EXHIBIT 10.21

SOUTHTRUST                                            REVOLVING LOAN AGREEMENT
SOUTHTRUST BANK
ST CAP FUNDS(SERVICEMARK)

BORROWER:                           SECURED PARTY:

NOR'EASTER MICRO, INC.                          SouthTrust Bank
808 3RD AVENUE SOUTH                            Post Office Box 2554
NASHVILLE,       TENNESSEE  37210               Birmingham, Alabama 35290
City     County    State      Zip               Attn:   Asset Based Lending
                                                        Department



      This Agreement dated October ___, 2000 (the "Effective  Date") made by and
between  NOR'EASTER  MICRO,  INC.,  a  Florida   corporation   ("Borrower")  and
SOUTHTRUST  BANK,  an Alabama state  banking  corporation,  having its principal
place of business in Birmingham, Alabama ("Bank").

                                  WITNESSETH:

      That for valuable  consideration,  the receipt and sufficiency of which is
hereby  acknowledged,  and in  consideration of the mutual promises herein made,
Bank and  Borrower,  intending to be and being  legally  bound,  hereby agree as
follows:

                        ARTICLE I - THE REVOLVING LOAN

      SECTION 1.1. Bank hereby agrees to lend to Borrower,  and Borrower  hereby
agrees to borrow  from  Bank,  upon the terms and  conditions  set forth in this
Agreement,  the maximum  principal  sum of up to the lesser of One Million  Five
Hundred  Thousand  dollars  ($1,500,000)  (the  "Maximum  Loan  Amount")  or the
"Aggregate Loan Values"  (defined below in Section 1.2) (the "Revolving  Loan").
Borrower's obligation to repay the Revolving Loan and the interest thereon shall
be  evidenced  by  a  promissory   note  (the  "Note")  in  form  and  substance
satisfactory  to Bank.  Until the earlier of November  1, 2001,  (the  "Maturity
Date") or the occurrence of any Event of Default (as defined under Article VI of
this  Agreement),  or any event  that with  notice or the lapse of time or both,
would  become an Event of Default,  Borrower  may borrow  hereunder,  prepay the
principal  sum of such loans in whole or in part without  penalty,  and reborrow
hereunder,  so long as the aggregate unpaid principal balance of such loans does
not exceed the maximum  principal amount set forth in the preceding  sentence of
this Section 1.1.  Bank may require at any time that loans be made upon at least
one  banking  day's  notice to Bank.  Bank may  disburse  each loan by credit to
Borrower's  transaction  account with Bank, by check, or in such other manner as
Borrower and Bank may agree.  All interest  payable  hereunder or under the Note
shall be calculated based on a 360-day year (i.e., computed on the actual number
of days elapsed  over a year of 360 days unless  reference to a 365 or a 366-day
year is  necessary  in order not to exceed the  highest  rate  permitted  by any
applicable law).


<PAGE>



      SECTION 1.2.  Bank's  obligation to advance funds under the Revolving Loan
shall be limited to the lesser of the Maximum Loan Amount or the Aggregate  Loan
Values.  For purposes of this  Agreement,  the  "Aggregate  Loan  Values"  shall
consist  of the sum of the  Loan  Value  of  Accounts  and  the  Loan  Value  of
Inventory. For purposes of this Agreement,  Loan Value of Accounts shall mean an
amount no greater than  eighty-five  percent  (85%) of the Eligible  Accounts of
Borrower; and Loan Value of Inventory shall mean the lesser of 50% of Borrower's
Eligible  Inventory  or  $750,000.  With  respect  to  all  Accounts,   Borrower
represents  and  warrants  to Bank  that  Bank may rely,  in  determining  which
Accounts are Eligible Accounts,  on all statements and  representations  made by
Borrower with respect to any Account or Accounts.

      SECTION 1.3.  Borrower agrees to pay interest on the Revolving Loan at the
rate(s),  on the date(s),  and calculated by the method,  set forth in the Note.
Unless  payment is  required to be made  earlier  under the terms of the Note or
pursuant  to  Section  6.2 of this  Agreement  following  an Event  of  Default,
Borrower shall pay the unpaid principal balance of the Revolving Loan in full on
the Maturity Date.

