executive's   inability  to
                           perform substantially his duties and responsibilities
                           to the  Company  by  reason of a  physical  or mental
                           incapacity or infirmity  (i) for a continuous  period
                           of one hundred  eighty (180) days,  not including any
                           permitted annual leave days or holidays;  or (ii) for
                           a cumulative  period of one hundred eighty (180) days
                           in  any  twelve  (12)  month  period,  not  including
                           permitted annual leave days or holidays ; or (iii) at
                           such earlier time as the  Executive  submits  medical
                           evidence   satisfactory   to  the  Company  that  the
                           Executive  has a  physical  or mental  disability  or
                           infirmity that will likely prevent the Executive from
                           substantially     performing     his    duties    and
                           responsibilities  for one  hundred  and eighty  (180)
                           days or  longer.  In the  event  of any  disagreement
                           between the  Executive  and the Company as to whether
                           the Executive is physically or mentally incapacitated
                           so as to  constitute a  "Disability"  hereunder,  the
                           question of such incapacity  shall be submitted to an
                           impartial and reputable  physician selected by mutual
                           agreement  of  the  Company  and  the  Executive,  or
                           failing such  agreement,  selected by two  physicians
                           (one of whom shall have been selected by the Company,
                           and   the   other   by  the   Executive),   and   the
                           determination  of the question of such  incapacity by
                           such  physician  shall be final and binding  upon the
                           Company and the Executive.  The Company shall pay the
                           fees  and  expenses  of  such   physician,   and  the
                           Executive  shall  submit to any medical  examinations
                           reasonably necessary to enable such physician to make
                           a   determination   as  to  whether  the  Executive's
                           incapacity constitutes a Disability hereunder.

                           (iv)     Cause.   The  Company  shall  have the right
                          to  terminate  the Executive's employment for "Cause".
                          For purposes of this Agreement, "Cause" shall mean:

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                                    (i) the willful and continued failure by the
                                    Executive  to  perform   substantially   his
                                    duties to the  Company  (other than any such
                                    failure   resulting  from  his   Disability)
                                    within a  reasonable  period of time after a
                                    written demand for  substantial  performance
                                    is delivered  to the  Executive by the Board
                                    of  Directors,   which  demand  specifically
                                    identifies  the manner in which the Board of
                                    Directors  believes  that the  Executive has
                                    not substantially performed his duties; (ii)
                                    the willful  misconduct  by the Executive in
                                    the  performance  of his material  duties to
                                    the  Company;  (iii) the  grossly  negligent
                                    performance  by the  Executive of his duties
                                    to the Company,  if such  grossly  negligent
                                    performance  is  determined  by the Board of
                                    Directors  to have  had or to be  reasonably
                                    likely to have a material  adverse effect on
                                    the business, assets, prospects or financial
                                    condition of the Company,  or (iv)  material
                                    breach by the Executive of Section 7 hereof.

                           (v)  Termination  for Good Reason.  The Executive may
                           terminate  his  employment  under this  Agreement for
                           "Good Reason." For purposes of this Agreement,  "Good
                           Reason" shall mean,  without the Executive's  express
                           written  consent,  (i) an  alteration in any material
                           respect  in the  nature or status of the  Executive's
                           responsibilities  (including  reporting)  from  those
                           contemplated  by  Section  1(a) and  1(d)(ii)  or the
                           assignment   to   the   Executive   of   any   duties
                           inconsistent   with   the   Executive's   status   as
                           President,   Chief   Operating   Officer   and  Chief
                           Financial  Officer of the Company or Chief  Executive
                           Officer of the Subsidiary (provided,  however,  "Good
                           Reason"  shall not include any of the  forgoing  with
                           respect  to the  Subsidiary  in the  event  that  the
                           Company  does  not  have the  power  to  appoint  the
                           Executive   as  Chief   Executive   Officer   of  the
                           Subsidiary   and/or   the   Subsidiary   is   not  in
                           existence),  or (ii) a reduction  in the  Executive's
                           compensation  from that  contemplated by Section 3(a)
                           (as the same may be increased from time to time),  or
                           (iii)  the  willful  and  continued  failure  by  the
                           Company  to  substantially  perform  its  obligations
                           under this  Agreement  within a reasonable  period of
                           time after written demand for substantial performance
                           is delivered to the Company by the  Executive,  which
                           demand  specifically  identifies  the manner in which
                           the  Executive  believes  that  the  Company  has not
                           substantially  performed  its  duties,  or  (iv)  the
                           relocation  of  the  Executive  to  a  facility  or a
                           location more than 50 miles from the Executive's then
                           present  location,   without  the  Executive's  prior
                           express written consent.

                           (vi) Transfer  Event.  The  Executive  shall have the
                           right to terminate  this  Agreement  upon thirty (30)
                           days' prior  written  notice to the  Company,  or any
                           successor of the Company,  as the case may be, in the
                           event of a "Transfer  Event" (as defined below).  For
                           purposes of this Agreement, "Transfer Event" means:


<PAGE>


                           (A) a Transfer of substantially  all of the assets of
                           the Company,  (B) a change in control of the board of
                           directors of the Company pursuant to which any single
                           Person  or two or  more  Persons  acting  in  concert
                           (other than one or more  Affiliates of the Company on
                           the date  hereof)  acquires  control of such board of
                           directors  or (C) the Transfer of at least 33 1/3% or
                           more of the voting  equity  interests  in the Company
                           (or any  parent  of the  Company),  whether  by sale,
                           merger,  consolidation  or  otherwise,  to any single
                           Person  or two or more  Persons  acting  in  concert;
                           provided that two or more Persons shall be considered
                           to be acting in concert  for  purposes of clauses (B)
                           and (C) hereof only if such  Persons  would have been
                           considered  to be acting in concert as a "group"  for
                           purposes of Section 13(d) of the Securities  Exchange
                           Act of 1934, as amended,  for such purposes  treating
                           voting  equity  interests  of  the  Company  held  or
                           acquired  by such  Persons as if such  voting  equity
                           interests were equity  securities in respect of which
                           a Schedule 13D would be required to be filed with the
                           Securities  and  Exchange  Commission  and  as if the
                           requisite  percentage and other threshold  conditions
                           to such filing  were  satisfied;  provided,  further,
                           that a "Transfer Event" shall not include a pledge of
                           the voting  equity  interests  in the  Company to the
                           holders of debt financing or any refinancing  thereof
                           (but  shall  include  a  Transfer  arising  from  the
                           exercise of such holders  rights under such  pledge).
                           The  Company  agrees  to give  the  Executive  prompt
                           written  notice  of the  occurrence  of any  Transfer
                           Event. For purposes of this Section 5(a)(vi):

"Person"  means  any  individual,   corporation,   partnership,  joint  venture,
association,   joint-stock  company,  trust,   unincorporated   organization  or
governmental body.

"Affiliate"  means, with respect to any Person,  any other Person which directly
or indirectly  controls,  is controlled by or is under common  control with such
Person.

"Transfer" means sell,  transfer,  convey, lease and/or deliver (other tenses of
the term have similar meaning) or sale, transfer, assignment,  conveyance, lease
and/or delivery, as indicated by the context.

                  (b) In the event that this Agreement is terminated pursuant to
Section (a) above, except as set forth in the immediately  succeeding  sentence,
the  Executive  shall  be  released  from any  further  obligations  under  this
Agreement,  and the  Company  shall be  released  from any  further  obligations
hereunder, except for obligations accrued to the date of termination,  including
under Section 6 hereof.  Termination of this Agreement  pursuant to Section 5(a)
shall in no way  abrogate or relieve the  Executive of his  obligations,  to the
extent applicable, under Sections 7 and 8 hereof.

6.       EFFECT OF TERMINATION.

                  (a)  Upon  and  following   termination  of  the   Executive's
employment  because of death as  provided  in  subsection  5(a)(ii)  above,  the
Company shall (i) continue to pay to the Executive's  spouse, if any, the amount
of the  Executive's  Salary as  provided  in Section  3(a) at the rate in effect
immediately prior to termination of his employment, for a period of one (1) year
from the date of termination  of the  Executive's  employment,  (ii) continue to
provide  medical  benefits  equivalent to the medical  benefits  contemplated in
Section 4(a) hereof for the Executive's  spouse, if any, for a period of one (1)
year  from the date of  termination  of the  Executive's  employment,  and (iii)
continue to provide an automobile as contemplated in Section 4(b) hereof, to the
Executive's  spouse, if any, for a period of twelve (12) months from the date of
termination of the Executive's employment.


<PAGE>


                  (b)  Upon  and  following   termination  of  the   Executive's
employment because of Disability as provided in subsection  5(a)(iii) above, the
Company shall (i) continue to pay the  Executive,  or, in the event of the death
of the Executive,  his spouse,  the amount of the Executive's Salary as provided
in Section 3(a) at the rate in effect  immediately  prior to  termination of his
employment,  for a  period  of  twelve  (12)  months,  less  the  amount  of any
disability  payments made by the Company or any Company  plan,  (ii) continue to
provide  medical  benefits  equivalent to the medical  benefits  contemplated in
Section 4(a) hereof and to maintain  the whole life  insurance  contemplated  in
Section 4(c) hereof for a period of one year from the date of termination of the
Executive's  employment,   and  (iii)  continue  to  provide  an  automobile  as
contemplated  in Section 4(b) hereof for a period of twelve (12) months from the
date of termination of the Executive's employment.

                  (c) In the event the  Executive's  employment is terminated by
the  Executive  for  Good  Reason,  or by the  Company  other  than  for  death,
Disability or Cause,  the Company shall make a lump sum payment to the Executive
equal to the  greater of (i) his Salary for the  remainder  of the then  current
Employment  Term or (ii) an amount  equal to one (1)  year's  Salary at the then
current rate, provided, however, that if notice has been sent under Section 2(b)
hereof prior to such  termination of  employment,  the Company shall make a lump
sum payment to the Executive equal to the  Executive's  Salary for the remainder
of the then  current  Employment  Term (or,  in each  case,  in the event of the
subsequent death of the Executive,  to his spouse,  if any), and, shall continue
to provide medical benefits  equivalent to the medical benefits  contemplated in
Section 4(a) hereof,  and to maintain the whole life insurance  contemplated  by
Section 4(c) hereof for such period.

                  (d) In the event the Executive's employment is terminated upon
the occurrence of a Transfer Event, the Company shall make a lump sum payment to
the Executive in an amount equal to two and  ninety-nine  one hundredths  (2.99)
times  the  Employee's  "base  amount,"  as such  term  is  defined  in  Section
280G(b)(3)  of the  Internal  Revenue  Code of 1986,  as amended  (the  "Code").
Notwithstanding  anything to the contrary  contained in this  paragraph (d), the
Company shall reduce the amount of any payment referred to in this paragraph (d)
to the extent that the Company is advised by tax counsel selected by the Company
that any portion of any other payment in the nature of  compensation  to be made
to the Executive  (whether pursuant to this Agreement or otherwise) would not be
deductible by the Company as a result of the  application of Section 280G of the
Code;  provided,  however,  that the payments  referred to in this paragraph (d)
shall not be reduced to the extent that such  counsel  advises the Company  that
any  amount of such  payments  in the nature of  compensation  to be made to the
Executive is "reasonable"  within the meaning of Section 280G(b)(4) of the Code;
provided  further that no payment which is payable to the Executive  pursuant to
this  paragraph  (d) shall be reduced if, in the opinion of such  counsel,  such
payment does not constitute a "parachute  payment" within the meaning of Section
280G(b)(2) of the Code. Under no  circumstances  shall the amount payable to the
Executive  under this paragraph (d) be reduced to an amount less than the amount
payable pursuant to paragraph (c) hereof.

                  (e) Notwithstanding anything to the contrary contained in this
Agreement,  in the event of a  termination  by the  Company  of the  Executive's
employment hereunder,  or the termination by the Executive of his employment for
Good Reason or upon the occurrence of a Transfer Event,  the Executive shall not
be required to seek other employment in mitigation of his damages, nor shall the
possibility or fact of any other such employment and the compensation  which the
Executive  might  reasonably be expected to receive,  actually  receives,  or to
which the  Executive  becomes  entitled,  by reason  thereof,  be  considered as
mitigating his damages.


<PAGE>


7.       COVENANTS.

                  (a) In view  of the  fact  that  the  Company  is  engaged  in
specialized businesses, which businesses are conducted throughout the world, and
the information,  research and marketing data developed by the Company or any of
its  subsidiaries  or affiliates are  confidential,  the Executive  agrees that,
during his employment  and for a period of one (1) year from the  termination of
his employment  with the Company either (i) by the Company for Cause or based on
the Executive's  Disability or (ii) by the Executive other than for Good Reason,
he will not (A)  directly or  indirectly  engage in the  business  substantially
conducted by the Company at the date of such termination,  either for himself or
for any person,  employer,  business  or other  entity in  competition  with the
Company,  (B)  engage in any such  business  on his own  account,  or (C) become
interested  in any such  business,  directly or  indirectly,  as an  individual,
partner,  shareholder,  officer, director,  principal, agent, employee, trustee,
consultant or in any other  relationship or capacity;  provided,  however,  that
ownership of less than 5% of any class of  outstanding  securities  of a company
registered  pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended,  shall not be  deemed  to  constitute  engaging,  participating  in, or
becoming interested in any such business. Notwithstanding the foregoing, if this
Agreement  shall not be renewed at the end of the  Initial  Term or any  Renewal
Term, the Executive agrees to be subject to the foregoing  restrictive covenants
during the one-year  period  following the  termination of this Agreement if the
Company  pays to him during such one year  period an amount  equal to the Salary
payable to him at the time of such termination.  Such Salary shall be payable to
the Executive in equal installments on a weekly basis.

                  (b)  During  his  employment  and for a period of one (1) year
thereafter,  the Executive and any entity controlled by the Executive shall not,
directly  or  indirectly,  (i) make any false or  malicious  statement,  oral or
written,  which is injurious to the  business,  reputation  or operations of the
Company, its officers or directors,  as applicable,  or which may interfere with
the good will of the Company or its relations  with its customers and suppliers,
or (ii) solicit, interfere with, hire, offer to hire or induce any person who is
an  officer,  employee  or  agent  of  the  Company  to  discontinue  his or her
relationship with the Company or any subsidiary or affiliate of the Company,  or
to accept employment by any other entity or person.


<PAGE>


                  (c) The  Executive  agrees to keep  secret  and  retain in the
strictest  confidence  all  confidential  matters  which  relate to the Company,
including,  without limitation,  customer lists, trade secrets, pricing policies
and  other  confidential  business  affairs  of  the  Company  and  any  of  its
subsidiaries or affiliates ("Confidential  Information") learned by him from the
Company or any of its  subsidiaries  or affiliates  and not to disclose any such
Confidential   information   to  anyone  outside  the  Company  or  any  of  its
subsidiaries  or affiliates,  whether during or after his period of service with
the Company, except in the course of performing his duties hereunder;  provided,
however,  Confidential  Information  shall not include  information  that (i) is
known generally by the public on the date of the Executive's  termination,  (ii)
has  otherwise  come into the public domain  without a breach by the  Executive,
under this Agreement,  (iii) is required to be disclosed  pursuant to applicable
Federal,  state or local laws or judicial  process or (iv) was already  known to
the Executive (as reasonably established by him) at the time it became available
to him by reason of his employment  with the Company and was obtained  without a
breach of any agreement of confidentiality  or  non-disclosure.  Upon request by
the  Company,  the  Executive  agrees to deliver  promptly to the  Company  upon
termination  of his  employment,  or at any time  thereafter  as the Company may
request, all Company memoranda,  notes,  records,  reports,  manuals,  drawings,
designs,  computer  files in any  media  and  other  documents  (and all  copies
thereof)  containing  such  Confidential  Information  and all  property  of the
Company or any of its  subsidiaries  or affiliates  which the Executive may then
possess or have under his control.

                  (d) The Executive agrees that all processes,  technologies and
inventions,  including  new  contributions,   improvements,  formats,  packages,
programs, systems, machines, compositions of matter manufactured,  developments,
applications  and  discoveries  which are related in any manner to the  business
(commercial or  experimental)  of the Company during the term of the Executive's
employment, whether patentable or not, conceived, developed, invented or made by
the  Executive,  or by the Executive  jointly with others during the term of his
employment  with the Company,  or by the Company or its  affiliates  or on their
behalf (collectively, "New Developments"), shall belong to the Company, and, the
Company  shall have the sole right to all  proceeds  arising  from or related to
such New Developments.  The Executive shall further:  (a) promptly disclose such
New Developments to the Company;  (b) assign to the Company,  without additional
compensation, all patent or other rights to such New Developments for the United
States and foreign  countries;  (c) sign all papers  necessary  to carry out the
foregoing;  and (d) give  testimony in support of his  inventorship,  all at the
sole cost and expense of the Company.

                  (e) If the Executive  commits a material  breach of any of the
provisions  of this  Section 7, the  Company  shall have the right and remedy to
have the  provisions  of this  Agreement  specifically  enforced by any court of
competent  jurisdiction,  it being  acknowledged  and agreed to by the Executive
that any such breach will cause irreparable injury to the Company and that money
damages  will not provide an  adequate  remedy to the  Company.  Such rights and
remedies  shall be in  addition  to,  and not in lieu of,  any other  rights and
remedies  available to the Company at law or in equity.  The  provisions of this
Section 7 shall survive the expiration or termination of this Agreement.

                  (f) Although the restrictions  contained in this Section 7 are
considered to be fair and reasonable in the circumstances, it is recognized that
restrictions  of the nature  contained in this Section 7 may fail for  technical
reasons;  accordingly,  if any of such restrictions shall be adjudged to be void
or unenforceable for whatever reason,  but would be valid if part of the wording
thereof  were  deleted,  or the  period  thereof  reduced or the area dealt with
thereby  reduced in scope,  the  restrictions  contained in this Section 7 shall
apply,  at the  election  of the  Company,  with  such  modifications  as may be
necessary  to make them valid,  effective  and  enforceable,  in the  particular
jurisdiction   in  which  such   restrictions   are   adjudged  to  be  void  or
unenforceable.

                  (g) For purposes of this Section 7, the term  "Company"  shall
mean and include any and all subsidiaries, parents and affiliates of the Company
in existence from time to time. For purposes of Section 7 of this Agreement, the
term "affiliate"  shall have the meaning set forth in Rule 405 promulgated under
the Securities Act of 933, as amended.

8.       MISCELLANEOUS.



<PAGE>


                  (a) This Agreement or any rights or obligations  hereunder may
not be assigned by any of the parties hereto  without the prior written  consent
of the other party;  provided,  however,  that this Agreement shall inure to the
benefit of and be binding  upon the  successors  and assigns of the Company upon
any sale of all or substantially all of the Company's assets, or upon any merger
or  consolidation  of the  Company  with or into any other  corporation,  all as
though  such  successors  and  assigns  of  the  Company  and  their  respective
successors and assigns were the Company, as the case may be.

                  (b) This  Agreement  and the  relationships  of the parties in
connection  with the subject  matter of this  Agreement  shall be construed  and
enforced according to the laws of the State of New York without giving effect to
the conflict of laws rules thereof.

                  (c) This Agreement contains the full and complete agreement of
the parties relating to the employment of the Executive hereunder and supersedes
all prior agreements,  arrangements or understandings,  whether written or oral,
relating  thereto.  Neither this  Agreement,  nor any provision  hereof,  may be
amended, modified, waived or supplemented except by written instrument signed by
the parties hereto, and a written waiver of any of the provisions shall be valid
and  effective  only if signed by each of the parties  hereto and shall be valid
and effective only in the instance for which given.

                  (d) If any  provision of this  Agreement is held to be invalid
or  enforceable  by any  judgment of a tribunal of competent  jurisdiction,  the
remainder of this  Agreement  shall not be affected by such  judgment,  and this
Agreement  shall be  carried  out as near to its  original  terms and  intent as
possible.

                  (e) All provisions of this Agreement  which,  by their nature,
should survive  termination of this  Agreement,  including,  but not limited to,
Section 7, shall survive said termination.