      SECTION  1.4.  Borrower  shall  submit  a  Borrower's  report  in the form
prescribed by the Bank on the date of this Agreement and at least monthly (or at
Bank's request,  daily) thereafter during the term of this Agreement.  Bank may,
in its sole discretion,  require that each advance made under the Revolving Loan
be effected by  Borrower's  submitting  (and the Bank's  receiving) a Borrower's
report at least one Business Day prior to the date Borrower  desires the advance
to be made.  Bank shall,  if all the terms and provisions of this Agreement have
been met,  including,  without  limitation,  the  absence of an Event of Default
hereunder, make such advances. Each such Borrower's report shall be signed by an
officer or employee of Borrower  authorized by Borrower to execute such reports,
whose  name(s) shall be included in a  certificate  furnished to the Bank.  Each
request for a loan or advance made by Borrower pursuant to this Agreement or any
of the other Loan Documents shall constitute (i) an automatic representation and
warranty by Borrower to Bank that there does not then exist any default or Event
of Default and (ii) a  reaffirmation  as of the date of said request that all of
the  representations  and warranties of Borrower contained in this Agreement and
the other  Loan  Documents  are true in all  material  respects  except  for any
changes in the nature of Borrower's business or operations that would render the
information  contained  in any exhibit  attached  hereto  either  inaccurate  or
incomplete,  so long as Bank has  consented  to such changes or such changes are
expressly permitted by this Agreement.

      SECTION  1.5.  Borrower  shall pay to Bank an annual  facility  fee in the
amount of $3,750.00 upon closing of the Revolving  Loan and on each  anniversary
date of the closing (the "Facility Fee"), which fee shall be deemed fully earned
at  the  closing  of  the  transactions   contemplated  hereby,  shall  be  paid
concurrently  with the initial Loan hereunder and shall not be subject to rebate
except  as may be  required  by any  applicable  law.  The  Facility  Fee  shall
compensate  Bank for the costs  associated  with the  origination,  structuring,
processing,  approving  and  closing of the  transactions  contemplated  by this
Agreement,  including,  but not limited to, administrative and general overhead,
but not including any  out-of-pocket  or other  expenses for which  Borrower has
agreed to reimburse  Bank pursuant to any other  provisions of this Agreement or
any of the Loan Documents

      SECTION  1.6.  During  the term of this  Agreement  and for so long as any
portion  of the  Loan  shall  be  outstanding,  Borrower  shall  pay to  Bank an
administrative  fee (the  "Administrative  Fee") in the  amount of  $500.00  per
month.  The charge due pursuant to the terms of this paragraph  shall be payable
monthly,  in arrears.  The  Administrative Fee shall be in addition to all other
charges, interest and fees under this Agreement and shall act to compensate Bank
in part for the costs of  administering  the Loan  account  and  other  services
provided by Bank.




                                       2                     __________ initials
<PAGE>

      SECTION 1.7.  From and after the  occurrence  of an Event of Default,  the
Revolving  Loan shall bear  interest at a per annum rate of four percent (4%) in
excess of the rate  provided  for in the Note  (the  "Default  Rate").  Borrower
acknowledges  and agrees that the provisions  herein and in the Note relating to
the Default Rate represent a fair and  reasonable  estimate by Borrower and Bank
of a fair average compensation for the loss that may be sustained by Bank due to
the failure of Borrower to make timely  payments with respect to the Obligations
and for the cost and  expenses  that may be  incurred  by Bank by  reason of the
occurrence  of an Event of  Default,  the parties  recognizing  that the damages
caused by such  extra  administrative  expenses  and loss of the use of funds is
impracticable or extremely  difficult to ascertain or estimate.  Interest at the
Default  Rate shall be paid  without  prejudice to the rights of Bank to collect
any other amounts provided to be paid hereunder.

      SECTION  1.8.  Borrower  shall  have no right to prepay  the  indebtedness
represented  hereby except for periodic  repayments not resulting in termination
of the  agreement  which  arise  out of  application  of  funds  in the  Special
Collection  account  provided  for in Section  1.10 or except as  provided  in a
separate writing executed by Bank.

      SECTION  1.9.  The  Revolving  Loan  shall in any  event be fully  due and
payable upon the Maturity Date. TIME IS OF THE ESSENCE OF THIS AGREEMENT.