                  (f) All notices,  requests  and demands  given to or made upon
the  respective  parties  hereto shall be deemed to have been  received five (5)
business  days after the date of mailing when mailed by certified  mail,  return
receipt  requested,  postage  prepaid,  or one  business  day  after the date of
delivery  by a  recognized  overnight  delivery  service,  or  upon  receipt  of
confirmation of transmission  when sent by telecopier,  addressed to the parties
at their  addresses  set forth  below or to such other  addresses  furnished  by
notice given in accordance with this  subsection (f): (a) if to the Company,  to
Telebyte  Technology,  Inc.,  270  Pulaski  Road,  Greenlawn,  New  York  11740,
Telecopier No.: (631) 385-8184 Attention:  Board of Directors, and (b) if to the
Executive, at his address set forth on the signature page hereof.

                  (g) No failure or delay by any party in exercising  any right,
power or privilege  hereunder shall operate as a waiver  thereof,  nor shall any
single or  partial  exercise  thereof  preclude  any other or  further  exercise
thereof or the exercise of any other right, power or privilege.

                  (h) The  headings in this  Agreement  are for  convenience  of
reference  only and shall not control or affect the meaning or  construction  of
this Agreement.


<PAGE>


                  (i)  This   Agreement   may  be  signed   in  any   number  of
counterparts, each of which shall be deemed an original, but when taken together
as a whole shall constitute one and the same instrument.

                  (j) The Company may withhold  from any amounts  payable  under
this Agreement, any federal, state and local income taxes, social security taxes
and other taxes and deductions as required by applicable law.

                  (k) (i) The  Executive  and the Company agree and consent that
(A) any controversy or claim arising out of or relating to this  Agreement,  its
scope, or the breach or  interpretation of any provision hereof shall be settled
by  arbitration  before  a panel of  three  (3)  arbitrators  and  otherwise  in
accordance   with  the  rules  then   obtaining  of  the  American   Arbitration
Association; (B) such arbitration shall be held in the City of Hauppauge, County
of Suffolk and State of New York; (C) the award in any such arbitration shall be
final,  binding  and  conclusive;  and (D)  judgment  on any  award  of any such
arbitration,  including, but not limited to specific performance, may be entered
in any court having  jurisdiction  thereof.  Notice of any arbitration  shall be
sufficient if given in accordance with Section 8(f) hereof.

                           (ii)     Each party shall pay its or his own expense
of  arbitration,  and the  expenses
of the  arbitrators  and the  arbitration  proceeding  shall be equally  shared;
provided,  however,  that, if, in the opinion of a majority of the  arbitrators,
any claim or defense was  unreasonable,  the arbitrators may assess,  as part of
their  award,  all or any part of the  arbitration  expenses  of the other party
(including   reasonable   attorneys'  fees)  and  of  the  arbitrators  and  the
arbitration  proceeding  against the party  raising such  unreasonable  claim or
defense;  provided,  further, that, if the arbitration proceeding relates to the
issue of "Cause"  for  termination  of  employment,  (a) if, in the opinion of a
majority of the arbitrators,  "Cause" existed,  the arbitrators shall assess, as
part of their award, all of the arbitration  expenses of the Company  (including
reasonably   attorneys'  fees)  and  of  the  arbitrators  and  the  arbitration
proceeding  against the Executive or (b) if, in the opinion of a majority of the
arbitrators,  "Cause" did not exist,  the arbitrators  shall assess,  as part of
their  award,  all of the  arbitration  expenses  of  the  Executive  (including
reasonable   attorneys'  fees)  and  of  the  arbitrators  and  the  arbitration
proceeding against the Company.

                  (l) The Company will pay to the  Executive an amount that,  on
an after-tax basis (including federal income,  excise and social security taxes,
and state and local income  taxes),  equals any excise tax that is determined to
be  payable  by the  Executive  pursuant  to  Section  4999 of the Code (and any
interest or penalties  related to the  imposition of such excise tax), by reason
of entitlements under this Agreement  (including this paragraph (l)), as well as
entitlements   outside  of  this   Agreement   that  are  described  in  Section
280G(b)(2)(A)(i)  of the Code  (including  without  limitation  under  the Stock
Option  Agreement,  dates as of June  29,  1999,  between  the  Company  and the
Executive),  but after  taking into account the payment  reduction  described in
Section 6(d) hereof.


<PAGE>




                  IN WITNESS  WHEREOF,  the parties have  executed and delivered
this Agreement as of the date first above written.

                                                       TELEBYTE TECHNOLOGY, INC.

                                                 By: __________________________
                                                           Kenneth S. Schneider
                                                              Chairman and CEO


                                                  -----------------------------
                                                           Michael Breneisen
                                                           12 Olympia Place
                                                  East Northport, New York 11731








                  STOCK OPTION  AGREEMENT made as of the 25th day of June,  1999
between TELEBYTE  TECHNOLOGY,  INC., a Nevada  corporation (the "Company"),  and
MICHAEL BRENEISEN (the "Optionee").

                WHEREAS, the Optionee is an officer and director of the Company;

                  WHEREAS,  the Company  desires to provide to the Optionee an
additional  incentive to promote the success of the Company;

                  NOW, THEREFORE, in consideration of the foregoing, the Company
hereby grants to the Optionee the right and option to purchase  shares of common
stock,  par value $.01 per share,  of the Company  ("Common  Shares")  under and
pursuant to the terms and  conditions  of the  Company's  1999 Stock Option Plan
(the "Plan") and upon and subject to the following terms and conditions:

                1. GRANT OF OPTION.  The Company  hereby  grants to the Optionee
the right and option (the  "Option")  to  purchase  up to two  hundred  thousand
(200,000)  Common  Shares  of the  Company  (the  "Option  Shares")  during  the
following periods, subject to acceleration as provided in Section 6 hereof:

                (i) all or any part of one  hundred  thousand  (100,000)  of the
Option  Shares (the "2004 Option  Shares")  may be  purchased  during the period
commencing  June 30,  2004 and  terminating  at 5:00 P.M.  on June 29, 2009 (the
"Expiration Date"); and

                (ii)  all or any  part of the  remaining  one  hundred  thousand
(100,000)  Option Shares (the "2005 Option Shares") may be purchased  during the
period commencing January 1, 2005 and terminating at 5:00 p.m. on the Expiration
Date.

                  Notwithstanding the foregoing, the Option shall be exercisable
sooner than the dates set forth above as follows:

                           (i)      In the event the Company's  Consolidated Net
Sales (as hereinafter defined)for any  consecutive  four  (4)  fiscal  quarters,
or  Market  Capitalization  (as hereinafter  defined)  as of the  close  of
business  on each  day  during  any consecutive three (3) month period, during
the period commencing with the fiscal quarter  ending  September  30, 1999 and
ending with the fiscal  quarter  ending March 31, 2004 equals or exceeds six
million dollars ($6,000,000),  the Optionee shall  have the right to  purchase
up to forty  thousand  (40,000)  of the 2004 Option Shares.


<PAGE>



                                       15


                            (ii)     In the event the Company's  Consolidated
Net Sales for any consecutive four (4)fiscal quarters,  or Market
Capitalization  as of the close of business on each day during any consecutive
three (3) month period,  during the period commencing with the fiscal  quarter
ending  September  30, 1999 and ending with the fiscal quarter   ending
March  31,  2004  equals  or  exceeds  ten  million   dollars ($10,000,000),
the  Optionee  shall  have  the  right to  purchase  up to sixty thousand
(60,000) of the 2004 Option Shares.

                           (iii)    In the event the Company's  Consolidated Net
Sales for any consecutive four (4) fiscal quarters,  or Market  Capitalization
as of the close of business on each day during any consecutive three (3) month
period,  during the period commencing with the fiscal  quarter ending  September
30, 1999 and ending with the fiscal quarter  ending  September 30, 2004 equals
or exceeds  fifteen  million  dollars ($15,000,000),  the Optionee  shall have
the right to purchase up to one hundred thousand (100,000) of the 2005 Option
Shares.

                  The  acceleration  provisions set forth above shall only apply
once  as  to  each  threshold.   Accordingly,  for  example,  if  the  Company's
Consolidated  Net Sales for the four  fiscal  quarters  ending June 30, 2000 and
June 30, 2001, or Market  Capitalization as of the close of business on each day
during any consecutive three (3) month period during each such period,  are each
$7,000,000,  the Optionee  shall have the right to purchase only up to 40,000 of
the 2004 Option Shares.

                  However,  if the  Company's  Consolidated  Net Sales reach the
$10,000,000 or $15,000,000 threshold for a particular four fiscal quarter period
(or the Company's Market  Capitalization as of the close of business on each day
during any  consecutive  three (3) month  period  therein  reaches  either  such
amount,  as the case may be),  without first reaching a prior threshold  amount,
the  Optionee  shall be entitled to purchase  all Option  Shares as if the lower
threshold  had  also  been  met.  Accordingly,  for  example,  if the  Company's
Consolidated Net Sales for the four fiscal quarters ending June 30, 2001 (or the
Company's Market  Capitalization  as of the close of business on each day during
any consecutive  three (3) month period  therein) are  $11,000,000  (without the
$6,000,000  threshold having been satisfied for any prior period as contemplated
above),  the  Optionee  shall be  entitled to purchase up to 100,000 of the 2004
Option Shares.

                  As used  herein,  the term  "Consolidated  Net  Sales" for any
particular  fiscal quarter shall mean the Company's  consolidated  net sales for
such fiscal quarter determined in accordance with generally accepted  accounting
principles consistently applied, as audited and reported upon by the independent
certified  public  accountants of the Company with respect to  Consolidated  Net
Sales  for a  particular  fiscal  year  and  otherwise  in  conformity  with the
Company's  Securities and Exchange Commission quarterly reports. As used herein,
the term "Market Capitalization" shall mean the fair market value, as defined in
the Plan, of all then issued and outstanding Common Shares of the Company.

                  2. NATURE OF OPTION. The Option to purchase the initial ninety
seven thousand  eighty-seven  (97,087) Common Shares  effective each of June 30,
2004 and January 1, 2005 is intended to meet the  requirements of Section 422 of
the Internal  Revenue Code of 1986,  as amended,  relating to  "incentive  stock
options." The Option to purchase the remaining  Common Shares is not intended to
meet such requirements.


<PAGE>


                  3.       EXERCISE  PRICE.  The  exercise  price of each of the
Option Shares shall be one dollar and three cents ($1.03) (the "Option  Price").
The Company shall pay all original  issue or transfer  taxes on the exercise of
the Option.

                  4.       EXERCISE  OF  OPTIONS.  (a) The  Option  shall  be
 exercised  in  accordance  with  the provisions  of the Plan. As soon as
 practicable  after the receipt of notice of exercise and payment of the Optio
 Price as provided for below,  the Company shall tender to the Optionee
 certificates  issued in the Optionee's name evidencing the number of Option
Shares covered thereby.

                           (b)      The Option  Price shall be payable in the
manner set forth in Section 13 of the Plan and may, at the election of the
 Optionee,  be payable by the delivery of a Promissory Note in, or substantially
in, the form attached hereto as Exhibit A (the "Note"), payable to the order of
the Company in the principal amount of the balance of the  Option  Price.  The
payment of the Note shall be secured by the pledge by the Optionee to the
Company of the Option Shares acquired, as provided for in a Pledge Agreement in,
or  substantially  in, the form attached hereto as Exhibit B, to be entered into
concurrently therewith.

                5.       TRANSFERABILITY.  The Option  shall not be transferable
                           ---------------
of descent and  distribution  and,  during the  Optionee's  lifetime,  shall not
be exercisable by any person other than the Optionee.

                  6. ACCELERATION OF VESTING AND EXERCISING. (a) In the event of
a Transfer Event (as such term is defined in that certain  Employment  Agreement
dated as of June 25, 1999 between the Company and the Optionee (the  "Employment
Agreement")),  the death or disability of the Optionee,  the  termination of the
Optionee's  employment without Cause (as defined in the Employment Agreement) or
the termination by the Optionee of his employment for Good Reason (as defined in
the  Employment  Agreement),  all the  Options  shall  become  fully  vested and
immediately  exercisable  (in the case of a Transfer Event, on the day preceding
such event) until the Expiration Date.

                           (b)      In the event the Options become  exercisable
by reason of any of the provisions of Section 6(a), such Options shall remain
exercisable until the Expiration Date notwithstanding any subsequent termination
of employment with the Company or its subsidiaries for any reason whatsoever.

                  7.       INCORPORATION   BY  REFERENCE.   The  terms  and
conditions  of  the  Plan  are  hereby
incorporated by reference and made a part hereof.

                  8. NOTICES.  Any notice or other communication given hereunder
shall be deemed  sufficient if in writing and hand  delivered,  against  written
receipt,  or sent by registered or certified mail, return receipt requested,  or
overnight mail or courier addressed to the Company, 270 Pulaski Road, Greenlawn,
New York,  11740,  Attention:  Chairman of the Board and to the  Optionee at the
address indicated below.  Notices shall be deemed to have been given on the date
of hand  delivery or five (5) days after  mailing,  except  notices of change of
address, which shall be deemed to have been given when received.


<PAGE>




                  9.       BINDING  EFFECT.  This  Agreement  shall be binding
upon and inure to the benefit of the parties hereto and their respective legal
representatives, successors and assigns.

                  10.      ENTIRE  AGREEMENT.  This  Agreement,   together  with
the  Plan,  contains  the  entire understanding  of the parties  hereto  with
respect to the subject  matter  hereof and may be modified  only by an
instrument executed by the party sought to be charged.

                  IN WITNESS  WHEREOF,  the parties have executed this Agreement
as of the day and year first above written.

                                                TELEBYTE TECHNOLOGY , INC.

                                     By:        --------------------------------

                                                Kenneth S. Schneider
                                                Chairman and CEO







                                                --------------------------------
                                                 Michael Breneisen

                                                 12 Olympia Place
                                                 East Northport, New York 11731






                                                                       EXHIBIT A

                                                                          [Date]


$-------

                         NON-NEGOTIABLE PROMISSORY NOTE

         FOR VALUE RECEIVED,  MICHAEL BRENEISEN (the "Maker"), having an address
as  indicated  under his name,  hereby  promises to pay to the order of TELEBYTE
TECHNOLOGY,  INC., a Nevada  corporation  (the  "Payee"),  at 270 Pulaski  Road,
Greenlawn, New York or at such other place as the holder hereof may from time to
time  designate  in  writing,  in  immediately  available  New York  funds,  the
principal sum of  ______________________  THOUSAND DOLLARS  ($__,000),  together
with interest on the outstanding  principal  balance from the date hereof at the
rate of __ percent (__%) [the rate denominated as the "Prime Rate" and published
in The Wall Street  Journal on date of Note, or if required,  such other rate as
may be necessary to preserve the treatment of the options  which were  exercised
to purchase the Pledged  Shares (as  hereinafter  defined) as  "incentive  stock
options" under Section 422 of the Internal Revenue Code of 1986, as amended] per
annum.  The  principal  amount of this  Note,  together  with  accrued  interest
thereon, shall be payable in full ten (10) years from the date hereof; provided,
however,  that the  amounts  due under this Note shall be payable  sooner to the
extent of any proceeds  (net of sales  expenses)  received by the Maker from the
sale or other disposition of any Pledged Shares on or after the date hereof (the
net proceeds being immediately payable to the Payee); provided,  further that in
no event shall the Maker be required to pay from the proceeds of the sale of the
Pledged  Shares an amount in excess of the  amount  derived by  multiplying  the
number of Pledged Shares sold by one dollar and two cents ($1.02),  plus accrued
interest thereon.

         The  payment of all  amounts due under this Note is secured by a pledge
of _____ shares of Common Stock of the Payee (the "Pledged  Shares") acquired by
the Maker pursuant to a certain Stock Option Agreement dated as of June __, 1999
between the Payee and the Maker, which Pledged Shares are being pledged pursuant
to a Pledge  Agreement  of even  date by and  among  the  Maker,  the  Payee and
Certilman Balin Adler & Hyman, LLP, as pledge agent (the "Pledge Agreement").


<PAGE>



                                       18


         In the  event  (a) the Maker  shall  (i) fail to make any  payment  due
hereunder and such failure shall  continue  unremedied  for a period of ten (10)
days following the date of written notice of default;  (ii) admit in writing his
inability to pay his debts as they mature;  (iii) make a general  assignment for
the benefit of creditors;  (iv) be adjudicated a bankrupt or insolvent; (v) file
a  voluntary  petition  in  bankruptcy  or a  petition  or an answer  seeking an
arrangement with creditors; (vi) take advantage of any bankruptcy, insolvency or
readjustment  of debt law or statute or file an answer  admitting  the  material
allegations  of a petition  filed against him in any  proceeding  under any such
law; or (vii) have entered  against him a court order approving a petition filed
against him under the Federal  Bankruptcy  Act, which order is not discharged or
dismissed within 90 days; or (b) there shall be a breach of any  representation,
warranty, covenant or other agreement set forth in the Pledge Agreement and such
breach shall continue unremedied for a period of fifteen (15) days following the
date of written notice thereof, then and in each and every such event (an "Event
of Default"),  the Payee may, by written notice to the Maker, declare the entire
unpaid  principal  amount of this Note then outstanding plus accrued interest to
be forthwith due and payable  whereupon the same shall become  forthwith due and
payable.

         The Maker may prepay the principal  amount of this Note, in whole or in
part,  from time to time,  without  premium or penalty,  provided that the Maker
pays all interest  accrued with regard to the  principal  prepaid to the date of
prepayment.

         Notwithstanding  anything to the contrary  contained in this Note,  the
rate of  interest  payable on this Note shall never  exceed the maximum  rate of
interest permitted under applicable law.

         This Note may not be waived,  changed,  modified or discharged  orally,
but  only  by an  agreement  in  writing,  signed  by  the  party  against  whom
enforcement of any waiver, change, modification or discharge is sought.

         Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceedings  (whether at the trial or appellate  level),  or should this Note be
placed in the hands of any agent or  attorneys  for  collection  upon default or
maturity,  the Maker  agrees to pay, in  addition  to all other  amounts due and
payable hereunder, all reasonable costs and expenses of collection or attempting
to collect this Note, including reasonable attorneys' fees.

         The Maker and any endorsers hereof, for themselves and their respective
representatives,  successors  and  assigns,  expressly  (a)  waive  presentment,
protest, notice of dishonor,  notice of non-payment,  notice of maturity, notice
of  protest,  diligence  in  collection,  and  the  benefit  of  any  applicable
exemptions,  including,  but not limited to, exemptions claimed under insolvency
laws,  and (b)  consent  that the Payee may  release or  surrender,  exchange or
substitute  any property or other  collateral  or security now held or which may
hereafter be held as security  for the payment of this Note,  and/or may release
any guarantor,  and/or may extend the time for payment and/or  otherwise  modify
the terms of payment of any part or the whole of the debt evidenced hereby.

         Any notice,  demand or request  relating to any matter set forth herein
shall be in writing  and shall be deemed  effective  when hand  delivered,  when
mailed,  postage  prepaid,  by  registered  or certified  mail,  return  receipt
requested,  or by a nationally  recognized overnight mail or courier service, to
any party hereto at its address  stated herein or at such other address of which
it shall have notified the party giving such notice in writing as aforesaid.

         The Payee  shall not be  entitled  to assign all or any  portion of its
right, title and interest in and to this Note except to a parent,  subsidiary or
affiliate or in connection with the sale of  substantially  all of the assets of
the  Company,  the  merger,  sale or change of voting  control of the Company or
liquidation  of the  Company.  For purposes of this Note,  the term  "affiliate"
shall have the meaning set forth in Rule 405  promulgated  under the  Securities
Act of 1933, as amended.


<PAGE>


         Notwithstanding  any other  provision of this Note,  all payments  made
hereunder shall be applied first to payment of sums payable hereunder other than
interest and principal,  secondly, interest on the principal balance outstanding
hereunder from time to time, and thirdly to principal.

         This Note shall be governed by, and construed in accordance  with,  the
laws of the State of New York, excluding conflict of law principles thereof.

         The Maker  acknowledges  that he has been  represented  by  counsel  in
connection  with this Note.  Accordingly,  any rule or law or any legal decision
that would require the  interpretation  of any claimed  ambiguities in this Note
against the party that drafted it has no application and is expressly  waived by
the Maker.  The  provisions  of this Note shall be  interpreted  in a reasonable
manner to give effect to the intent of the Maker and the Payee.