      SECTION  1.10.  Borrower  shall  open a special  collection  account  (the
"Special  Collection  Account")  with Bank,  or with another bank  designated by
Bank,  in which all funds  received  by  Borrower  from any  source  whatsoever,
including,  without  limitation,  funds  received from sales of  Inventory,  all
refunds of taxes,  all  remittances  by Borrower's  Account  Debtors,  insurance
proceeds, all bank wire transfers from Borrower's Account Debtors, and all other
proceeds  of  Collateral,  shall be  deposited  no later  than the next  regular
banking day following  receipt thereof.  The Bank shall have the exclusive right
to  withdraw or debit funds from the  Special  Collection  Account  which may be
accomplished  by any directive  signed by any authorized  representative  of the
Bank. On a daily basis, the Collected Balance in the Special  Collection Account
shall be  withdrawn  by Bank and  applied to the  Revolving  Loan,  or, upon the
occurrence of an Event of Default,  to the other Loans. If any Borrower's report
shall show  insufficient  Aggregate Loan Values to entitle  Borrower to maintain
the then current  balance owing under the Revolving Loan after applying  thereto
the Collected  Balance of the Special  Collection  Account,  then Borrower shall
immediately  deposit into the Special Collection Account sufficient  immediately
available  funds  from  which  Bank may draw in order to  reduce  the  principal
balance of the Revolving  Loan to the amount  allowable  under the provisions of
this  Agreement.  At the request of the Bank,  Borrower shall execute  documents
provided by the Bank to allow officers or authorized representatives of the Bank
to sign checks drawn on accounts of Borrower  maintained  in other banks for the
purpose of transferring funds representing  proceeds of Collateral to an account
or  accounts  of  Borrower  maintained  with the Bank or  another  bank owned by
SouthTrust Corporation,  including,  without limitation,  the Special Collection
Account.  At its option,  Bank may give  Borrower  immediate  credit for amounts
deposited into the Special  Collection  Account and charge Borrower on a monthly
basis  for  interest  on the  difference  between  the  Ledger  Balance  and the
Collected  Balance  for the  period of time from the date of  deposit  until the
funds are collected.  "Collected  Balance" shall mean the book balance in a bank
account,  minus the aggregate amount of all checks and other items of payment in
the process of  collection,  said amount to be computed in  accordance  with the
Bank's standard practices.  "Ledger Balance" shall mean the balance reflected on
the  books  of the  Bank of the  amounts  deposited  in the  Special  Collection
Account.  In addition  to the  foregoing  charges,  Bank shall  charge  Borrower
customer demand deposit  account  charges,  including,  but not limited to, item
charges,  bank wire charges,  lock box charges,  stop payment  charges and other
charges associated with demand deposit accounts used in financings of this kind.




                                       3                     __________ initials
<PAGE>

      SECTION  1.11.  Borrower  shall have no right to prepay  the  indebtedness
represented  hereby  (i)  except  for  periodic   repayments  not  resulting  in
termination  of the  agreement  which arise out of  application  of funds in the
Special  Collection  Account  provided  for in Section  1.10 and (ii) except for
prepayment  accompanied  by  termination  of the  Agreement in  accordance  with
Section below 1.12 and accompanied by the Termination Fees provided for therein.

      SECTION 1.12.  This  Agreement  shall remain in force and effect until the
Loan and the  Obligations,  and any  renewals or  extensions,  and all  interest
thereon  and costs  provided  for herein with regard to either of them have been
indefeasibly  paid or  satisfied  in full and  until  the  Bank  has no  further
obligation to advance funds to the Borrower hereunder.  Subject to the foregoing
sentence, Borrower shall have the right to terminate this Agreement prior to the
Maturity Date upon payment of all outstanding  principal,  accrued  interest and
other charges owing under the terms of this Agreement  accompanied by payment of
a Termination Fee as follows:  (i) If termination,  or if any portion is prepaid
from the loan  proceeds  of  another  lender  to  Borrower  occurs  on or before
November 1, 2001,  Borrower shall pay to Bank a termination fee in the amount of
$15,000; (ii) if termination occurs on or after November 1, 2001, there shall be
no termination  fee. The indemnities  provided for in Section 8.10 shall survive
the payment in full of the Loan and the  Obligations and the termination of this
Agreement. Any termination will be evidenced by a termination letter executed by
Borrower which shall include such indemnifications and releases in favor of Bank
as shall be required by Bank.

      SECTION  1.13.  All sums paid to the Bank by Borrower  hereunder  shall be
paid  directly  to the Bank in  immediately  available  funds no later than 2:00
P.M.,  Birmingham,  Alabama time on the date on which payment is due,  except if
such date is not a  Business  Day such  payment  shall  then be due on the first
Business Day after such date,  but interest  shall  continue to accrue until the
date  payment is  received.  Any payment  received  after 2:00 p.m.  Birmingham,
Alabama, time shall be deemed to have been received on the immediately following
Business Day for all purposes,  including,  without  limitation,  the accrual of
interest on principal.  The Bank shall send  Borrower  statements of all amounts
due hereunder,  which  statements  shall be considered  correct and conclusively
binding on the Borrower  unless the  Borrower  notifies the Bank to the contrary
within  ten  (10)  days of its  receipt  of any  statement  which it deems to be
incorrect. The Bank may, in its sole discretion,  (a) charge against any deposit
account  of the  Borrower  all or any  part of any  amount  due  hereunder,  any
advances made by Bank to protect the Collateral, and any commitment or servicing
fee due the Bank,  and (b) advance to  Borrower,  and charge to the Loan,  a sum
sufficient  each  month  to pay all  interest  accrued  on the Loan and fees and
expenses  due under this  Agreement,  any  advances  made by Bank to protect the
Collateral,  and any commitment or servicing fee due the Bank, during or for the
immediately preceding month or any month prior. Borrower shall be deemed to have
requested an advance  under the Loan upon the  occurrence of an overdraft in any
of Borrower's  checking accounts  maintained with the Bank or another bank owned
by SouthTrust Corporation.