Michael Breneisen

Address:  __________________



<PAGE>





                                 ACKNOWLEDGMENT

STATE OF NEW YORK       )
                                    ) ss.:
COUNTY OF SUFFOLK )

                  On _______________ before me personally came Michael Breneisen
to me known,  and known to be the individual  described in, and who executed the
foregoing Note, and duly acknowledged to me that he executed the same.

                                                              Notary Public

<PAGE>

                                    EXHIBIT B

                  PLEDGE  AGREEMENT,  dated  ___________,  ____,  by  and  among
MICHAEL  BRENEISEN  (the  "Pledgor"),   TELEBYTE  TECHNOLOGY,   INC.,  a  Nevada
corporation (the "Pledgee"), and CERTILMAN BALIN ADLER & HYMAN, LLP (the "Pledge
Agent").

                  WHEREAS,  simultaneously  herewith,  the Pledgor is purchasing
from the Pledgee _____________  thousand (___,000) shares of Common Stock of the
Pledgee and, in partial  consideration  therefor, is executing and delivering to
the  Pledgee  a  Promissory  Note  of  even  date  in the  principal  amount  of
____________ Thousand Dollars ($___,000) (the "Note").

                  WHEREAS,  the Pledgee desires,  and the Pledgor is willing, to
secure performance of the Note.

                  WHEREAS,  certain capitalized terms used herein are defined in
Section 10 hereof.

                  NOW, THEREFORE, the parties hereto agree as follows:

         1. PLEDGE.  The Pledgor  hereby grants to the Pledgee,  as security for
the  performance  by the Pledgor of all of his  obligations  under the Note (the
"Obligations"),  a valid and binding first  security  interest in the Collateral
(as hereinafter defined). The Pledgor has delivered  simultaneously  herewith to
the  Pledge  Agent,  as agent  for the  Pledgee,  and the  Pledge  Agent  hereby
acknowledges receipt of, a certificate  evidencing the Pledged Shares registered
in  the  name  of  the  Pledgor  (the  "Pledged  Certificate"),  accompanied  by
appropriate stock powers endorsed in blank by the Pledgor (the "Stock Powers").

         2.       TERM.  This  Agreement  shall  continue in effect until
terminated in accordance  with Section 8 hereof.

         3.       SHARE RIGHTS; CASH DIVIDENDS.
                  ----------------------------

                  (a) In the event of any change in the  Pledged  Shares  during
the term of this  Agreement  by reason of any stock  dividend,  stock  split-up,
reverse  split,  recapitalization,  combination,  reclassification,  exchange of
shares, merger,  consolidation or the like, all new, substituted,  or additional
stock, or other  securities,  issued by reason of any such change (the "Adjusted
Shares") (the Pledged Shares and the Adjusted Shares are hereinafter referred to
collectively as the "Shares") shall be delivered to and held by the Pledge Agent
under the terms of this  Agreement  in the same  manner  as the  Pledged  Shares
originally pledged hereunder.

                  (b) Provided  that no Default has  occurred,  any and all cash
dividends  paid in respect of the Shares shall be paid promptly after receipt to
the  Pledgor;   provided,   however,  that,  in  any  event,  any  extraordinary
distributions  made in respect of the Shares  shall be  delivered  to the Pledge
Agent and held by it in accordance with the terms hereof.

         4.       REPRESENTATIONS.  The Pledgor hereby represents and warrants
to the Pledgee that:



<PAGE>



                                       27



                  (a) The Pledgor is the sole record and beneficial owner of the
Pledged  Shares,  free and  clear of all  liens,  pledges,  security  interests,
encumbrances, restrictions, subscriptions, hypothecations, charges and claims of
any kind whatsoever, other than the lien created hereby.

                  (b) No consents of governmental and other regulatory agencies,
foreign or  domestic,  or of other  parties are required to be received by or on
the part of the Pledgor to enable him to enter into and carry out this Agreement
and the transactions contemplated hereby.

                  (c) The Pledgor has the power to enter into this Agreement and
to carry out his obligations hereunder. This Agreement constitutes the valid and
binding  obligation of the Pledgor,  and is enforceable  in accordance  with its
terms,  except to the extent  that  enforcement  may be limited by or subject to
applicable bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws now or hereafter in effect  affecting  creditors'  rights  generally and by
general  principles of equity  (regardless  of whether  enforcement is sought in
equity or at law).

                  (d) Neither the execution  and delivery of this  Agreement nor
compliance by the Pledgor with any of the provisions hereof nor the consummation
of the transactions contemplated hereby will violate or, alone or with notice or
the  passage  of time,  result  in the  material  breach or  termination  of, or
otherwise  give any  contracting  party the  right to  terminate,  or  declare a
default under, the terms of any agreement, understanding or arrangement to which
the Pledgor is a party or by which he or his assets or properties may be bound.

         5.       COVENANTS.
                  ---------

                  (a) The Pledgor hereby  covenants that from and after the date
hereof and until the Obligations shall have been satisfied in full:

                           (i) The Pledgor  will not grant,  create,  incur,
assume or suffer to exist any lien in the Collateral (except for the lien
created hereby).

                           (ii) The Pledgor will defend the Pledgee's right,
title,  and security  interest in and to the Collateral against the claims of
any person, firm, corporation or other entity.

                           (iii) The  Pledgor  shall at any time and from time
to time,  upon the  written  request of the Pledgee,  execute and deliver such
other instruments and documents and do such further acts and things as the
Pledgee may  reasonably  request in order to effect the purposes of this
Agreement.

                  (b) The  Pledgee's  sole duty  with  respect  to the  custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section  9-207 of the Code or  otherwise,  shall be to deal  with it in the same
manner as the Pledgee  deals with  similar  securities  and property for its own
account.


<PAGE>


         6.       DELIVERY OF SHARES.
                  ------------------

                  (a) In the event  that the  Pledge  Agent  receives  a written
notice from the Pledgee, to the effect that the Pledgor has failed to pay all or
any portion of the  Obligations or there shall have otherwise  occurred an Event
of  Default  (as  defined  in the Note)  ("Default"),  the  Pledge  Agent  shall
thereupon  send a copy of such notice to the Pledgor.  If,  within  fifteen (15)
days from the date the Pledge  Agent sends a copy of such notice to the Pledgor,
the Pledge  Agent does not receive a written  notice from the Pledgor  disputing
the  Pledgee's  notice,  the Pledge  Agent shall,  subject to the  discretionary
rights of the Pledge Agent under Section 9(e) hereof, deliver the Shares and any
monies held  hereunder  (the  "Pledged  Funds") to the Pledgee.  If, within such
fifteen (15) day period,  the Pledge Agent  receives such written notice and, if
applicable,  accompanying  evidence  from the Pledgor  disputing  the  Pledgee's
notice,  the Pledge  Agent may  exercise  any of its rights  under  Section 9(e)
hereof.

                  (b) Upon the Pledge Agent's receipt of written notice from the
Pledgee to the effect that the Pledgor has satisfied the entire Obligation,  the
Pledge Agent shall deliver the Shares,  together with any Pledged Funds,  to the
Pledgor.

                  (c) Upon the Pledge Agent's receipt of written notice from the
Pledgor  to the  effect  that he has  timely  satisfied  the  entire  Obligation
(accompanied by evidence thereof  satisfactory to the Pledge Agent),  the Pledge
Agent shall  thereupon  send a copy of such notice and  evidence to the Pledgee.
If, within fifteen (15) days from the date the Pledge Agent sends a copy of such
notice to the Pledgee,  the Pledge Agent does not receive a written  notice from
the Pledgee disputing the Pledgor's notice,  the Pledge Agent shall,  subject to
the discretionary rights of the Pledge Agent under Section 9(e) hereof,  deliver
the Shares,  together with the Pledged  Funds,  to the Pledgor.  If, within such
fifteen  (15) day period,  the Pledge Agent  receives a written  notice from the
Pledgee disputing the Pledgor's notice, the Pledge Agent may exercise any of its
rights under Section 9(e) hereof.

                  (d) Upon the Pledge Agent's receipt of written notice from the
Pledgor to the effect  that the  Pledgor  desires to sell all or any part of the
Shares,  the Pledge  Agent shall  deliver such Shares as directed by the Pledgor
against  receipt of the net proceeds of the sale of such Shares,  limited to the
amount  obtained  by  multiplying  the  number of Shares  sold by $1.02 plus any
accrued and unpaid  interest  thereon,  and the remaining net proceeds  shall be
paid to the Pledgor.


<PAGE>


         7.  DEFAULT.  (a) In the  event  that the  Pledgor  fails to pay to the
Pledgee any  Obligation  when due,  after any  applicable  notice  and/or  grace
period, or there shall otherwise occur a Default,  the Pledgee shall have all of
the  rights  and  remedies  afforded  to  secured  parties  with  respect to the
Collateral  as set forth in the Code as well as all other  rights  and  remedies
granted in the Note and this Agreement.  Without  limiting the generality of the
foregoing,   the  Pledgee,  without  demand  of  performance  or  other  demand,
presentment,  protest,  advertisement  or notice of any kind  (except any notice
required by law or  referred  to below) to or upon the Pledgor  (all and each of
which demands, defenses,  advertisements and notices (except any notice required
by law or  referred  to below) are  hereby  waived),  may in such  circumstances
forthwith collect, receive,  appropriate and realize upon the Collateral, or any
part thereof,  and/or may forthwith sell,  assign,  give an option or options to
purchase or otherwise  dispose of and deliver the Collateral or any part thereof
(or  contract to do any of the  foregoing),  in one or more parcels at public or
private sale or sales,  upon such terms and  conditions and at such prices as it
may deem  advisable,  for  cash or on  credit  or for  future  delivery  without
assumption  of any credit risk,  provided  that pursuant to Section 9-504 of the
Code, such  disposition,  including the method,  manner,  time, place and terms,
shall be commercially reasonable. The Pledgee shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales,  to purchase the whole or any part of the Collateral so sold. The
Pledgee  shall  apply  any  proceeds  from  time to time  held by it and the net
proceeds of any such sale or other  disposition,  after deducting all reasonable
costs and expenses of every kind  incurred in respect  thereof or  incidental to
the care or  safekeeping  of any of the Collateral or in any way relating to the
Collateral  or  the  rights  of  the  Pledgee  hereunder,   including,   without
limitation,  reasonable  attorneys'  fees and  disbursements  of  counsel to the
Pledgee,  to the  satisfaction in whole or in part of the  Obligations,  in such
order as the  Pledgee  may elect and only after such  application  and after the
payment by the Pledgee of any other  amount  required by any  provision  of law,
including,  without  limitation,  Section  9-504  (1)(c) of the  Code,  need the
Pledgee account for the surplus, if any, to the Pledgor. To the extent permitted
by  applicable  law, the Pledgor  waives all claims,  damages and demands he may
acquire  against  the Pledgee  arising  out of the lawful  exercise by it of any
rights  hereunder.  Neither  the Pledgee  nor any of its  respective  directors,
officers,  employees  or agents shall be liable for failure to sell or otherwise
dispose  of the  Collateral  or for any delay in doing  so.  If any  notice of a
proposed sale or other  disposition of the Collateral  shall be required by law,
such  notice  shall be deemed  reasonable  and proper if given at least ten (10)
days before such sale or other disposition.  In any event,  notice of a proposed
sale or other disposition shall be given at least ten (10) days before such sale
or other  disposition  to the Pledgor.  The Pledgor  shall remain liable for any
deficiency if the proceeds of any sale or other  disposition  of the  Collateral
are  insufficient  to pay all of the  Obligations  and any  and  all  costs  and
expenses of every kind incurred by the Pledgee with respect to the collection of
such  deficiency,   including,  without  limitation,  all  reasonable  fees  and
disbursements of any attorneys employed by the Pledgee.

                  The  Pledgor  recognizes  that the  Pledgee  may be  unable to
effect  a  public  sale  of any or all  the  Collateral  by  reason  of  certain
restrictions contained in the Securities Act of 1933, as amended, and applicable
state  securities  laws or  otherwise,  and may be compelled to resort to one or
more private  sales thereof to a restricted  group of  purchasers  which will be
obliged to agree,  among other things,  to acquire such securities for their own
account  for  investment  and not  with a view  to the  distribution  or  resale
thereof.  The Pledgor  acknowledges  and agrees that any such  private  sale may
result in prices and other terms less  favorable than if such sale were a public
sale and agrees that any such private sale under such circumstances shall not be
evidence that it has been made in other than a commercially reasonable manner.

                  The Pledgor agrees to use commercially  reasonable  efforts to
do or cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Collateral  pursuant to this section valid
and binding and in compliance with any and all other applicable  requirements of
law.


<PAGE>


                  (b)  The  rights  of  the  Pledgee   hereunder  shall  not  be
conditioned or contingent upon the pursuit by the Pledgee of any right or remedy
against the Pledgor,  any other person which may be or become  liable in respect
of all or any  part  of the  Obligations  or  against  any  collateral  security
therefor,  guarantee  therefor or right of offset with respect thereto.  Neither
the Pledgee nor any of its affiliates or representatives shall be liable for any
failure to demand,  collect or realize upon all or any part of the Collateral or
for any delay in doing so, nor shall the Pledgee be under any obligation to sell
or otherwise  dispose of any  Collateral  upon the request of the Pledgor or any
other  person  or to  take  any  other  action  whatsoever  with  regard  to the
Collateral or any part thereof.

         8.       TERMINATION OF AGREEMENT.  Upon the conclusion of the actions
  contemplated  by Section 6 hereof, this Agreement shall thereupon terminate.

         9.       TERMS OF PLEDGE.
                  ---------------

                  (a) The Pledge  Agent shall not be liable for any action taken
or omitted by it, or any action  suffered by it to be taken or omitted,  in good
faith and in the exercise of its own best  judgment,  and may rely  conclusively
and shall be protected in acting upon any order,  notice,  demand,  certificate,
opinion or advice of counsel  (including  counsel  chosen by the Pledge  Agent),
statement, instrument, report or other paper or document (not only as to its due
execution and the validity and  effectiveness of its provisions,  but also as to
the truth and  acceptability  of any  information  therein  contained)  which is
believed by the Pledge  Agent to be genuine and to be signed or presented by the
proper  person or persons.  The Pledge Agent shall not be bound by any notice or
demand,  or any waiver,  modification,  termination or rescission of this Pledge
Agreement unless evidenced by a writing  delivered to the Pledge Agent signed by
the proper party or parties and, if the duties or rights of the Pledge Agent are
affected, unless it shall have given its prior written consent thereto.

                  (b)  The  Pledge  Agent  shall  not  be  responsible  for  the
sufficiency  or accuracy of, the form of, or the execution,  validity,  value or
genuineness  of, any  document or property  received,  held or  delivered  by it
hereunder,  or of any  signature  or  endorsement  thereon,  or for any  lack of
endorsement  thereon, or for any description therein, nor shall the Pledge Agent
be responsible or liable in any respect on account of the identity, authority or
rights of the  persons  executing  or  delivering  or  purporting  to execute or
deliver any document or property paid or delivered to the Pledge Agent  pursuant
to the  provisions  hereof.  The Pledge  Agent  shall not be liable for any loss
which may be incurred by reason of any  investment  of any monies or  properties
which it holds hereunder.

                  (c) The Pledge  Agent  shall have the right to assume,  in the
absence of written  notice to the  contrary  from the proper  person or persons,
that a fact or an event by reason of which an action  would or might be taken by
the Pledge Agent does not exist or has not occurred, without incurring liability
for any action  taken or omitted,  in good faith and in the  exercise of its own
best judgment, in reliance upon such assumption.


<PAGE>


                  (d) The Pledge Agent shall be indemnified and held harmless by
the other parties hereto, jointly and severally,  from and against any expenses,
including  reasonable  counsel fees and  disbursements,  or loss suffered by the
Pledge Agent in connection with any action,  suit or other proceeding,  claim or
demand,  which in any way,  directly or indirectly,  arises out of or relates to
this Pledge Agreement,  the services of the Pledge Agent hereunder,  the Shares,
the Pledged  Funds,  if any, or other  property held by it hereunder or any such
expense or loss.

                  (e)  Promptly  after the receipt by the Pledge Agent of notice
of any demand or claim or the  commencement  of any action,  suit or proceeding,
the Pledge Agent shall,  if such notice shall relate to any other party  hereto,
notify such parties  thereof in writing;  but the failure by the Pledge Agent to
give such notice shall not relieve any party from any liability which such party
may have to the  Pledge  Agent  hereunder.  In the event of the  receipt of such
notice, the Pledge Agent, in its sole discretion,  may commence an action in the
nature  of  interpleader  in an  appropriate  court to  determine  ownership  or
disposition  of the Shares and  Pledged  Funds,  if any,  or it may  deposit the
Shares and Pledged Funds, if any, with the clerk of any appropriate  court or it
may retain the Shares and Pledged  Funds,  if any,  pending  receipt of a final,
non-appealable  order of a court  having  jurisdiction  over all of the  parties
hereto  directing  to whom and under what  circumstances  the Shares and Pledged
Funds,  if any,  are to be  delivered  or it may  deliver the Shares and Pledged
Funds,  if any, to the Pledgee or Pledgor in accordance  with the  provisions of
Section 6 hereof.

                  (f)   Notwithstanding   any  obligation  to  make   deliveries
hereunder,  the  Pledge  Agent  may  retain  and hold for such  time as it deems
necessary  such  property  as it shall from time to time in its sole  discretion
deem  sufficient to indemnify  itself for any loss or expense or for any amounts
due it. For the purposes  hereof,  the term  "expense or loss" shall include all
amounts  paid or payable  to  satisfy  any  claim,  demand or  liability,  or in
settlement of any claim,  demand,  action,  suit or proceeding  settled with the
express  written  consent  of the  Pledge  Agent,  and all costs  and  expenses,
including, but not limited to, reasonable counsel fees and disbursements paid or
incurred in investigating or defending any such claim,  demand,  action, suit or
proceeding.

                  (g) In the  event of a dispute  between  the  Pledgor  and the
Pledgee,  the Pledge  Agent  shall also be entitled  to  reimbursement  from the
parties hereto for all expenses paid or incurred by it in the  administration of
its duties  hereunder  including,  but not limited to, all  reasonable  counsel,
advisors' and agents' fees and disbursements and all taxes or other governmental
charges.

                  (h)  From  time to time on and  after  the  date  hereof,  the
parties  other than the Pledge  Agent shall  deliver or cause to be delivered to
the Pledge Agent such further documents and instruments and shall do or cause to
be done such further acts as the Pledge Agent shall reasonably request (it being
understood  that the  Pledge  Agent  shall have no  obligation  to make any such
request)  to carry out more  effectively  the  provisions  and  purposes of this
Pledge Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.

                  (i) The Pledge Agent may resign at any time and be  discharged
from its duties as the Pledge Agent  hereunder  by its giving the other  parties
hereto at least thirty (30) days prior  notice  thereof in  accordance  with the
terms hereof.  As soon as practicable  after its  resignation,  the Pledge Agent
shall turn over to a  successor  Pledge  Agent  appointed  by the other  parties
hereto,  jointly,  the Shares and Pledged  Funds,  if any, held  hereunder  upon
presentation of the document  appointing the new Pledge Agent and its acceptance
thereof.  If no new  agent is so  appointed  within  the sixty  (60) day  period
following the giving of such notice of resignation, the Pledge Agent may deposit
the Shares and Pledged Funds, if any, with any court it deems appropriate.


<PAGE>


                  (j) The Pledge Agent shall resign and be  discharged  from its
duties as the Pledge  Agent  hereunder if so requested in writing at any time by
the other parties hereto,  jointly;  provided,  however,  that such  resignation
shall become effective only upon acceptance of appointment by a successor Pledge
Agent as provided in Section 9(i) hereof.

                  (k)  Following  resignation  and/or  discharge  of the  Pledge
Agent,  the  provisions  of this  Section  9 shall  nonetheless  continue  to be
applicable with respect to the Pledge Agent.

         10.      DEFINED TERMS.  The following terms shall have the following
meanings:

                (a)     "Code"  means the  Uniform  Commercial  Code from time
 to time in effect in the State of New York.

                (b)      "Collateral" means the Pledged Shares and all Proceeds.
                            ----------

                (c) "Pledged  Shares"  means  ___________  thousand  (___,000)
shares of Common Stock of the Pledgee,  together with any and all shares,  stock
certificates,  options or rights of any nature  whatsoever that may be issued or
granted to the Pledgor  with regard  thereto,  in  substitution  or  replacement
thereof,  as a conversion  thereof, in exchange therefor or otherwise in respect
thereof.

                (d) "Proceeds" means all "proceeds" as such term is defined in
Section  9-306(1)  of the Code on the  date  hereof  and,  in any  event,  shall
include,  without  limitation,  all  dividends  or other income from the Pledged
Shares, collections thereon and distributions with respect thereto.

         11.      MISCELLANEOUS.
                  -------------

                  (a) This  Agreement  shall be binding  upon and shall inure to
the benefit of the parties hereto and their  respective  legal  representatives,
successors and assigns.

                  (b)  This   Agreement   contains  the  entire   agreement  and
understanding  among the parties in respect of the subject  matter  hereof,  and
cannot be modified, changed, discharged or terminated except by an instrument in
writing,  signed by the party  against  whom  enforcement  of any  modification,
change, discharge or termination is sought.

                  (c) A waiver of the  breach of any term or  condition  of this
Agreement  shall not be deemed to constitute a waiver of any other breach of the
same or any other term or condition.

                  (d)  This   Agreement   will  be  construed  and  governed  in
accordance with the laws of the State of New York, excluding choice of law rules
thereof.


<PAGE>


                  (e) All notices,  requests  and demands  given to or made upon
the  respective  parties  hereto shall be deemed to have been  received five (5)
business  days after the date of mailing when mailed by certified  mail,  return
receipt  requested,  postage  prepaid,  or one  business  day  after the date of
delivery  by a  recognized  overnight  delivery  service,  or,  upon  receipt of
confirmation of transmission  when sent by telecopier and upon receipt when hand
delivered,  addressed  to the parties at their  addresses  set forth below or to
such other addresses furnished by notice given in accordance with this 11(e):

                           If to the Pledgor:

                           Mr. Michael Breneisen
                           12 Olympic Place
                           East Northport, New York 11731

                           Telecopier Number:  (___) ___________

                           with a copy to:

                           Morgan, Lewis & Bockius, LLP
                           101 Park Avenue
                           New York, New York 10178-0060
                           Attention:  Samuel S. Friedman, Esq.
                           Telecopier Number:  (212) 309-6273

                           If to the Pledgee:

                           270 Pulaski Road
                           Greenlawn, New York  11740
                           Attention:  Chairman and CEO
                           Telecopier Number:  (631) 423-1884

                           with a copy to:

                           Certilman Balin Adler & Hyman, LLP
                           90 Merrick Avenue
                           East Meadow, New York 11554
                           Attention: Steven Kuperschmid, Esq.
                           Telecopier Number:  (516) 296-7111

                           If to the Pledge Agent, at:

                           Certilman Balin Adler & Hyman, LLP
                           90 Merrick Avenue
                           East Meadow, New York 11554
                           Attention: Steven Kuperschmid, Esq.
                           Telecopier Number:  (516) 296-7111

                  (f)      The Pledgor waives any and all notice of the
                        extension or  modification  of the terms of the Note.



<PAGE>


                  (g) In the event that the Collateral or any portion thereof is
released to the Pledgor and any payments  of, or proceeds of any  security  for,
the Obligations, or any part thereof, are subsequently invalidated,  declared to
be  fraudulent  or  preferential,  set aside  and/or  required to be repaid to a
trustee,  receiver or any other party under any bankruptcy law, state or federal
law,  common law or  equitable  cause,  then the  Pledgor  shall  redeliver  the
Collateral  and Stock  Powers to the  Pledge  Agent to be held  pursuant  to the
provisions  of  this  Agreement  and,  until  so  redelivered,  shall  hold  the
Collateral and Stock Powers as agent of, and in trust for, the Pledgee.

                  (h) If any  provision  hereof is  declared  to be invalid  and
unenforceable,  then,  to  the  fullest  extent  permitted  by  law,  the  other
provisions  hereof  shall remain in full force and effect and shall be liberally
construed  in favor of the Pledgee in order to carry out the  intentions  of the
parties hereto as nearly as may be possible.

                  (i) Each party acknowledges that he or it has been represented
by counsel in connection  with this Agreement.  Accordingly,  any rule or law or
any  legal  decision  that  would  require  the  interpretation  of any  claimed
ambiguities  in  this  Agreement  against  the  party  that  drafted  it  has no
application  and is expressly  waived by the  parties.  The  provisions  of this
Agreement  shall be  interpreted  in a  reasonable  manner to give effect to the
intent of the parties hereto.


<PAGE>




                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the day and year first above written.

                                              Michael Breneisen

                                              TELEBYTE TECHNOLOGY, INC.

                                              By:
                                              Kenneth Schneider
                                              Chairman and CEO

                                              CERTILMAN BALIN ADLER & HYMAN, LLP

                                              By:


<PAGE>

EXHIBIT 10(M)

                            Telebyte Technology, Inc.
                             1999 Stock Option Plan

                  1. Purpose of the Plan.  The Telebyte  Technology,  Inc.  1999
Stock Option Plan (the "Plan") is intended to advance the  interests of Telebyte
Technology,  Inc. (the "Company") by inducing  individuals and eligible entities
(as  hereinafter  provided)  of  outstanding  ability and  potential to join and
remain with,  or provide  consulting  or advisory  services to, the Company,  by
encouraging and enabling eligible employees, non-employee Directors, consultants
and advisors to acquire proprietary  interests in the Company,  and by providing
the participating  employees,  non-employee Directors,  consultants and advisors
with an  additional  incentive  to promote the success of the  Company.  This is
accomplished  by  providing  for the granting of  "Options,"  which term as used
herein includes both "Incentive Stock Options" and "Nonstatutory Stock Options,"
as  later  defined,  to  employees,   non-employee  Directors,  consultants  and
advisors.

                  2. Administration. The Plan shall be administered by the Board
of Directors of the Company (the "Board of  Directors")  or by a committee  (the
"Committee")  consisting  of at least  one (1)  director  chosen by the Board of
Directors.  Except as  herein  specifically  provided,  the  interpretation  and
construction  by the Board of Directors or the Committee of any provision of the
Plan or of any  Option  granted  under it shall be  final  and  conclusive.  The
receipt of Options by  Directors,  or any  members of the  Committee,  shall not
preclude  their vote on any matters in  connection  with the  administration  or
interpretation of the Plan.

<PAGE>



                  3. Shares  Subject to the Plan.  The stock  subject to Options
granted under the Plan shall be shares of the Company's  common stock, par value
$.01 per share (the "Common Stock"),  whether authorized but unissued or held in
the Company's treasury, or shares purchased from stockholders  expressly for use
under the Plan. The maximum number of shares of Common Stock which may be issued
pursuant  to Options  granted  under the Plan shall not exceed in the  aggregate
five  hundred  thousand  (500,000)  shares  plus such number of shares of Common
Stock  issuable  upon the exercise of Reload  Options (as  hereinafter  defined)
granted under the Plan,  subject to adjustment in accordance with the provisions
of Section 14 hereof.  The Company shall at all times while the Plan is in force
reserve such number of shares of Common Stock as will be  sufficient  to satisfy
the requirements of all outstanding Options granted under the Plan. In the event
any Option  granted  under the Plan  shall  expire or  terminate  for any reason
without  having  been  exercised  in full or shall  cease  for any  reason to be
exercisable in whole or in part, the  unpurchased  shares subject  thereto shall
again be available for Options under the Plan.

<PAGE>

                  4. Participation. The class of individual or entity that shall
be  eligible  to receive  Options  under the Plan  shall be (a) with  respect to
Incentive Stock Options described in Section 6 hereof, all employees  (including
officers) of either the Company or any  subsidiary  corporation  of the Company,
and (b) with  respect  to  Nonstatutory  Stock  Options  described  in Section 7
hereof,  all employees  (including  officers) and non-employee  Directors of, or
consultants and advisors to, either the Company or any subsidiary corporation of
the Company;  provided,  however,  that Nonstatutory  Stock Options shall not be
granted to any such  consultants and advisors unless (i) bona fide services have
been or are to be rendered by such  consultant or advisor and (ii) such services
are not in connection  with the offer or sale of securities in a capital raising
transaction.  For purposes of the Plan, for an entity to be an eligible  entity,
it must be included in the  definition of "employee"  for purposes of a Form S-8
Registration  Statement  filed under the Securities Act of 1933, as amended (the
"Act").  The Board of Directors or the Committee,  in its sole  discretion,  but
subject  to the  provisions  of the Plan,  shall  determine  the  employees  and
non-employee  Directors of, and the consultants and advisors to, the Company and
its subsidiary  corporations to whom Options shall be granted, and the number of
shares to be covered  by each  Option,  taking  into  account  the nature of the
employment or services rendered by the individuals or entities being considered,
their annual  compensation,  their  present and potential  contributions  to the
success of the Company,  and such other factors as the Board of Directors or the
Committee may deem relevant.

                  5. Stock Option Agreement.  Each Option granted under the Plan
shall be  authorized  by the Board of Directors or the  Committee,  and shall be
evidenced by a Stock Option Agreement which shall be executed by the Company and
by the  individual  or entity to whom such Option is granted.  The Stock  Option
Agreement  shall  specify  the number of shares of Common  Stock as to which any
Option is granted, the period during which the Option is exercisable, the option
price per share  thereof,  and such other terms and  provisions  as the Board of
Directors or the Committee may deem necessary or appropriate.

                  6.  Incentive  Stock  Options.  The Board of  Directors or the
Committee  may grant  Options  under the Plan,  which are  intended  to meet the
requirements  of Section 422 of the Internal  Revenue  Code of 1986,  as amended
(the "Code"),  and which are subject to the following  terms and  conditions and
any other terms and  conditions as may at any time be required by Section 422 of
the Code (referred to herein as an "Incentive Stock Option"):

                         (a) No  Incentive  Stock Option shall be granted to
 individuals  other than  employees of the Company or of a
subsidiary corporation of the Company.
                         (b) Each Incentive  Stock Option under the Plan must be
granted prior to April 16, 2009, which is within ten

(10) years from the date the Plan was adopted by the Board of Directors of the
Company.


<PAGE>

                         (c) The option  price of the shares  subject to any
Incentive  Stock  Option  shall not be less than the fair
market  value of the Common  Stock at the time such  Incentive  Stock  Option is
granted;  provided,  however,  if an  Incentive  Stock  Option is  granted to an
individual  who owns,  at the time the Incentive  Stock Option is granted,  more
than ten  percent  (10%) of the total  combined  voting  power of all classes of
stock of the Company or of a parent or subsidiary  corporation of the Company (a
"Principal  Stockholder"),  the  option  price  of  the  shares  subject  to the
Incentive  Stock Option shall be at least one hundred ten percent  (110%) of the
fair market value of the Common Stock at the time the Incentive  Stock Option is
granted.

                         (d) No Incentive  Stock Option  granted under the Plan
shall be  exercisable  after the expiration of ten (10)
years from the date of its  grant.  However,  if an  Incentive  Stock  Option is
granted to a Principal  Stockholder,  such  Incentive  Stock Option shall not be
exercisable  after the  expiration of five (5) years from the date of its grant.
Every  Incentive Stock Option granted under the Plan shall be subject to earlier
termination as expressly provided in Section 12 hereof.

                         (e) For  purposes of  determining  stock  ownership
under this Section 6, the attribution  rules of Section 424(d) of the Code shall
apply.

<PAGE>

                         (f) For purposes of the Plan, fair market value shall
 be the closing  selling price or, if not available,  the
closing bid price or, if not  available,  the high bid price of the Common Stock
quoted on the NASD OTC Electronic  Bulletin Board (the "Bulletin  Board") on the
day immediately preceding the day on which the Option is granted (or, if granted
after the close of trading,  on the day on which the Option is granted),  or, if
there is no selling or bid price on that day, the closing selling price, closing
bid price or high bid price on the most recent day which  precedes  that day and
for which such prices are available. If there is no selling or bid price for the
thirty (30) day period preceding the date of grant of an Option hereunder,  fair
market value shall be  determined in good faith by the Board of Directors or the
Committee.

                  7. Nonstatutory  Stock Options.  The Board of Directors or the
Committee  may grant  Options  under the Plan which are not intended to meet the
requirements  of Section 422 of the Code,  as well as Options which are intended
to meet the  requirements  of  Section  422 of the  Code but the  terms of which
provide that they will not be treated as Incentive  Stock  Options  (referred to
herein as a "Nonstatutory  Stock Option").  Nonstatutory  Stock Options shall be
subject to the following terms and conditions:

                        (a) A  Nonstatutory  Stock  Option may be granted to any
individual  or entity  eligible to receive an Option
under the Plan pursuant to Section 4(b) hereof.
                         (b) The option price of the shares  subject to a
Nonstatutory  Stock Option shall be  determined by the Board of Directors or the
Committee, in its sole discretion, at the time of the grant of the Nonstatutory
Stock Option.
                         (c) A  Nonstatutory  Stock Option granted under the
Plan may be of such duration as shall be determined by the Board of Directors or
the Committee (subject to earlier termination as expressly provided in Section
12 hereof).

<PAGE>

                  8. Reload Feature. The Board of Directors or the Committee may
grant Options with a reload feature.  A reload feature shall only apply when the
option  price is paid by  delivery  of Common  Stock  (as set  forth in  Section
13(b)(ii)).  The Stock Option  Agreement for the Options  containing  the reload
feature shall provide that the Option  holder shall  receive,  contemporaneously
with the payment of the option price in shares of Common  Stock,  a reload stock
option (the "Reload  Option") to purchase  that number of shares of Common Stock
equal to the sum of (i) the number of shares of Common  Stock  used to  exercise
the Option, and (ii) with respect to Nonstatutory  Stock Options,  the number of
shares of Common Stock used to satisfy any tax withholding  requirement incident
to the  exercise  of such  Nonstatutory  Stock  Option.  The  terms  of the Plan
applicable  to the Option shall be equally  applicable to the Reload Option with
the  following  exceptions:  (i) the  option  price per  share of  Common  Stock
deliverable upon the exercise of the Reload Option,  (A) in the case of a Reload
Option  which  is  an  Incentive  Stock  Option  being  granted  to a  Principal
Stockholder, shall be one hundred ten percent (110%) of the fair market value of
a share of Common Stock on the date of grant of the Reload Option and (B) in the
case of a Reload  Option which is an Incentive  Stock Option being granted to an
individual  or entity other than a Principal  Stockholder  or is a  Nonstatutory
Stock  Option,  shall be the fair market value of a share of Common Stock on the
date of grant of the Reload Option; and (ii) the term of the Reload Option shall
be equal to the remaining option term of the Option  (including a Reload Option)
which gave rise to the Reload Option. The Reload Option shall be evidenced by an
appropriate  amendment to the Stock Option  Agreement  for the Option which gave
rise to the  Reload  Option.  In the  event  the  exercise  price  of an  Option
containing a reload  feature is paid by check and not in shares of Common Stock,
the reload feature shall have no application with respect to such exercise.

                  9.     Rights of Option  Holders.  The holder of any Option
granted under the Plan shall have none of the rights of a
                         -------------------------
stockholder  with  respect to the stock  covered by his Option  until such stock
shall be transferred to him upon the exercise of his Option.

                  10.    Alternate Stock Appreciation Rights.
                         -----------------------------------


<PAGE>

                         (a)  Concurrently  with,  or  subsequent to, the award
of any Option to purchase one or more shares of Common Stock,  the Board of
Directors  or the  Committee  may, in its sole  discretion, subject to the
 provisions of the Plan and such other terms and conditions as the
Board of Directors or the  Committee may  prescribe,  award to the optionee with
respect to each share of Common Stock covered by an Option ("Related Option"), a
related alternate stock appreciation  right ("SAR"),  permitting the optionee to
be paid the appreciation on the Related Option in lieu of exercising the Related
Option. An SAR granted with respect to an Incentive Stock Option must be granted
together with the Related Option.  An SAR granted with respect to a Nonstatutory
Stock Option may be granted  together  with, or subsequent to, the grant of such
Related Option.

                         (b) Each SAR granted  under the Plan shall be
authorizedby the Board of  Directors  or the  Committee,  and shall be
evidenced by an SAR  Agreement  which shall be executed by the Company and by
the  individual or entity to whom such SAR is granted.  The SAR Agreement
shall  specify the period  during which the SAR is  exercisable,  and such other
terms and provisions not inconsistent with the Plan.

                         (c) An SAR may be exercised  only if and to the extent
that its Related  Option is eligible to be exercised on
the date of  exercise  of the SAR.  To the extent  that a holder of an SAR has a
current  right  to  exercise,  the SAR  may be  exercised  from  time to time by
delivery  by  the  holder  thereof  to  the  Company  at  its  principal  office
(attention:  Secretary) of a written notice of the number of shares with respect
to  which  it is being  exercised.  Such  notice  shall  be  accompanied  by the
agreements evidencing the SAR and the Related Option. In the event the SAR shall
not be exercised in full, the Secretary of the Company shall endorse or cause to
be endorsed on the SAR Agreement and the Related Option  Agreement the number of
shares which have been exercised thereunder and the number of shares that remain
exercisable under the SAR and the Related Option and return such SAR and Related
Option to the holder thereof.

<PAGE>

                         (d) An optionee  may  exercise  an SAR only when the
market  price on the  exercise  date of a share of Common
Stock subject to the Related  Option exceeds the exercise price per share of the
Related  Option (the "SAR  Spread").  The amount of payment to which an optionee
shall be  entitled  upon the  exercise of each SAR shall be equal to one hundred
percent  (100%) of the SAR Spread;  provided,  however,  the Company may, in its
sole  discretion,  withhold  from any such cash payment any amount  necessary to
satisfy the  Company's  obligation  for  withholding  taxes with respect to such
payment.

                         (e) The amount  payable by the Company to an optionee
upon  exercise of a SAR may, in the sole  determination
of the  Company,  be paid in  shares  of  Common  Stock,  cash or a  combination
thereof, as set forth in the SAR Agreement.  In the case of a payment in shares,
the  number  of  shares  of  Common  Stock to be paid to an  optionee  upon such
optionee's  exercise of an SAR shall be  determined  by  dividing  the amount of
payment determined  pursuant to Section 10(d) hereof by the fair market value of
a share of Common  Stock on the  exercise  date of such SAR. For purposes of the
Plan, the exercise date of an SAR shall be the date the Company receives written
notification from the optionee of the exercise of the SAR in accordance with the
provisions of Section 10(c) hereof. As soon as practicable  after exercise,  the
Company  shall  either  deliver  to the  optionee  the  amount  of cash due such
optionee or a certificate or certificates  for such shares of Common Stock.  All
such shares shall be issued with the rights and restrictions specified herein.

                         (f) SARs shall  terminate or expire upon the same
onditions  and in the same manner as the Related  Options, and as set forth in
Section 12 hereof.
                         (g) The  exercise  of any SAR shall  cancel and
terminate  the right to  purchase  an equal  number of shares covered by the
Related Option.


<PAGE>

                         (h) Upon the exercise or termination of any Related
Option,  the SAR with respect to such Related Option shall terminate to the
extent of the number of shares of Common Stock as to which the Related Option
was exercised or terminated.
                         (i) No SAR  granted  pursuant to the Plan shall be
transferable  by the  individual  or entity to whom it was granted  otherwise
than by will or the laws of descent and  distribution,  and, during the lifetime
of an  individual,  shall not be  exercisable  by any other person, but only
by him.

                  11. Transferability. No Option granted under the Plan shall be
transferable  by the individual or entity to whom it was granted  otherwise than
by will or the laws of descent and distribution,  and, during the lifetime of an
individual, shall not be exercisable by any other person, but only by him.