      SECTION  1.14.  Borrower  irrevocably  waives  the  right  to  direct  the
application  of any  and all  payments  and  collections  at any  time or  times
hereafter  received  by Bank from or on behalf  of  Borrower  or from any of the
Collateral,  and Borrower does hereby irrevocably agree that Bank shall have the
continuing  exclusive right to apply such payments and  collections  received at
any time or times  hereafter by Bank or its agent  against the  Obligations,  in
such manner as Bank may deem advisable,  notwithstanding  any entry by Bank upon
any of its books and records. If as the result of collections of Accounts or for
any other  reason,  a credit  balance  exists in the Loan  Account,  such credit
balance shall not accrue interest in favor of Borrower but shall be available to
Borrower at any time or times for so long as no Event of Default exists.

                            ARTICLE II - COLLATERAL




                                       4                     __________ initials
<PAGE>

      SECTION  2.1.  The  repayment  by Borrower of the  indebtedness  under the
Revolving Loan and the Note, and the performance by Borrower of the Obligations,
are and shall be secured by every mortgage, deed of trust,  assignment,  pledge,
deed to secure debt and security  agreement  (whether one or more, the "Separate
Agreements")  which secures an obligation so defined as to include the Revolving
Loan or the Note  (including,  without  limitation,  those  Separate  Agreements
described  below),  and by all  property of  Borrower  now or  hereafter  in the
possession, control or custody of Bank (in which property Borrower hereby grants
Bank a security interest to secure such indebtedness and obligations) and by all
property in which Bank has or hereafter acquires a lien,  security interest,  or
other right,  including,  without  limitation,  the property described below (in
which property  Borrower  hereby grants Bank a security  interest to secure such
indebtedness and obligations) [describe property and Separate Agreements]:

      1. Security Agreement between Borrower and Bank dated  ______________,  or
if no date is listed, bearing even date herewith (the "Security Agreement").

      2. Loan  Agreement  dated October 28, 1999, as amended,  between  European
Micro Holdings,  Inc., a Nevada  corporation,  American Micro Computers Centers,
Inc., a Florida  corporation,  Nor-easter Micro,  Inc., a Nevada corporation and
SouthTrust Bank, and all "Security Instruments" referenced therein.

      3. Guaranty  Agreements  bearing even date  herewith  executed by Harry D.
Shields and John B. Gallagher (the "Guaranty Agreements").

      4. Agreement to Maintain Liquid Assets bearing even date herewith executed
by Harry D. Shields (the "Liquidity Agreement").

      5.  All  existing  and  future  security  agreements,  pledge  agreements,
mortgages,  deeds of trust, collateral  assignments,  and other similar security
instruments  executed  by  Borrower  or any  Affiliate  of  Borrower,  including
Nor'easter  Micro,  Inc., a corporation,  and European Micro  Holdings,  Inc., a
corporation.

The Separate Agreements are hereby  incorporated  herein by this reference.  The
property  described above and the property described in every Separate Agreement
is  individually  and  collectively   referred  to  in  this  Agreement  as  the
"Collateral".

      SECTION 2.2.  Borrower  shall  execute and  deliver,  or shall cause to be
executed and delivered,  such  documents  relating to the Collateral as Bank may
from time to time request.

                                 ARTICLE III -
             REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT

      Borrower represents and warrants to Bank that:

      SECTION 3.1. Borrower is a Nevada  corporation duly organized and existing
under  the  laws of the  State  of  Nevada,  County  of  ______________,  and is
qualified to do business in New  Hampshire,  Tennessee,  and  _________________,
that Borrower's  Federal Taxpayer  Identification  Number is 65-0804000 and that
Borrower is qualified to do business in all  jurisdictions  in which it conducts
its business. Borrower's principal place of business is at 808 3rd Avenue South,
Nashville,  Tennessee 37210.  Borrower has not changed its name or been known by
any other  name  within  the last  five (5) years nor has it been the  surviving
corporation in a merger  effected  within the last five (5)years.  Borrower does
not now use nor has it ever used any trade or fictitious  name in the conduct of
its business.