                  12.    Termination of Employment or Death.
                         ----------------------------------


<PAGE>

                         (a) Subject to the terms of the Stock Option
Agreement,  if the employment of an employee by, or the services
of a  non-employee  Director  for, or consultant or advisor to, the Company or a
subsidiary  corporation  of  the  Company  shall  be  terminated  for  cause  or
voluntarily by the employee,  non-employee Director, consultant or advisor, then
his or its  Option  shall  expire  forthwith.  Subject to the terms of the Stock
Option  Agreement,  and except as  provided in  subsections  (b) and (c) of this
Section 12, if such employment or services shall terminate for any other reason,
then such Option may be exercised at any time within three (3) months after such
termination, subject to the provisions of subsection (d) of this Section 12. For
purposes of the Plan,  the  retirement  of an  individual  either  pursuant to a
pension or  retirement  plan adopted by the Company or at the normal  retirement
date  prescribed  from  time  to time  by the  Company  shall  be  deemed  to be
termination of such individual's employment other than voluntarily or for cause.
For  purposes  of this  subsection  (a),  an  employee,  non-employee  Director,
consultant or advisor who leaves the employ or services of the Company to become
an  employee  or  non-employee  Director  of, or a  consultant  or advisor to, a
subsidiary  corporation of the Company or a corporation (or subsidiary or parent
corporation of the corporation) which has assumed the Option of the Company as a
result of a corporate  reorganization,  etc.,  shall not be  considered  to have
terminated his employment or services.

                         (b) Subject to the terms of the Stock  Option
Agreement,  if the holder of an Option  under the Plan dies (i)
while  employed  by,  or  while  serving  as a  non-employee  Director  for or a
consultant  or  advisor  to,  the  Company or a  subsidiary  corporation  of the
Company, or (ii) within three (3) months after the termination of his employment
or services  other than  voluntarily by the employee or  non-employee  Director,
consultant  or  advisor,  or for cause,  then such  Option  may,  subject to the
provisions of  subsection  (d) of this Section 12, be exercised by the estate of
the employee or non-employee Director, consultant or advisor, or by a person who
acquired  the right to  exercise  such  Option by bequest or  inheritance  or by
reason of the death of such  employee or  non-employee  Director,  consultant or
advisor at any time within one (1) year after such death.

<PAGE>

                         (c)  Subject to the terms of the Stock  Option
Agreement,  if the holder of an Option  under the Plan  ceases
employment  or services  because of permanent and total  disability  (within the
meaning of Section  22(e)(3) of the Code) while employed by, or while serving as
a  non-employee  Director  for or  consultant  or advisor  to, the  Company or a
subsidiary  corporation  of the  Company,  then such Option may,  subject to the
provisions of subsection (d) of this Section 12, be exercised at any time within
one (1) year after his termination of employment, termination of Directorship or
termination of consulting or advisory  services,  as the case may be, due to the
disability.

                         (d) An Option may not be  exercised  pursuant  to this
Section  12 except to the  extent  that the holder was
entitled  to  exercise  the  Option at the time of  termination  of  employment,
termination of Directorship,  termination of consulting or advisory services, or
death, and in any event may not be exercised after the expiration of the Option.

                         (e) For  purposes  of this  Section  12, the
employment  relationship  of an  employee of the Company or of a
subsidiary corporation of the Company will be treated as continuing intact while
he is on  military  or sick leave or other  bona fide leave of absence  (such as
temporary  employment  by the  Government)  if such leave does not exceed ninety
(90) days,  or, if longer,  so long as his right to  reemployment  is guaranteed
either by statute or by contract.

                  13.    Exercise of Options.
                         -------------------


<PAGE>

                         (a) Unless  otherwise  provided in the Stock  Option
 Agreement,  any Option  granted  under the Plan shall be
exercisable  in whole  at any  time,  or in part  from  time to  time,  prior to
expiration. The Board of Directors or the Committee, in its absolute discretion,
may  provide in any Stock  Option  Agreement  that the  exercise  of any Options
granted  under the Plan shall be subject (i) to such  condition or conditions as
it may  impose,  including,  but not  limited  to, a  condition  that the holder
thereof remain in the employ or service of, or continue to provide consulting or
advisory services to, the Company or a subsidiary corporation of the Company for
such  period  or  periods  from the date of grant of the  Option as the Board of
Directors or the Committee,  in its absolute  discretion,  shall determine;  and
(ii) to such  limitations  as it may  impose,  including,  but not limited to, a
limitation that the aggregate fair market value of the Common Stock with respect
to which  Incentive  Stock  Options  are  exercisable  for the first time by any
employee during any calendar year (under all plans of the Company and its parent
and  subsidiary  corporations)  shall not exceed one  hundred  thousand  dollars
($100,000). For purposes of the preceding sentence, the fair market value of any
stock shall be  determined  as of the date the option with respect to such stock
is granted. In addition,  in the event that under any Stock Option Agreement the
aggregate fair market value of the Common Stock with respect to which  Incentive
Stock  Options are  exercisable  for the first time by any  employee  during any
calendar  year  (under all plans of the  Company  and its parent and  subsidiary
corporations)  exceeds one hundred  thousand  dollars  ($100,000),  the Board of
Directors or the  Committee  may, when shares are  transferred  upon exercise of
such Options,  designate those shares which shall be treated as transferred upon
exercise of an Incentive Stock Option and those shares which shall be treated as
transferred upon exercise of a Nonstatutory Stock Option.

                         (b) An Option  granted under the Plan shall be
 exercised by the delivery by the holder  thereof to the Company
at its principal  office  (attention of the  Secretary) of written notice of the
number of shares  with  respect  to which the  Option is being  exercised.  Such
notice  shall be  accompanied,  or  followed  within  ten (10) days of  delivery
thereof, by payment of the full option price of such shares, and payment of such
option price shall be made by the holder's  delivery of (i) his check payable to
the order of the Company; (ii) previously acquired Common Stock, the fair market
value of which shall be determined as of the date of exercise; (iii) if provided
in the Stock Option  Agreement at the  discretion of the Board or  Committee,  a
promissory  note made payable to the Company  accompanied by cash payment of the
par value of the Common Stock being purchased;  or (iv) by the holder's delivery
of any  combination  of the  foregoing  (i),  (ii) and if  provided in the Stock
Option Agreement at the discretion of the Board or Committee, (iii).

<PAGE>

                  14.    Adjustment Upon Change in Capitalization.
                         ----------------------------------------
                         (a) In the event that the outstanding Common Stock is
 hereafter changed by reason of  reorganization,  merger,
consolidation,  recapitalization,  reclassification, stock split-up, combination
of shares,  reverse split, stock dividend or the like, an appropriate adjustment
shall be made by the Board of Directors or the Committee in the aggregate number
of shares  available under the Plan and in the number of shares and option price
per share subject to outstanding  Options.  If the Company shall be reorganized,
consolidated,  or merged with another corporation, the holder of an Option shall
be entitled to receive  upon the exercise of his Option the same number and kind
of shares of stock or the same  amount of  property,  cash or  securities  as he
would have been  entitled to receive upon the  happening  of any such  corporate
event as if he had been,  immediately  prior to such  event,  the  holder of the
number of shares covered by his Option;  provided,  however,  that in such event
the Board of Directors or the Committee  shall have the  discretionary  power to
take any action  necessary or appropriate to prevent any Incentive  Stock Option
granted hereunder which is intended to be an "incentive stock option" from being
disqualified  as such under the then existing  provisions of the Code or any law
amendatory thereof or supplemental thereto.

                         (b) Any  adjustment in the number of shares shall apply
 proportionately  to only the  unexercised  portion of
the Option granted hereunder. If fractions of a share would result from any such
adjustment,  the  adjustment  shall be revised to the next lower whole number of
shares.

                  15.    Further Conditions of Exercise.
                         ------------------------------


<PAGE>

                         (a) Unless prior to the exercise of the Option the
 shares  issuable upon such  exercise  have been  registered
with the Securities and Exchange  Commission  pursuant to the Act, the notice of
exercise shall be accompanied by a representation  or agreement of the person or
estate  exercising  the Option to the Company to the effect that such shares are
being acquired for investment  purposes and not with a view to the  distribution
thereof, or such other  documentation as may be required by the Company,  unless
in the  opinion of counsel to the  Company  such  representation,  agreement  or
documentation is not necessary to comply with the Act.

                         (b) The  Company  shall  not be  obligated  to deliver
  any  Common  Stock  until it has been  listed on each
securities exchange or stock market on which the Common Stock may then be listed
or until there has been  qualification  under or compliance with such federal or
state laws, rules or regulations as the Company may deem applicable. The Company
shall  use  reasonable  efforts  to  obtain  such  listing,   qualification  and
compliance.

                  16.  Effectiveness  of the Plan.  The Plan was  adopted by the
Board of Directors  on April 16, 1999.  The Plan shall be subject to approval on
or before April 16,  2000,  which is within one (1) year of adoption of the Plan
by the Board of  Directors,  by a  majority  of the votes  cast at a meeting  of
stockholders  of the Company by the holders of shares  entitled to vote  thereon
(or,  in the  case  of  action  by  written  consent  in lieu  of a  meeting  of
stockholders, the number of votes required by applicable law to act in lieu of a
meeting)  ("Stockholder  Approval").  In the event such Stockholder  Approval is
withheld or otherwise  not received on or before the latter date,  the Plan and,
subject to the terms of the Stock  Option  Agreement,  all Options that may have
been granted hereunder shall become null and void.

                  17.    Termination, Modification and Amendment.
                         ---------------------------------------


<PAGE>

                         (a) The  Plan  (but  not  Options  or  SARs  previously
granted under the Plan) shall terminate on April 16, 2009,

which is within  ten (10) years  from the date of its  adoption  by the Board of
Directors of the Company, or sooner as hereinafter provided, and no Option shall
be granted after termination of the Plan.

                         (b) The Plan may from  time to time be  terminated,
modified,  or  amended  if  Stockholder  Approval  of the
termination, modification or amendment is obtained.
                         (c) In addition,  the Board of Directors  may at any
time,  on or before the  termination  date referred to in
Section  17(a)  hereof,  terminate  the  Plan,  or from  time to time  make such
modifications  or  amendments  to the Plan as it may deem  advisable;  provided,
however,  that the Board of Directors shall not, without  Stockholder  Approval,
increase (except as otherwise  provided by Section 14 hereof) the maximum number
of shares as to which Options may be granted  hereunder,  change the designation
of individuals or entities  eligible to receive  Options,  make any other change
which would  prevent any  Incentive  Stock  Option  granted  hereunder  which is
intended to be an  "incentive  stock  option" from  qualifying as such under the
then  existing  provisions  of  the  Code  or  any  law  amendatory  thereof  or
supplemental  thereto, or adopt any modification or amendment which, pursuant to
the applicable law, requires Stockholder Approval.

                         (d) No  termination,  modification,  or amendment of
the Plan may,  without the consent of the  individual  or
entity to whom any Option shall have been granted,  adversely  affect the rights
conferred by such Option.

                  18. Not a Contract of  Employment.  Nothing  contained  in the
Plan or in any Stock Option Agreement  executed  pursuant hereto shall be deemed
to confer upon any  individual  or entity to whom an Option is or may be granted
hereunder  any right to remain in the  employ or  service  of the  Company  or a
subsidiary  corporation of the Company or any entitlement to any remuneration or
other benefit pursuant to any consulting or advisory arrangement.

<PAGE>

                  19.    Use of  Proceeds.  The  proceeds  from the sale of
shares  pursuant  to Options  granted  under the Plan shall
                         ----------------
constitute general funds of the Company.
                  20.  Indemnification  of Board of Directors or  Committee.  In
addition to such other rights of  indemnification  as they may have, the members
of the  Board of  Directors  or the  Committee,  as the  case  may be,  shall be
indemnified by the Company to the extent  permitted under applicable law against
all  costs and  expenses  reasonably  incurred  by them in  connection  with any
action,  suit,  or  proceeding  to  which  they or any of them may be a party by
reason of any action  taken or failure  to act under or in  connection  with the
Plan or any rights  granted  thereunder  and against all amounts paid by them in
settlement  thereof or paid by them in  satisfaction  of a judgment  of any such
action, suit or proceeding, except a judgment based upon a finding of bad faith.
Upon the  institution  of any such action,  suit, or  proceeding,  the member or
members of the Board of  Directors or the  Committee,  as the case may be, shall
notify the Company in writing, giving the Company an opportunity at its own cost
to defend the same before such member or members undertake to defend the same on
his or their own behalf.

                  21.    Captions.  The use of  captions  in the Plan is for
convenience.  The  captions  are not  intended to provide
                         --------
substantive rights.


<PAGE>

                  22. Disqualifying Dispositions.  If Common Stock acquired upon
exercise of an  Incentive  Stock  Option  granted  under the Plan is disposed of
within two years  following the date of grant of the  Incentive  Stock Option or
one year  following  the  issuance of the Common  Stock to the  Optionee,  or is
otherwise disposed of in a manner that results in the optionee being required to
recognize  ordinary  income,  rather than capital gain,  from the disposition (a
"Disqualifying Disposition"),  the holder of the Common Stock shall, immediately
prior to such  Disqualifying  Disposition,  notify the Company in writing of the
date  and  terms  of such  Disqualifying  Disposition  and  provide  such  other
information   regarding  the  Disqualifying   Disposition  as  the  Company  may
reasonably require.

                  23.  Withholding  Taxes.  Whenever  under  the Plan  shares of
Common Stock are to be delivered by an optionee upon exercise of a  Nonstatutory
Stock  Option,  the  Company  shall be  entitled  to require as a  condition  of
delivery that the optionee remit or, in appropriate  cases,  agree to remit when
due, an amount  sufficient to satisfy all current or estimated  future  Federal,
state  and  local  income  tax  withholding  requirements,   including,  without
limitation,  the employee's portion of any employment tax requirements  relating
thereto. At the time of a Disqualifying Disposition, the optionee shall remit to
the Company in cash the amount of any applicable Federal, state and local income
tax withholding and the employee's portion of any employment taxes.

                  24. Other  Provisions.  Each Option granted under the Plan may
contain such other terms and conditions not inconsistent with the Plan as may be
determined   by  the   Board  or  the   Committee,   in  its  sole   discretion.
Notwithstanding  the foregoing,  each  Incentive  Stock Option granted under the
Plan shall include those terms and conditions which are necessary to qualify the
Incentive  Stock Option as an  "incentive  stock  option"  within the meaning of
Section 422 of the Code and the regulations thereunder and shall not include any
terms and conditions which are inconsistent therewith.

                  25.    Definitions.  For purposes of the Plan, the terms
"parent  corporation"  and  "subsidiary  corporation"  shall
                         -----------
have  the  meanings  set  forth in  Sections  424(e)  and  424(f)  of the  Code,
respectively, and the masculine shall include the feminine and the neuter as the
context requires.

<PAGE>

                  26.    Governing  Law. The Plan shall be governed by, and all
  questions  arising  hereunder  shall be  determined in
                         --------------
accordance with, the laws of the State of New York.

<PAGE>

EXHIBIT 10(N)


      WCMA(R)REDUCING REVOLVERsm LOAN AND SECURITY AGREEMENT
================================================================================
WCMA  REDUCING  REVOLVERsm  Loan and Security  Agreement  NO.  839-07K51

("Loan
Agreement")  dated as of January 7, 1999,  between  TELEBYTE  TECHNOLOGY INC., a
corporation  organized and existing under the laws of the State of Nevada having
its principal office at 270 Pulaski Road, Greenlawn, NY 11740 ("Customer"),  and
MERRILL LYNCH  BUSINESS  FINANCIAL  SERVICES  INC., a corporation  organized and
existing under the laws of the State of Delaware having its principal  office at
33 West Monroe Street, Chicago, IL 60603 ("MLBFS").

In accordance with that certain Working Capital  Management(R) Account Agreement
No. 839-07K51 ("WCMA Agreement") between Customer and MLBFS' affiliate,  Merrill
Lynch, Pierce, Fenner & Smith Incorporated  ("MLPF&S"),  Customer has subscribed
to the WCMA Program  described in the WCMA  Agreement.  The WCMA Agreement is by
this reference incorporated as a part hereof. In conjunction therewith, Customer
has  requested  that  MLBFS  make a WCMA  Reducing  Revolver  Loan (a  "Reducing
Revolver")  to  Customer in the amount and upon the terms  hereafter  specified,
and, subject to the terms and conditions  hereafter set forth,  MLBFS has agreed
to provide a Reducing Revolver for Customer.

A Reducing  Revolver is a term credit facility,  similar to a conventional  term
loan,  but funded out of a line of credit under the WCMA Program  ("WCMA Line of
Credit")  in the  amount of the  initial  loan.  With a Reducing  Revolver:  (i)
interest will generally be charged each month to Customer's  WCMA account,  and,
so long as the WCMA Line of Credit is in effect,  paid with an  additional  loan
under  the WCMA  Line of  Credit  (i.e.,  added to the loan  balance),  (ii) the
maximum  WCMA Line of Credit will be reduced each month by the amount that would
be payable on account of principal if the Reducing  Revolver were a conventional
term loan  amortized  over the same term and in the same manner as the  Reducing
Revolver,  and (iii)  Customer will be required to make  sufficient  payments on
account of the Reducing  Revolver to assure that the outstanding  balance of the
Reducing  Revolver  does not at any time exceed the Maximum WCMA Line of Credit,
as reduced each month.

Absent a prepayment  by Customer,  this  structure  results in required  monthly
payments  for the  Reducing  Revolver  that  are  substantially  the same as the
required  monthly  payments for a conventional  term loan with the same term and
amortization. However, unlike most conventional term loans, because it is funded
out of a line of credit,  the Reducing  Revolver  permits  both a prepayment  in
whole  or in  part  at  any  time,  and,  subject  to  certain  conditions,  the
re-borrowing  on a revolving basis of any such prepaid amounts up to the Maximum
WCMA Line of Credit, as reduced each month. The structure  therefore will enable
Customer at its option to use any excess or temporary  cash balances that it may
have from time to time to prepay the Reducing  Revolver and thereby  effectively
reduce interest expense on the Reducing  Revolver without  impairing its working
capital.

Accordingly, and in consideration of the premises and of the mutual covenants of
the parties hereto, Customer and MLBFS hereby agree as follows:

                             Article I. DEFINITIONS

1.1 Specific Terms. In addition to terms defined  elsewhere in this Loan
Agreement,  when used herein the following terms shall have the following
 meanings:

a        "Account  Debtor"  shall  mean any party who is or may  become
obligated  with  respect  to an Account or Chattel Paper.

b "Additional Agreements" shall mean all agreements,  instruments, documents and
opinions  other than this Loan  Agreement,  whether with or from Customer or any
other party, which are contemplated  hereby or otherwise  reasonably required by
MLBFS in  connection  herewith,  or which  evidence  the  creation,  guaranty or
collateralization  of any of the  Obligations  or the granting or  perfection of
liens or security  interests upon the Collateral or any other collateral for the
Obligations.

c "Bankruptcy Event" shall mean any of the following: (i) a proceeding under any
bankruptcy,  reorganization,  arrangement,  insolvency,  readjustment of debt or
receivership law or statute shall be filed or consented to by Customer;  or (ii)
any such proceeding  shall be filed against  Customer and shall not be dismissed
or withdrawn within sixty (60) days after filing; or (iii) Customer shall make a
general  assignment  for  the  benefit  of  creditors;  or (iv)  Customer  shall
generally fail to pay or admit in writing its inability to pay its debts as they
become due; or (v) Customer shall be adjudicated a bankrupt or insolvent.

d  "Business  Day"  shall mean any day other than a  Saturday,  Sunday,  federal
holiday or other day on which the New York Stock Exchange is regularly closed.

e "Closing  Date"  shall mean the date upon which all  conditions  precedent  to
MLBFS'  obligation to make the Loan shall have been met to the  satisfaction  of
MLBFS.

f  "Collateral"  shall  mean  all  Accounts,  Chattel  Paper,  Contract  Rights,
Inventory,   Equipment,   Fixtures,   General  Intangibles,   Deposit  Accounts,
Documents,  Instruments,  Investment  Property and Financial Assets of Customer,
howsoever  arising,  whether  now owned or  existing  or  hereafter  acquired or
arising, and wherever located;  together with all parts thereof (including spare
parts), all accessories and accessions thereto, all books and records (including
computer  records)  directly related thereto,  all proceeds thereof  (including,
without  limitation,  proceeds in the form of Accounts and insurance  proceeds),
and the additional collateral described in Section 4.6 (b) hereof.

g        "Commitment Expiration Date" shall mean February 6, 1999.

h        "Commitment Fee" shall mean a fee of $10,000.00 due to MLBFS in
connection with this Loan Agreement.

i  "Default"  shall mean  either an "Event of Default" as defined in Section 4.5
hereof,  or an event which with the giving of notice,  passage of time, or both,
would constitute such an Event of Default.

j  "General  Funding  Conditions"  shall mean each of the  following  conditions
precedent to the  obligation  of MLBFS to make the Loan or any  Subsequent  WCMA
Loan hereunder:  (i) Customer shall have validly  subscribed to and continued to
maintain  the WCMA  Account  with  MLPF&S,  and the WCMA  Account  shall then be
reflected as an active  "Commercial" WCMA Account (i.e., one with line of credit
capabilities)  on MLPF&S'  WCMA  computer  system;  (ii) no  Default  shall have
occurred and be  continuing  or would result from the making of the Loan or such
Subsequent  WCMA Loan by MLBFS;  (iii)  there  shall  not have  occurred  and be
continuing any material adverse change in the business or financial condition of
Customer;  (iv) all  representations and warranties of Customer herein or in any
Additional  Agreements shall then be true and correct in all material  respects;
(v) MLBFS shall have received this Loan Agreement and all Additional Agreements,
duly executed and filed or recorded where  applicable,  all of which shall be in
form and substance  reasonably  satisfactory  to MLBFS;  (vi) the Commitment Fee
shall have been paid in full;  (vii)  MLBFS shall have  received,  as and to the
extent applicable, copies of invoices, bills of sale, loan payoff letters and/or
other evidence reasonably  satisfactory to it that the proceeds of the Loan will
satisfy the Loan Purpose;  (viii) MLBFS shall have received evidence  reasonably
satisfactory  to it as to the ownership of the Collateral and the perfection and
priority  of  MLBFS'  liens  and  security  interests  thereon,  as  well as the
ownership  of and the  perfection  and  priority  of MLBFS'  liens and  security
interests on any other collateral for the Obligations  furnished pursuant to any
of the Additional Agreements; (ix) MLBFS shall have received evidence reasonably
satisfactory to it of the insurance  required hereby or by any of the Additional
Agreements;  and (x) any additional  conditions  specified in the "WCMA Reducing
Revolver  Loan  Approval"   letter   executed  by  MLBFS  with  respect  to  the
transactions   contemplated  hereby  shall  have  been  met  to  the  reasonable
satisfaction of MLBFS.

k "Interest Due Date" shall mean the last  Business Day of each  calendar  month
during the term hereof (or, if Customer makes special  arrangements with MLPF&S,
on the last Friday of each calendar month during the term hereof).

l "Interest  Rate" shall mean a variable  per annum rate equal to the sum of (i)
2.90% per annum,  and (ii) the interest rate from time to time  published in the
"Money Rates" section of The Wall Street Journal for 30-day high-grade unsecured
notes sold through dealers by major  corporations (the "30-Day  Commercial Paper
Rate").  The Interest Rate will change as of the date of publication in The Wall
Street  Journal of a 30-Day  Commercial  Paper Rate that is different  from that
published  on the  preceding  Business  Day.  In the event that The Wall  Street
Journal shall,  for any reason,  fail or cease to publish the 30-Day  Commercial
Paper Rate, MLBFS will choose a reasonably  comparable index or source to use as
the basis for the Interest Rate.

m "Loan" shall mean the specific Reducing Revolver by MLBFS to Customer pursuant
to this Agreement for the Loan Purpose and in the Loan Amount.

n "Loan  Amount"  shall  mean an amount  equal to the lesser of: (i) 100% of the
amount  required by Customer  to satisfy or fulfill the Loan  Purpose,  (ii) the
aggregate amount which Customer shall request be advanced by MLBFS on account of
the Loan Purpose on the Closing Date, or (iii) $1,000,000.00.

o "Loan  Purpose" shall mean the purpose for which the proceeds of the Loan will
be used;  to wit: to finance a loan by  Customer  to acquire  shares of stock of
Customer from Joel Kramer.

p "Location of Tangible Collateral" shall mean the address of Customer set forth
at the  beginning of this Loan  Agreement,  together  with any other  address or
addresses  set  forth on an  exhibit  hereto  as being a  Location  of  Tangible
Collateral.

q "Maximum WCMA Line of Credit" shall mean the maximum  aggregate line of credit
which MLBFS will extend to Customer subject to the terms and conditions  hereof,
as the same shall be reduced each month in accordance with the terms hereof.  On
the Closing Date, the Maximum WCMA Line of Credit will equal the Loan Amount.

r "Obligations"  shall mean all liabilities,  indebtedness and other obligations
of Customer  to MLBFS,  howsoever  created,  arising or  evidenced,  whether now
existing  or  hereafter  arising,  whether  direct  or  indirect,   absolute  or
contingent, due or to become due, primary or secondary or joint or several, and,
without limiting the foregoing, shall include interest accruing after the filing
of  any  petition  in  bankruptcy,  and  all  present  and  future  liabilities,
indebtedness  and  obligations  of Customer  under this Loan Agreement and under
that certain WCMA Note, Loan and Security Agreement No. 839-07D64.

s "Permitted  Liens" shall mean with  respect to the  Collateral:  (i) liens for
current taxes not delinquent, other non-consensual liens arising in the ordinary
course of business  for sums not due,  and, if MLBFS'  rights to and interest in
the Collateral are not materially and adversely affected thereby, any such liens
for  taxes or other  non-consensual  liens  arising  in the  ordinary  course of
business being contested in good faith by appropriate proceedings; (ii) liens in
favor of MLBFS;  (iii) liens which will be  discharged  with the proceeds of the
Loan;  (iv) existing  liens upon and leases of Equipment  and Fixtures,  if any,
together with any future  purchase  money liens upon and leases of Equipment and
Fixtures; and (v) any other liens expressly permitted in writing by MLBFS.

t  "Subsequent  WCMA  Loan"  shall  mean  each WCMA  Loan  other  than the Loan,
including, without limitation, each WCMA Loan to pay accrued interest.

u "Termination Date" shall mean the first to occur of: (i) the last Business Day
of the  eighty-fourth  (84th) full calendar month following the Closing Date, or
(ii) if earlier,  the date of termination of the WCMA Line of Credit pursuant to
the terms hereof.

v "WCMA Account" shall mean and refer to the Working Capital  Management Account
of Customer  with  MLPF&S  identified  as WCMA  Account  No.  839-07K51  and any
successor Working Capital Management Account of Customer with MLPF&S.

w "WCMA Loan" shall mean each advance made by MLBFS pursuant to the WCMA Line of
Credit, including the Loan and each Subsequent WCMA Loan.

x "WCMA  Loan  Balance"  shall  mean an  amount  equal to the  aggregate  unpaid
principal balance of all WCMA Loans.

1.2 Other Terms.  Except as otherwise defined herein: (i) all terms used in this
Loan  Agreement  which are  defined in the Uniform  Commercial  Code of Illinois
("UCC") shall have the meanings set forth in the UCC, and (ii) capitalized terms
used  herein  which  are  defined  in the  WCMA  Agreement  (including,  without
limitation,  "Money Accounts",  "Minimum Money Accounts Balance", "WCMA Directed
Reserve  Program" and "WCMA  Program")  shall have the meanings set forth in the
WCMA Agreement.

                              Article II. THE LOAN

2.1 Commitment.  Subject to the terms and conditions hereof, MLBFS hereby agrees
to make the Loan to Customer, and Customer hereby agrees to borrow the Loan from
MLBFS.  Except as otherwise  provided in Section 3.1 hereof, the entire proceeds
of the Loan will be  disbursed  by MLBFS  out of the WCMA Line of Credit  either
directly to the applicable third party or parties on account of the Loan Purpose
or to  reimburse  Customer  for  amounts  directly  expended  by it for the Loan
Purpose; all as directed by Customer in a Closing Certificate to be executed and
delivered to MLBFS prior to the date of funding.

2.2 Conditions of MLBFS' Obligation.  The Closing Date and MLBFS' obligations to
activate the WCMA Line of Credit,  as hereafter set forth,  and make the Loan on
the Closing Date are subject to the prior  fulfillment  of each of the following
conditions:  (a) not less than two Business Days prior to any requested  funding
date,  MLBFS  shall  have  received  a Closing  Certificate,  duly  executed  by
Customer,  setting  forth,  among other  things,  the amount of the Loan and the
method of payment and payee(s) of the proceeds thereof;  (b) after giving effect
to the Loan,  the WCMA Loan Balance will not exceed either the Maximum WCMA Line
of Credit or the Loan Amount; (c) the Commitment  Expiration Date shall not then
have occurred;  and (d) each of the General Funding  Conditions  shall then have
been met or satisfied to the reasonable satisfaction of MLBFS.

2.3  Commitment  Fee. In  consideration  of the agreement by MLBFS to extend the
Loan and any Subsequent WCMA Loans to Customer in accordance with and subject to
the terms hereof, Customer has paid or shall, on or before the Closing Date pay,
the  Commitment  Fee  to  MLBFS.  Customer  acknowledges  and  agrees  that  the
Commitment  Fee has been fully  earned by MLBFS,  and that it will not under any
circumstances be refundable.

                      Article III. THE WCMA LINE OF CREDIT

3.1  Activation of the WCMA Line of Credit.  Subject to the terms and conditions
hereof,  on the  Closing  Date  MLBFS  will  activate  a WCMA Line of Credit for
Customer  in the Loan  Amount.  The Loan will be funded  out of the WCMA Line of
Credit  immediately  after such activation  (or, if and to the extent  otherwise
expressly  contemplated in the definition of Loan Purpose or otherwise  directed
in the Closing  Certificate and hereafter expressly agreed by MLBFS, all or part
of the Loan  may be made  available  as a WCMA  Line of  Credit  and  funded  by
Customer.)

3.2 Subsequent WCMA Loans.  Subject to the terms and conditions  hereof,  during
the period from and after the Closing Date to the Termination Date: (a) Customer
may repay the WCMA Loan Balance in whole or in part at any time without  premium
or penalty  (except,  as  hereafter  set forth,  upon a  refinancing  by another
lender),  and request a re-borrowing of amounts repaid on a revolving basis, and
(b) in  addition  to  Subsequent  WCMA Loans made  automatically  to pay accrued
interest,  as hereafter provided,  MLBFS will make such Subsequent WCMA Loans as
Customer  may from  time to time  request  or be  deemed  to have  requested  in
accordance with the terms hereof.  Customer may request Subsequent WCMA Loans by
use of WCMA Checks, FTS, Visa(R) charges, wire transfers, or such other means of
access  to the WCMA Line of Credit  as may be  permitted  by MLBFS  from time to
time;  it being  understood  that so long as the WCMA Line of Credit shall be in
effect,  any charge or debit to the WCMA Account  which but for the WCMA Line of
Credit would under the terms of the WCMA Agreement result in an overdraft, shall
be deemed a request by Customer for a Subsequent WCMA Loan.

3.3 Conditions of Subsequent WCMA Loans.  Notwithstanding  the foregoing,  MLBFS
shall not be obligated to make any Subsequent  WCMA Loan, and may without notice
refuse to honor any such request by Customer, if at the time of receipt by MLBFS
of Customer's  request:  (a) the making of such Subsequent WCMA Loan would cause
the  Maximum  WCMA Line of Credit,  as reduced  pursuant  to the  provisions  of
Section 3.6  hereof,  to be  exceeded;  or (b) the  Termination  Date shall have
occurred; or (c) an event shall have occurred and be continuing which shall have
caused any of the General Funding  Conditions to not then be met or satisfied to
the reasonable satisfaction of MLBFS. The making by MLBFS of any Subsequent WCMA
Loan (including, without limitation, the making of a Subsequent WCMA Loan to pay
accrued interest or late charges,  as hereafter provided) at a time when any one
or more of said  conditions  shall  not have  been met shall not in any event be
construed as a waiver of said  condition or  conditions  or of any Default,  and
shall not prevent MLBFS at any time  thereafter  while any  condition  shall not
have been met from  refusing to honor any request by Customer  for a  Subsequent
WCMA Loan.

3.4 WCMA Note.  Customer  hereby  promises to pay to the order of MLBFS,  at the
times  and in the  manner  set forth in this Loan  Agreement,  or in such  other
manner and at such place as MLBFS may  hereafter  designate in writing:  (a) the
WCMA Loan  Balance;  (b) interest at the Interest Rate on the  outstanding  WCMA
Loan Balance  (computed  for the actual number of days elapsed on the basis of a
year  consisting of 360 days),  from and including the date on which the Loan is
made until the date of payment of all WCMA Loans in full; and (c) on demand, all
other sums payable pursuant to this Loan Agreement,  including,  but not limited
to, any late charges.  Except as otherwise expressly set forth herein,  Customer
hereby waives  presentment,  demand for payment,  protest and notice of protest,
notice of dishonor,  notice of acceleration,  notice of intent to accelerate and
all other notices and  formalities  in  connection  with this WCMA Note and this
Loan Agreement.

3.5 Interest.  (a) An amount equal to accrued  interest on the WCMA Loan Balance
shall be payable by Customer monthly on each Interest Due Date,  commencing with
the Interest Due Date  occurring in the calendar month in which the Closing Date
shall occur. Unless otherwise hereafter directed in writing by MLBFS on or after
the Termination  Date, such interest will be  automatically  charged to the WCMA
Account on the  applicable  Interest Due Date,  and, to the extent not paid with
free credit  balances or the proceeds of sales of any Money Accounts then in the
WCMA Account, as hereafter provided,  such interest will be paid by a Subsequent
WCMA Loan and added to the WCMA Loan Balance. All interest shall be computed for
the actual number of days elapsed on the basis of a year consisting of 360 days.

(b)  Notwithstanding  any provision to the contrary in this  Agreement or any of
the  Additional  Agreements,  no  provision  of  this  Agreement  or  any of the
Additional  Agreements shall require the payment or permit the collection of any
amount in excess of the maximum  amount of interest  permitted  to be charged by
law  ("Excess  Interest").  If  any  Excess  Interest  is  provided  for,  or is
adjudicated  as being  provided for, in this  Agreement or any of the Additional
Agreements,  then:  (i)  Customer  shall  not be  obligated  to pay  any  Excess
Interest; and (ii) any Excess Interest that MLBFS may have received hereunder or
under any of the Additional  Agreements shall, at the option of MLBFS, be either
applied as a credit against the then WCMA Loan Balance, or refunded to the payer
thereof.

3.6 Periodic  Reduction of Maximum WCMA Line of Credit.  Commencing  on the last
Business Day of the first full calendar  month  following the Closing Date,  and
continuing  on the last Business Day of each  calendar  month  thereafter to and
including the last Business Day of the eighty-third  (83rd) such calendar month,
the  Maximum  WCMA  Line of  Credit  shall  be  reduced  by an  amount  equal to
one-eighty-fourth  (1/ 84th) of the Loan Amount per month.  Unless the WCMA Line
of Credit shall have been earlier  terminated  pursuant to the terms hereof,  on
the last Business Day of the  eighty-fourth  (84th) calendar month following the
Closing Date, the WCMA Line of Credit shall, without further action of either of
the parties hereto,  be terminated,  Customer shall pay to MLBFS the entire WCMA
Loan Balance,  if any, and all other Obligations,  and the WCMA Account,  at the
option of Customer,  will either be converted to a WCMA Cash Account (subject to
any  requirements  of MLPF&S) or terminated.  No failure or delay on the part of
MLBFS in entering into the WCMA computer  system any scheduled  reduction in the
Maximum WCMA Line of Credit  pursuant to this  Section  shall have the effect of
preventing or delaying such reduction.

3.7 Mandatory Payments.  CUSTOMER AGREES THAT IT WILL, WITHOUT DEMAND, INVOICING
OR THE REQUEST OF MLBFS,  FROM TIME TO TIME MAKE SUFFICIENT  PAYMENTS ON ACCOUNT
OF THE WCMA LOAN  BALANCE TO ASSURE THAT THE WCMA LOAN  BALANCE  WILL NOT AT ANY
TIME EXCEED THE MAXIMUM WCMA LINE OF CREDIT,  AS REDUCED EACH MONTH  PURSUANT TO
SECTION 3.6 HEREOF.

3.8 Method of Making  Payments.  All  payments  required or permitted to be made
pursuant  to this Loan  Agreement  shall be made in lawful  money of the  United
States.  Unless otherwise hereafter directed by MLBFS, such payments may be made
by the delivery of checks (other than WCMA  Checks),  or by means of FTS or wire
transfer of funds  (other than funds from the WCMA Line of Credit) to MLPF&S for
credit to the WCMA  Account.  Payments  to MLBFS from funds in the WCMA  Account
shall be deemed to be made by Customer upon the same basis and schedule as funds
are made available for  investment in the Money Accounts in accordance  with the
terms of the WCMA Agreement.  The acceptance by or on behalf of MLBFS of a check
or other payment for a lesser amount than shall be due from Customer, regardless
of any endorsement or statement thereon or transmitted  therewith,  shall not be
deemed an accord and  satisfaction  or anything other than a payment on account,
and MLBFS or anyone  acting on behalf of MLBFS may  accept  such  check or other
payment without prejudice to the rights of MLBFS to recover the balance actually
due or to pursue any other remedy under this Loan  Agreement or  applicable  law
for such  balance.  All checks  accepted by or on behalf of MLBFS in  connection
with this Loan Agreement are subject to final collection.

3.9  Irrevocable  Instructions  to MLPF&S.  In order to  minimize  the WCMA Loan
Balance, Customer hereby irrevocably authorizes and directs MLPF&S, effective on
the Closing Date and continuing thereafter so long as this Agreement shall be in
effect: (a) to immediately and prior to application for any other purpose pay to
MLBFS to the  extent  of any WCMA  Loan  Balance  or other  amounts  payable  by
Customer  hereunder all available free credit  balances from time to time in the
WCMA Account; and (b) if such available free credit balances are insufficient to
pay the WCMA Loan  Balance  and such  other  amounts,  and there are in the WCMA
Account  at  any  time  any  investments  in  Money  Accounts  (other  than  any
investments  constituting  any Minimum  Money  Accounts  Balance  under the WCMA
Directed Reserve Program),  to immediately liquidate such investments and pay to
MLBFS to the  extent  of any  WCMA  Loan  Balance  and such  other  amounts  the
available proceeds from the liquidation of any such Money Accounts.

3.10 Late  Charge.  Any  payment  or  deposit  required  to be made by  Customer
pursuant to this Loan Agreement or any of the Additional  Agreements not paid or
made within ten (10) days of the  applicable due date shall be subject to a late
charge in an amount equal to the lesser of: (a) 5% of the overdue amount, or (b)
the maximum  amount  permitted  by  applicable  law.  Such late charge  shall be
payable on demand,  or, without  demand,  may in the sole discretion of MLBFS be
paid by a  Subsequent  WCMA Loan and added to the WCMA Loan  Balance in the same
manner as provided herein for accrued  interest with respect to the WCMA Line of
Credit.

3.11  Prepayment.  Customer may prepay the Loan and any Subsequent  WCMA Loan at
any time in whole or in part without premium or penalty; provided, however, that
any refinancing of the WCMA Loan Balance by another financial institution shall:
(a) if such  refinancing  shall  occur  prior to the  first  anniversary  of the
Closing Date, be accompanied by a premium in an amount equal to 3% of the amount
prepaid by such refinancing; (b) if such refinancing shall occur thereafter, but
prior to the second anniversary of the Closing Date, be accompanied by a premium
in an amount equal to 2% of the amount prepaid by such  refinancing;  and (c) if
such refinancing  shall occur on or at any time after the second  anniversary of
the Closing  Date, be  accompanied  by a premium in an amount equal to 1% of the
amount prepaid by such refinancing.

3.12 Option of Customer to Terminate. Customer will have the option to terminate
the WCMA Line of Credit at any time upon written  notice to MLBFS.  Concurrently
with any such  termination,  Customer  shall pay to MLBFS the  entire  WCMA Loan
Balance and all other Obligations.

3.13 Limitation of Liability. MLBFS shall not be responsible,  and shall have no
liability to Customer or any other  party,  for any delay or failure of MLBFS to
honor any  request of  Customer  for a WCMA Loan or any other act or omission of
MLBFS,  MLPF&S or any of their  affiliates  due to or resulting  from any system
failure, error or delay in posting or other clerical error, loss of power, fire,
Act of God or other cause beyond the reasonable control of MLBFS,  MLPF&S or any
of their  affiliates  unless directly arising out of the willful wrongful act or
active gross  negligence of MLBFS. In no event shall MLBFS be liable to Customer
or any other party for any incidental or consequential  damages arising from any
act or omission by MLBFS,  MLPF&S or any of their  affiliates in connection with
the WCMA Line of Credit or this Loan Agreement.

3.14 Statements.  MLPF&S will include in each monthly  statement it issues under
the WCMA  Program  information  with  respect  to WCMA  Loans  and the WCMA Loan
Balance.  Any questions that Customer may have with respect to such  information
or the Loan should be directed to MLBFS;  and any questions  with respect to any
other matter in such statements or about or affecting the WCMA Program should be
directed to MLPF&S.


<PAGE>


                         Article IV. GENERAL PROVISIONS

4.1 Representations and Warranties.

Customer represents and warrants to MLBFS that:

a  Organization  and Existence.  Customer is a  corporation,  duly organized and
validly  existing in good standing  under the laws of the State of Nevada and is
qualified  to do  business  and in good  standing  in each other state where the
nature of its  business  or the  property  owned by it make  such  qualification
necessary.

b Execution,  Delivery and Performance. The execution,  delivery and performance
by Customer of this Loan  Agreement  and such of the  Additional  Agreements  to
which it is a party: (i) have been duly authorized by all requisite action, (ii)
do not and will  not  violate  or  conflict  with any law or other  governmental
requirement, or any of the agreements,  instruments or documents which formed or
govern  Customer,  and (iii) do not and will not  breach or  violate  any of the
provisions  of, and will not result in a default by  Customer  under,  any other
agreement,  instrument  or document to which it is a party or by which it or its
properties are bound.

c Notices and Approvals. Except as may have been given or obtained, no notice to
or consent or  approval of any  governmental  body or  authority  or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection with the execution, delivery or performance by Customer of such of
this Loan Agreement and the Additional Agreements to which it is a party.

d Enforceability.  This Loan Agreement and such of the Additional  Agreements to
which  Customer  is a party are the  legal,  valid and  binding  obligations  of
Customer,  enforceable  against it in accordance  with their  respective  terms,
except as  enforceability  may be limited by  bankruptcy  and other similar laws
affecting the rights of creditors generally or by general principles of equity.

e  Collateral.  Except  for any  Permitted  Liens:  (i)  Customer  has  good and
marketable  title to the  Collateral,  (ii) none of the Collateral is subject to
any lien,  encumbrance  or security  interest,  and (iii) upon the filing of all
Uniform Commercial Code financing  statements  executed by Customer with respect
to the Collateral in the  appropriate  jurisdiction(s)  and/or the completion of
any other action  required by  applicable  law to perfect its liens and security
interests,  MLBFS  will  have  valid and  perfected  first  liens  and  security
interests upon all of the Collateral.

f Financial  Statements.  Except as expressly set forth in Customer's  financial
statements,  all financial  statements of Customer  furnished to MLBFS have been
prepared  in  conformity   with  generally   accepted   accounting   principles,
consistently applied, are true and correct in all material respects,  and fairly
present the  financial  condition  of it as at such dates and the results of its
operations for the periods then ended (subject, in the case of interim unaudited
financial statements, to normal year-end adjustments); and since the most recent
date covered by such financial  statements,  there has been no material  adverse
change in any such financial condition or operation.

g  Litigation.  No  litigation,  arbitration,   administrative  or  governmental
proceedings  are pending or, to the  knowledge of Customer,  threatened  against
Customer, which would, if adversely determined,  materially and adversely affect
the  liens  and  security  interests  of MLBFS  hereunder  or  under  any of the
Additional  Agreements,  the  financial  condition of Customer or the  continued
operations of Customer.

h Tax Returns. All federal, state and local tax returns,  reports and statements
required  to  be  filed  by  Customer  have  been  filed  with  the  appropriate
governmental agencies and all taxes due and payable by Customer have been timely
paid  (except  to the  extent  that  any  such  failure  to file or pay will not
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements,  the financial condition of
Customer, or the continued operations of Customer).

i        Collateral Location. All of the tangible Collateral is located at a
Location of Tangible Collateral.

Each of the foregoing  representations and warranties:  (i) has been and will be
relied upon as an inducement to MLBFS to make the Loan and each  Subsequent WCMA
Loan,  and (ii) is  continuing  and shall be deemed  remade by  Customer  on the
Closing Date,  and  concurrently  with each request by Customer for a Subsequent
WCMA Loan.

4.2 Financial and Other Information.

Customer shall furnish or cause to be furnished to MLBFS during the term of this
Loan Agreement all of the following:

a Annual  Financial  Statements.  Within 120 days after the close of each fiscal
year of  Customer,  Customer  shall  furnish or cause to be furnished to MLBFS a
copy of the annual audited  financial  statements of Customer,  consisting of at
least a balance sheet as at the close of such fiscal year and related statements
of  income,   retained  earnings  and  cash  flows,  certified  by  its  current
independent  certified public accountants or other independent  certified public
accountants reasonably acceptable to MLBFS.

b Interim  Financial  Statements.  Within 45 days after the close of each fiscal
quarter of Customer,  Customer  shall furnish or cause to be furnished to MLBFS:
(i) its statement of profit and loss for the fiscal quarter then ended, and (ii)
a balance sheet as at the close of such fiscal quarter; all in reasonable detail
and certified by its chief financial officer.

c Other Interim  Reports.  Within 45 days after the close of each fiscal quarter
of Customer,  Customer  shall furnish or cause to be furnished to MLBFS an aging
of Accounts and Chattel Paper and an Inventory report for Customer as of the end
of such fiscal  quarter,  all in  reasonable  detail and  certified by its chief
financial officer.

d   Other  Information.  Customer  shall furnish or cause to be furnished to
MLBFS such other  information as MLBFS may from time to time reasonably request
relating to Customer or the Collateral.

4.3 Other Covenants. Customer further covenants and agrees during the term of
 this Loan Agreement that:

(a) Financial Records; Inspection.  Customer will: (i) maintain at its principal
place of business  complete and accurate books and records,  and maintain all of
its  financial  records in a manner  consistent  with the  financial  statements
heretofore  furnished  to  MLBFS,  or  prepared  on such  other  basis as may be
approved  in  writing by MLBFS;  and (ii)  permit  MLBFS or its duly  authorized
representatives,  upon reasonable notice and at reasonable times, to inspect its
properties (both real and personal), operations, books and records.

(b)  Taxes.  Customer  will  pay  when  due all  taxes,  assessments  and  other
governmental  charges,  howsoever  designated,  and all  other  liabilities  and
obligations,  except  to the  extent  that  any  such  failure  to pay  will not
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements,  the financial condition of
Customer or the continued operations of Customer.

(c)  Compliance  With Laws and  Agreements.  Customer  will not violate any law,
regulation or other governmental requirement, any judgment or order of any court
or governmental agency or authority, or any agreement, instrument or document to
which  it is a party  or by  which  it is  bound,  if any  such  violation  will
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements,  or the financial condition
or the continued operations of Customer.

(d) Use of Loan  Proceeds;  Securities  Transactions.  The  proceeds of the Loan
shall be used by  Customer  solely  for the Loan  Purpose,  or,  with the  prior
written  consent of MLBFS,  for other lawful  business  purposes of Customer not
prohibited  hereby.  The proceeds of each  Subsequent WCMA Loan shall be used by
Customer  solely  for  working  capital  in the  ordinary  course of  Customer's
business, or, with the prior written consent of MLBFS, for other lawful business
purposes  of  Customer  not  prohibited  hereby.  Customer  agrees that under no
circumstances will the proceeds of the Loan or any Subsequent WCMA Loan be used:
(i) for personal, family or household purposes of any person whatsoever, or (ii)
to purchase,  carry or trade in securities,  or repay debt incurred to purchase,
carry or trade in securities, whether in or in connection with the WCMA Account,
another  account of Customer  with MLPF&S or an account of Customer at any other
broker or dealer in securities.

(e)  Notification By Customer.  Customer shall provide MLBFS with prompt written
notification  of: (i) any Default;  (ii) any  materially  adverse  change in the
business,   financial  condition  or  operations  of  Customer;  and  (iii)  any
information  which  indicates that any financial  statements of Customer fail in
any material  respect to present  fairly the financial  condition and results of
operations  purported to be presented in such statements.  Each  notification by
Customer  pursuant  hereto shall specify the event or  information  causing such
notification, and, to the extent applicable, shall specify the steps being taken
to rectify or remedy such event or information.

(f)  Notice of  Change.  Customer  shall  give MLBFS not less than 30 days prior
written  notice of any change in the name  (including  any  fictitious  name) or
principal place of business or residence of Customer.

(g) Continuity.  Except upon the prior written  consent of MLBFS,  which consent
will not be  unreasonably  withheld:  (i)  Customer  shall not be a party to any
merger  or  consolidation   with,  or  purchase  or  otherwise  acquire  all  or
substantially  all of the assets of, or any material stock,  partnership,  joint
venture or other equity interest in, any person or entity, or sell,  transfer or
lease all or any substantial part of its assets, if any such action would result
in either: (A) a material change in the principal business, ownership or control
of Customer,  or (B) a material  adverse  change in the  financial  condition or
operations  of Customer;  (ii)  Customer  shall  preserve its existence and good
standing in the  jurisdiction(s) of establishment and operation;  (iii) Customer
shall not  engage in any  material  business  substantially  different  from its
business in effect as of the date of  application  by  Customer  for credit from
MLBFS,  or cease operating any such material  business;  (iv) Customer shall not
cause or permit any other  person or entity to assume or succeed to any material
business or operations of Customer;  and (v) Customer  shall not cause or permit
any material change in its controlling ownership.

(h) Minimum  Tangible  Net  Worth.Customer's  "tangible  net worth" shall at all
times exceed  $1,100,000.00.  For the purposes  hereof,  the term  "tangible net
worth" shall mean Customer's net worth as shown on Customer's  regular financial
statements  prepared in a manner consistent with the terms hereof, but excluding
an  amount  equal  to:  (i)  any  assets  which  are  ordinarily  classified  as
"intangible" in accordance with generally accepted  accounting  principles,  and
(ii) any amounts now or hereafter  directly or  indirectly  owing to Customer by
officers, shareholders or affiliates of Customer.

(i) Debt to Tangible Net Worth.  The ratio of Customer's  total debt to
Customer's  tangible net worth,  determined as aforesaid, shall not at
any time exceed 2 to 1.

4.4 Collateral

(a) Pledge of Collateral.  To secure payment and performance of the Obligations,
Customer hereby pledges,  assigns,  transfers and sets over to MLBFS, and grants
to MLBFS first liens and security  interests in and upon all of the  Collateral,
subject only to Permitted Liens.

(b) Liens.  Except upon the prior written  consent of MLBFS,  Customer shall not
create or permit to exist any lien,  encumbrance  or security  interest  upon or
with  respect  to any  Collateral  now owned or  hereafter  acquired  other than
Permitted Liens.

(c)  Performance of  Obligations.  Customer shall perform all of its obligations
owing on account of or with respect to the Collateral;  it being understood that
nothing herein, and no action or inaction by MLBFS, under this Loan Agreement or
otherwise,  shall be deemed an  assumption  by MLBFS of any of  Customer's  said
obligations.

(d) Sales and  Collections.  So long as no Event of Default  shall have occurred
and be continuing, Customer may in the ordinary course of its business: (i) sell
any  Inventory  normally  held by  Customer  for sale,  (ii) use or consume  any
materials  and supplies  normally held by Customer for use or  consumption,  and
(iii) collect all of its Accounts.  Customer shall take such action with respect
to protection of its Inventory and the other  Collateral  and the  collection of
its Accounts as MLBFS may from time to time reasonably request.

(e) Account Schedules.  Upon the request of MLBFS, made now or at any reasonable
time or times  hereafter,  Customer  shall deliver to MLBFS,  in addition to the
other information required hereunder,  a schedule identifying,  for each Account
and all Chattel  Paper  subject to MLBFS'  security  interests  hereunder,  each
Account  Debtor by name and address and amount,  invoice or contract  number and
date of  each  invoice  or  contract.  Customer  shall  furnish  to  MLBFS  such
additional  information with respect to the Collateral,  and amounts received by
Customer as proceeds  of any of the  Collateral,  as MLBFS may from time to time
reasonably request.

(f) Alterations and Maintenance. Except upon the prior written consent of MLBFS,
Customer  shall not make or permit  any  material  alterations  to any  tangible
Collateral which might materially  reduce or impair its market value or utility.
Customer  shall at all times keep the tangible  Collateral in good condition and
repair, reasonable wear and tear excepted, and shall pay or cause to be paid all
obligations arising from the repair and maintenance of such Collateral,  as well
as all obligations with respect to each Location of Tangible Collateral,  except
for  any  such  obligations  being  contested  by  Customer  in  good  faith  by
appropriate proceedings.

(g) Location. Except for movements required in the ordinary course of Customer's
business, Customer shall give MLBFS 30 days' prior written notice of the placing
at or movement of any tangible  Collateral to any location other than a Location
of Tangible Collateral.  In no event shall Customer cause or permit any material
tangible  Collateral  to be removed from the United  States  without the express
prior written consent of MLBFS.

(h)  Insurance.  Customer  shall insure all of the tangible  Collateral  under a
policy or policies of physical  damage  insurance  providing that losses will be
payable to MLBFS as its interests may appear pursuant to a Lender's Loss Payable
Endorsement and containing such other  provisions as may be reasonably  required
by MLBFS.  Customer  shall further  provide and maintain a policy or policies of
comprehensive  public  liability  insurance  naming MLBFS as an additional party
insured.  Customer shall maintain such other insurance as may be required by law
or is  customarily  maintained  by companies in a similar  business or otherwise
reasonably  required by MLBFS.  All such  insurance  policies shall provide that
MLBFS  will  receive  not  less  than  10  days  prior  written  notice  of  any
cancellation,  and shall  otherwise be in form and amount and with an insurer or
insurers  reasonably  acceptable to MLBFS.  Customer  shall furnish MLBFS with a
copy or certificate of each such policy or policies and, prior to any expiration
or cancellation, each renewal or replacement thereof.

(i) Event of Loss.  Customer shall at its expense promptly repair all repairable
damage to any tangible Collateral.  In the event that any tangible Collateral is
damaged  beyond repair,  lost,  totally  destroyed or confiscated  (an "Event of
Loss") and such Collateral had a value prior to such Event of Loss of $25,000.00
or more,  then,  on or  before  the  first to  occur  of (i) 90 days  after  the
occurrence  of such Event of Loss,  or (ii) 10  Business  Days after the date on
which  either  Customer or MLBFS  shall  receive any  proceeds of  insurance  on
account  of  such  Event  of  Loss,  or any  underwriter  of  insurance  on such
Collateral shall advise either Customer or MLBFS that it disclaims  liability in
respect of such Event of Loss,  Customer  shall,  at Customer's  option,  either
replace the Collateral subject to such Event of Loss with comparable  Collateral
free of all liens other than  Permitted  Liens (in which event Customer shall be
entitled to utilize the  proceeds of  insurance on account of such Event of Loss
for such  purpose,  and may retain any excess  proceeds of such  insurance),  or
permanently  prepay the Loan by an amount equal to the actual cash value of such
Collateral as determined  by either the  insurance  company's  payment (plus any
applicable   deductible)  or,  in  absence  of  insurance  company  payment,  as
reasonably  determined  by  MLBFS;  it being  further  understood  that any such
permanent  prepayment shall be accompanied by a like permanent  reduction in the
Maximum WCMA Line of Credit.  Notwithstanding  the foregoing,  if at the time of
occurrence of such Event of Loss or any time thereafter  prior to replacement or
line  reduction,  as  aforesaid,  an Event of Default shall have occurred and be
continuing hereunder, then MLBFS may at its sole option, exercisable at any time
while such Event of Default  shall be  continuing,  require  Customer  to either
replace such  Collateral  or prepay the Loan and reduce the Maximum WCMA Line of
Credit, as aforesaid.

(j) Notice of Certain Events.  Customer shall give MLBFS immediate notice of any
attachment,  lien, judicial process, encumbrance or claim affecting or involving
$25,000.00 or more of the Collateral.

(k)  Indemnification.  Customer shall indemnify,  defend and save MLBFS harmless
from and against any and all claims,  liabilities,  losses,  costs and  expenses
(including, without limitation,  reasonable attorneys' fees and expenses) of any
nature whatsoever which may be asserted against or incurred by MLBFS arising out
of or in any manner occasioned by (i) the ownership, collection, possession, use
or operation of any  Collateral,  or (ii) any failure by Customer to perform any
of its obligations hereunder;  excluding,  however, from said indemnity any such
claims,  liabilities,  etc.  arising directly out of the willful wrongful act or
active gross negligence of MLBFS. This indemnity shall survive the expiration or
termination of this Loan  Agreement as to all matters  arising or accruing prior
to such expiration or termination.

4.5 Events of Default.

The  occurrence  of any of the  following  events shall  constitute an "Event of
Default" under this Loan Agreement:

(a) Failure to Pay. (i) Customer  shall fail to deposit into the WCMA Account an
amount  sufficient  to assure  that the WCMA Loan  Balance  does not  exceed the
Maximum  WCMA Line of  Credit,  as  reduced in  accordance  with the  provisions
hereof,  or (ii)  Customer  shall fail to pay to MLBFS or deposit  into the WCMA
Account  when due any other  amount owing or required to be paid or deposited by
Customer under this Loan Agreement, or (iii) Customer shall fail to pay when due
any other  Obligations;  and any such failure shall  continue for more than five
(5) Business Days after written notice thereof shall have been given by MLBFS to
Customer.

(b) Failure to Perform.  Customer shall default in the performance or observance
of any covenant or agreement on its part to be performed or observed  under this
Loan Agreement or any of the Additional Agreements (not constituting an Event of
Default under any other clause of this Section), and such default shall continue
unremedied  for ten (10) Business Days after written  notice  thereof shall have
been given by MLBFS to Customer.

(c) Breach of Warranty.  Any  representation or warranty made by Customer or any
other party  providing  collateral  for the  Obligations  contained in this Loan
Agreement or any of the other  Additional  Agreements shall at any time prove to
have been incorrect in any material respect when made.

(d)  Default  Under Other  Agreement.  A default or Event of Default by Customer
shall occur under the terms of any other agreement,  instrument or document with
or intended for the benefit of MLBFS, MLPF&S or any of their affiliates, and any
required  notice shall have been given and  required  passage of time shall have
elapsed.

(e) Bankruptcy Event. Any Bankruptcy Event shall occur.

(f)  Material  Impairment.  Any event shall occur which shall  reasonably  cause
MLBFS to in good faith believe that the prospect of full payment or  performance
by Customer of its  liabilities or obligations  under this Loan Agreement or any
of the Additional  Agreements to which  Customer is a party has been  materially
impaired.  The existence of such a material  impairment shall be determined in a
manner consistent with the intent of Section 1-208 of the UCC.

(g) Acceleration of Debt to Other Creditors. Any event shall occur which results
in the  acceleration of the maturity of any  indebtedness of $100,000.00 or more
of Customer to another creditor under any indenture, agreement,  undertaking, or
otherwise.

(h)  Seizure  or Abuse of  Collateral.  The  Collateral,  or any  material  part
thereof,  shall be or become  subject to any  material  abuse or misuse,  or any
levy, attachment,  seizure or confiscation which is not released within ten (10)
Business Days.

4.6 Remedies.

(a) Remedies Upon Default. Upon the occurrence and during the continuance of any
Event of Default,  MLBFS may at its sole option do any one or more or all of the
following,  at such time and in such  order as MLBFS may in its sole  discretion
choose:

(i)  Termination.  MLBFS may without notice terminate its obligation to make the
Loan (if the Loan has not then been funded),  terminate the WCMA Line of Credit,
and  terminate  any  obligation  to make any  Subsequent  WCMA Loan  (including,
without  limitation,  any  Subsequent  WCMA  Loan to pay  accrued  interest)  or
otherwise  extend  any  credit  to or for the  benefit  of  Customer  (it  being
understood  that upon the  occurrence of any  Bankruptcy  Event the WCMA Line of
Credit and all such obligations shall automatically terminate without any action
on the part of MLBFS);  and upon any such termination MLBFS shall be relieved of
all such obligations.

(ii)  Acceleration.  MLBFS  may  declare  the WCMA  Loan  Balance  and all other
Obligations to be forthwith due and payable, whereupon all such amounts shall be
immediately due and payable,  without presentment,  demand for payment,  protest
and notice of protest,  notice of dishonor,  notice of  acceleration,  notice of
intent to accelerate or other notice or formality of any kind,  all of which are
hereby  expressly  waived;  provided,  however,  that upon the occurrence of any
Bankruptcy Event the WCMA Loan Balance and other Obligations shall automatically
become due and payable without any action on the part of MLBFS.

(iii)  Exercise  Rights of Secured  Party.  MLBFS may exercise any or all of the
remedies of a secured party under applicable law, including, but not limited to,
the UCC,  and any or all of its  other  rights  and  remedies  under  this  Loan
Agreement and the Additional Agreements.

(iv)  Possession.  MLBFS may  require  Customer to make the  Collateral  and the
records pertaining to the Collateral available to MLBFS at a place designated by
MLBFS which is reasonably  convenient to Customer, or may take possession of the
Collateral and the records  pertaining to the Collateral  without the use of any
judicial process and without any prior notice to Customer.

(v) Sale.  MLBFS may sell any or all of the Collateral at public or private sale
upon such terms and  conditions as MLBFS may reasonably  deem proper.  MLBFS may
purchase any  Collateral  at any such public sale.  The net proceeds of any such
public or private sale and all other amounts  actually  collected or received by
MLBFS pursuant  hereto,  after deducting all costs and expenses  incurred at any
time in the collection of the Obligations and in the protection,  collection and
sale of the Collateral, will be applied to the payment of the Obligations,  with
any remaining proceeds paid to Customer or whoever else may be entitled thereto,
and with Customer  remaining  liable for any amount  remaining unpaid after such
application.

(vi) Delivery of Cash, Checks, Etc. MLBFS may require Customer to forthwith upon
receipt,  transmit and deliver to MLBFS in the form received,  all cash, checks,
drafts and other instruments for the payment of money (properly endorsed,  where
required, so that such items may be collected by MLBFS) which may be received by
Customer at any time in full or partial payment of any  Collateral,  and require
that  Customer not commingle any such items which may be so received by Customer
with any other of its funds or property but instead hold them separate and apart
and in trust for MLBFS until delivery is made to MLBFS.

(vii) Notification of Account Debtors.  MLBFS may notify any Account Debtor that
its Account or Chattel  Paper has been assigned to MLBFS and direct such Account
Debtor to make payment directly to MLBFS of all amounts due or becoming due with
respect to such  Account or Chattel  Paper;  and MLBFS may  enforce  payment and
collect, by legal proceedings or otherwise, such Account or Chattel Paper.

(viii)  Control of  Collateral.  MLBFS may otherwise  take control in any lawful
manner of any cash or non-cash items of payment or proceeds of Collateral and of
any rejected,  returned, stopped in transit or repossessed goods included in the
Collateral and endorse  Customer's name on any item of payment on or proceeds of
the Collateral.

(b) Set-Off.  MLBFS shall have the further right upon the  occurrence and during
the continuance of an Event of Default to set-off,  appropriate and apply toward
payment of any of the  Obligations,  in such order of  application  as MLBFS may
from time to time and at any time elect, any cash, credit,  deposits,  accounts,
financial  assets,  investment  property,  securities  and any other property of
Customer  which is in  transit  to or in the  possession,  custody or control of
MLBFS,  MLPF&S or any agent,  bailee, or affiliate of MLBFS or MLPF&S.  Customer
hereby  collaterally  assigns and grants to MLBFS a continuing security interest
in all such property as additional Collateral.

(c) Power of Attorney.  Effective upon the occurrence and during the continuance
of an  Event of  Default,  Customer  hereby  irrevocably  appoints  MLBFS as its
attorney-in-fact, with full power of substitution, in its place and stead and in
its name or in the name of MLBFS, to from time to time in MLBFS' sole discretion
take any action and to execute any instrument  which MLBFS may deem necessary or
advisable to accomplish the purposes of this Loan Agreement,  including, but not
limited  to, to  receive,  endorse  and  collect  all  checks,  drafts and other
instruments  for the payment of money made  payable to Customer  included in the
Collateral.

(d)  Remedies are  Severable  and  Cumulative.  All rights and remedies of MLBFS
herein are  severable  and  cumulative  and in addition to all other  rights and
remedies  available in the Additional  Agreements,  at law or in equity, and any
one or more of such  rights and  remedies  may be  exercised  simultaneously  or
successively.

(e) Notices.  To the fullest extent permitted by applicable law, Customer hereby
irrevocably  waives and releases MLBFS of and from any and all  liabilities  and
penalties for failure of MLBFS to comply with any statutory or other requirement
imposed upon MLBFS relating to notices of sale,  holding of sale or reporting of
any sale, and Customer waives all rights of redemption or reinstatement from any
such sale.  Any notices  required  under  applicable law shall be reasonably and
properly  given to Customer if given by any of the  methods  provided  herein at
least 5 Business  Days  prior to taking  action.  MLBFS  shall have the right to
postpone  or adjourn any sale or other  disposition  of  Collateral  at any time
without  giving  notice of any such  postponed or adjourned  date.  In the event
MLBFS seeks to take possession of any or all of the Collateral by court process,
Customer further  irrevocably  waives to the fullest extent permitted by law any
bonds and any surety or security relating thereto required by any statute, court
rule or  otherwise  as an  incident  to such  possession,  and  any  demand  for
possession prior to the commencement of any suit or action.

4.7 Miscellaneous.

(a)  Non-Waiver.  No  failure  or delay on the part of MLBFS in  exercising  any
right,  power or remedy pursuant to this Loan Agreement or any of the Additional
Agreements shall operate as a waiver thereof,  and no single or partial exercise
of any such right,  power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. Neither any waiver
of any provision of this Loan Agreement or any of the Additional Agreements, nor
any consent to any departure by Customer  therefrom,  shall be effective  unless
the same shall be in writing and signed by MLBFS. Any waiver of any provision of
this Loan Agreement or any of the  Additional  Agreements and any consent to any
departure by Customer  from the terms  thereof  shall be  effective  only in the
specific  instance  and for the  specific  purpose  for which  given.  Except as
otherwise expressly provided herein, no notice to or demand on Customer shall in
any case entitle Customer to any other or further notice or demand in similar or
other circumstances.

(b) Disclosure.  Customer hereby  irrevocably  authorizes  MLBFS and each of its
affiliates,  including without limitation MLPF&S, to at any time (whether or not
an Event of Default shall have occurred)  obtain from and disclose to each other
any and all financial and other information about Customer.

(c) Communications.  All notices and other communications  required or permitted
hereunder or in connection  with any of the  Additional  Agreements  shall be in
writing,  and shall be either  delivered  personally,  mailed by postage prepaid
certified  mail or sent by  express  overnight  courier  or by  facsimile.  Such
notices and  communications  shall be deemed to be given on the date of personal
delivery,  facsimile  transmission  or actual delivery of certified mail, or one
Business Day after delivery to an express  overnight  courier.  Unless otherwise
specified  in a notice sent or delivered in  accordance  with the terms  hereof,
notices and other communications in writing shall be given to the parties hereto
at their respective addresses set forth at the beginning of this Loan Agreement,
or, in the case of facsimile  transmission,  to the parties at their  respective
regular facsimile telephone number.

(d) Costs, Expenses and Taxes. Customer shall upon demand pay or reimburse MLBFS
for:  (i) all  Uniform  Commercial  Code and other  filing and  search  fees and
expenses  incurred by MLBFS in connection with the  verification,  perfection or
preservation  of  MLBFS'  rights  hereunder  or in the  Collateral  or any other
collateral for the Obligations; (ii) any and all stamp, transfer and other taxes
and fees payable or determined to be payable in connection  with the  execution,
delivery  and/or  recording  of this  Loan  Agreement  or any of the  Additional
Agreements; and (iii) all reasonable fees and out-of-pocket expenses (including,
but not limited to, reasonable fees and expenses of outside counsel) incurred by
MLBFS in connection  with the  collection of any sum payable  hereunder or under
any of the Additional Agreements not paid when due, the enforcement of this Loan
Agreement  or any of the  Additional  Agreements  and the  protection  of MLBFS'
rights hereunder or thereunder, excluding, however, salaries and normal overhead
attributable  to MLBFS'  employees.  The  obligations  of  Customer  under  this
paragraph shall survive the expiration or termination of this Loan Agreement and
the discharge of the other Obligations.

(e) Right to Perform Obligations.  If Customer shall fail to do any act or thing
which it has covenanted to do under this Loan Agreement or any representation or
warranty  on the part of  Customer  contained  in this Loan  Agreement  shall be
breached,  MLBFS may,  in its sole  discretion,  after 5 Business  Days  written
notice is sent to Customer (or such lesser  notice,  including no notice,  as is
reasonable  under  the  circumstances),  do the  same or  cause it to be done or
remedy any such breach,  and may expend its funds for such purpose.  Any and all
reasonable  amounts so expended by MLBFS shall be repayable to MLBFS by Customer
upon  demand,  with  interest  at the  Interest  Rate during the period from and
including the date funds are so expended by MLBFS to the date of repayment,  and
all such amounts shall be additional Obligations.  The payment or performance by
MLBFS of any of Customer's  obligations  hereunder shall not relieve Customer of
said  obligations or of the  consequences of having failed to pay or perform the
same, and shall not waive or be deemed a cure of any Default.

(f) Further  Assurances.  Customer agrees to do such further acts and things and
to execute  and deliver to MLBFS such  additional  agreements,  instruments  and
documents as MLBFS may  reasonably  require or deem  advisable to effectuate the
purposes  of this Loan  Agreement  or any of the  Additional  Agreements,  or to
establish,  perfect and maintain  MLBFS'  security  interests and liens upon the
Collateral, including, but not limited to: (i) executing financing statements or
amendments thereto when and as reasonably requested by MLBFS; and (ii) if in the
reasonable  judgment of MLBFS it is  required  by local law,  causing the owners
and/or mortgagees of the real property on which any Collateral may be located to
execute and deliver to MLBFS waivers or subordinations  reasonably  satisfactory
to MLBFS with respect to any rights in such Collateral.

(g) Binding Effect.  This Loan Agreement and the Additional  Agreements shall be
binding  upon,  and shall  inure to the  benefit  of MLBFS,  Customer  and their
respective  successors and assigns.  Customer shall not assign any of its rights
or  delegate  any of its  obligations  under this Loan  Agreement  or any of the
Additional  Agreements  without  the prior  written  consent  of  MLBFS.  Unless
otherwise  expressly  agreed to in a writing  signed by MLBFS,  no such  consent
shall in any event relieve  Customer of any of its  obligations  under this Loan
Agreement or any of the Additional Agreements.

(h) Headings. Captions and section and paragraph headings in this Loan Agreement
are  inserted  only as a  matter  of  convenience,  and  shall  not  affect  the
interpretation hereof.

(i) Governing Law. This Loan Agreement and, unless otherwise  expressly
provided  therein,  each of the Additional Agreements, shall be governed in all
 respects by the laws of the State of Illinois.

(j) Severability of Provisions.  Whenever possible,  each provision of this Loan
Agreement and the Additional  Agreements  shall be interpreted in such manner as
to be  effective  and valid under  applicable  law.  Any  provision of this Loan
Agreement  or  any  of  the  Additional   Agreements   which  is  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability  without invalidating
the remaining provisions of this Loan Agreement and the Additional Agreements or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.

(k) Term.  This Loan  Agreement  shall become  effective on the date accepted by
MLBFS at its office in  Chicago,  Illinois,  and,  subject to the terms  hereof,
shall continue in effect so long  thereafter as: (i) MLBFS shall be obligated to
make the Loan,  (ii) the WCMA Line of Credit  shall be in  effect,  (iii)  there
shall be any moneys  outstanding under this Loan Agreement,  or (iv) there shall
be any other Obligations outstanding.

(l)  Counterparts.   This  Loan  Agreement  may  be  executed  in  one  or  more
counterparts which, when taken together, constitute one and the same agreement.

(m)  Jurisdiction;  Waiver.  Customer  acknowledges  that this Loan Agreement is
being accepted by MLBFS in partial  consideration of MLBFS' right and option, in
its  sole  discretion,  to  enforce  this  Loan  Agreement  and  the  Additional
Agreements  in either the State of Illinois or in any other  jurisdiction  where
Customer or any collateral for the Obligations may be located. Customer consents
to jurisdiction in the State of Illinois and venue in any State or Federal Court
in the County of Cook for such purposes,  and Customer waives any and all rights
to contest said  jurisdiction  and venue.  Customer further waives any rights to
commence any action  against MLBFS in any  jurisdiction  except in the County of
Cook and State of Illinois.  MLBFS and Customer  hereby each expressly waive any
and all  rights to a trial by jury in any  action,  proceeding  or  counterclaim
brought BY either of the parties  against  the other  party with  respect to any
matter  relating to, arising out of or in any way connected with the Loan,  this
Loan Agreement,  any Additional  Agreements and/or any of the transactions which
are the subject matter of this Loan Agreement.

(n) Integration.  This Loan Agreement,  together with the Additional Agreements,
constitutes the entire understanding and represents the full and final agreement
between the parties with respect to the subject  matter  hereof,  and may not be
contradicted by evidence of prior written  agreements or prior,  contemporaneous
or  subsequent  oral  agreements  of the parties.  There are no  unwritten  oral
agreements of the parties. Without limiting the foregoing, Customer acknowledges
that: (i) no promise or commitment  has been made to it by MLBFS,  MLPF&S or any
of their respective employees, agents or representatives to make the Loan OR ANY
SUBSEQUENT  WCMA LOAN on any terms other than as expressly set forth herein,  or
to make any other loan or  otherwise  extend any other credit to Customer or any
other party; and (ii) except as otherwise  expressly provided herein,  this Loan
Agreement  supersedes and replaces any and all proposals,  letters of intent and
approval and commitment  letters from MLBFS to Customer,  none of which shall be
considered  an  Additional  Agreement.  No  amendment  or  modification  of this
Agreement or any of the Additional Agreements to which Customer is a party shall
be effective unless in a writing signed by both MLBFS and Customer.


<PAGE>


IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and year
first above written.

TELEBYTE TECHNOLOGY INC.

By: ___________________________________________________________________________
                  Signature (1)                      Signature (2)

-------------------------------------------------------------------------------
                  Printed Name                       Printed Name

-------------------------------------------------------------------------------
                  Title                              Title


Accepted at Chicago, Illinois:
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.

By:___________________________________________________________

<PAGE>

                                    EXHIBIT A

ATTACHED TO AND HEREBY MADE A PART OF WCMA REDUCING  REVOLVERsm LOAN AND
SECURITY  AGREEMENT NO. 839-07K51  BETWEEN MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC. AND TELEBYTE TECHNOLOGY INC.
================================================================================


Locations of Tangible Collateral:

              CLOSING CERTIFICATE

================================================================================

The undersigned,  TELEBYTE TECHNOLOGY INC., a corporation organized and existing
under the laws of the State of Nevada  ("Customer"),  as a primary inducement to
MERRILL  LYNCH  BUSINESS  FINANCIAL  SERVICES  INC.  ("MLBFS") to make a loan to
Customer (the "Loan") pursuant to that certain WCMA REDUCING REVOLVERsm LOAN AND
SECURITY  AGREEMENT No. 839-07K51 between Customer and MLBFS dated as of January
7, 1999 (the "Loan  Agreement")  DOES  HEREBY  REPRESENT,  WARRANT  AND AGREE AS
FOLLOWS:

1. All of Customer's  representations  and  warranties in the Loan Agreement are
true and correct and remade as of the date  hereof,  and,  without  limiting the
foregoing:  (i)  subject  only to  "Permitted  Liens"  (as  defined  in the Loan
Agreement),  MLBFS  has a first  lien  and  security  interest  upon  all of the
"Collateral"  under the Loan Agreement  (including  any  Collateral  financed or
refinanced with the proceeds of the Loan), and (ii) the Loan is being applied on
account of and will satisfy the "Loan Purpose" under the Loan Agreement.

2. There has not occurred any event which constitutes a "Default" under the Loan
Agreement.

3.  There has not  occurred  any  material  adverse  change in the  business  or
financial condition of Customer since the date of the last financial  statements
submitted to MLBFS.

4. MLBFS is hereby  authorized  and directed to disburse  the proceeds of the
Loan in the amount of  $1,000,000.00, by wire transfer as follows:

Into Merrill Lynch Account No. 839-07D64








Dated this ____ day of ___________________, 1999

TELEBYTE TECHNOLOGY INC.

By: ___________________________________________________________________________
                  Signature (1)                      Signature (2)

-------------------------------------------------------------------------------
                  Printed Name                       Printed Name

-------------------------------------------------------------------------------
                  Title                              Title
                                                        SECRETARY'S CERTIFICATE
================================================================================
The undersigned  hereby certifies to Merrill Lynch Business  Financial  Services
Inc.  that the  undersigned  is the duly  appointed  and  acting  Secretary  (or
Assistant  Secretary) of TELEBYTE TECHNOLOGY INC., a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada; and
that the following is a true,  accurate and compared  transcript of  resolutions
duly,  validly and lawfully adopted on the _______ day of  ____________________,
1999 by the Board of Directors of said Corporation acting in accordance with the
laws  of the  state  of  incorporation  and  the  charter  and  by-laws  of said
Corporation:

"RESOLVED,  that this Corporation is authorized and empowered, now and from time
to time hereafter,  to borrow and/or obtain credit from, and/or enter into other
financial  arrangements  with,  MERRILL LYNCH BUSINESS  FINANCIAL  SERVICES INC.
("MLBFS"),  and in  connection  therewith  to grant to MLBFS liens and  security
interests  on any or all  property  belonging  to  this  Corporation;  all  such
transactions  to be on such terms and conditions as may be mutually  agreed from
time to time between this Corporation and MLBFS; and

"FURTHER RESOLVED, that the President, any Vice President,  Treasurer, Secretary
or other officer of this Corporation, or any one or more of them, be and each of
them hereby is authorized  and empowered to: (a) execute and deliver to MLBFS on
behalf  of this  Corporation  any and all  loan  agreements,  promissory  notes,
security agreements, pledge agreements,  financing statements,  mortgages, deeds
of trust, leases and/or all other agreements, instruments and documents required
by  MLBFS  in  connection  therewith,  and any  present  or  future  extensions,
amendments,  supplements,  modifications and restatements  thereof;  all in such
form as any such officer shall approve, as conclusively  evidenced by his or her
signature thereon, and (b) do and perform all such acts and things deemed by any
such  officer  to be  necessary  or  advisable  to  carry  out and  perform  the
undertakings and agreements of this Corporation in connection therewith; and any
and all  prior  acts of each of said  officers  in  these  premises  are  hereby
ratified and confirmed in all respects; and

"FURTHER  RESOLVED,  that  MLBFS  is  authorized  to  rely  upon  the  foregoing
resolutions until it receives written notice of any change or revocation from an
authorized officer of this Corporation,  which change or revocation shall not in
any event  affect  the  obligations  of this  Corporation  with  respect  to any
transaction  conditionally  agreed  or  committed  to by  MLBFS  or  having  its
inception prior to the receipt of such notice by MLBFS."

The undersigned  further certifies that: (a) the foregoing  resolutions have not
been rescinded, modified or repealed in any manner, are not in conflict with any
agreement of said Corporation and are in full force and effect as of the date of
this Certificate, and (b) the following individuals are now the duly elected and
acting  officers of said  Corporation and the signatures set forth below are the
true signatures of said officers:

         President: ___________________________________________________________

         Vice President: ______________________________________________________

         Treasurer: ___________________________________________________________

         Secretary:____________________________________________________________

         -----------------: --------------------------------------------------
         Additional Title

IN WITNESS  WHEREOF,  the  undersigned  has executed  this  Certificate  and has
affixed the seal of said Corporation hereto, pursuant to due authorization,  all
as of this ________ day of _________________, 1999.

 (Corporate Seal)                           ___________________________________
                                                              Secretary

                               Printed Name:___________________________________