                                       5                     __________ initials
<PAGE>

      SECTION  3.2.  The   execution  and  delivery  of  Borrower  of,  and  the
performance by Borrower of its obligations  under, this Agreement,  the Note and
the Separate Agreements have been duly authorized by all requisite action on the
part of Borrower and do not and will not (i) violate any provision of Borrower's
articles of incorporation,  by-laws, or other organizational  documents, any law
or any judgment, order or ruling of any court or governmental agency, or (ii) be
in conflict  with,  result in a breach of, or  constitute,  following  notice or
lapse of time or  both,  a  default  under  any  indenture,  agreement  or other
instrument  to which  Borrower  is a party or by  which  Borrower  or any of its
property is bound.

      SECTION 3.3. Each of this  Agreement and the Note is the legal,  valid and
binding  agreement of Borrower  enforceable  against Borrower in accordance with
its terms.

      SECTION  3.4.  Except  for the case of BIG BLUE  EUROPE AND JEFF AND MARIE
ALNWICK  V.  EUROPEAN  MICRO  HOLDINGS,   INC.,   Borrower's  parent,  Case  No.
99-CV-7380,  United States Court for the Eastern District of New York, (the "Big
Blue  Litigation"),  there are no pending or threatened  actions or  proceedings
before any court or administrative or governmental agency that may, individually
or collectively, adversely affect the financial condition or business operations
of Borrower.

      SECTION 3.5. All financial  statements of Borrower previously delivered by
Borrower to Bank fairly and  accurately  presents  the  financial  condition  of
Borrower as of such date and has been  prepared  in  accordance  with  generally
accepted  accounting  principles  consistently  applied or, if not so  prepared,
setting  forth  the  manner  in which  such  financial  statement  departs  from
generally  accepted  accounting  principles.  Since  the date of said  financial
statements, there has been no material adverse change in the financial condition
of  Borrower,  and,  after due  inquiry,  there  exists no  material  contingent
liability or obligation assertable against Borrower.

      SECTION 3.6. All federal, state and other tax returns of Borrower required
by law to be filed have been completed in full and have been duly filed, and all
taxes,  assessments and withholdings shown on such returns or billed to Borrower
have been paid, and Borrower maintains adequate reserves and accruals in respect
of all such federal, state and other taxes, assessments and withholdings.  There
are  no  unpaid   assessments   pending  against   Borrower  for  any  taxes  or
withholdings, and Borrower knows of no basis therefor.

      SECTION 3.7.  Borrower has no  subsidiaries.  Borrower is not a partner or
joint venturer with any other Person or a participant in any business enterprise
other than its own for which it is generally liable,  nor does Borrower have any
contingent  liabilities  of any  description  other  than  as  indicated  in the
financial statements  heretofore delivered to Bank. Borrower is not obligated as
guarantor, surety or indemnitor under any indemnity, guaranty, surety or similar
bond or other contract  issued or entered into any agreement to assure  payment,
performance or completion of performance of any undertaking or obligation of any
Person,  except that Borrower has guaranteed certain indebtedness of its parent,
European Micro Holdings,  Inc., to Bank. No  authorization  or approval or other
action  by,  and no notice to or  filing  with,  any  federal,  state,  or local
government  body,  agency,  or  authority  is  required  for the due  execution,
delivery, and performance by Borrower of this Agreement, the Note, or any of the
Separate Agreements.

      SECTION 3.8.  Borrower  possesses  all permits,  memberships,  franchises,
contracts,   licenses,   trademark  rights,  trade  names,  patents,  and  other
authorizations  necessary to enable it to conduct its business operations as now
conducted, and no filing with, and no consent, permission,  authorization, order
or license of, any individual, entity, or governmental authority is necessary in
connection  with the  execution,  delivery,  performance  or enforcement of this
Agreement or the Note.



                                       6                     __________ initials
<PAGE>

      SECTION 3.9. No event has occurred  and is  continuing  which is, or which
with the giving of notice or lapse of time or both would be, an Event of Default
(as defined in Article VI) of this Agreement.

      SECTION  3.10.  Borrower  has  good  and  marketable  title  to all of its
properties  and assets  including,  without  limitation,  the Collateral and the
properties  and assets  reflected  in the  financial  statements  referenced  in
Section 3.5.

      SECTION 3.11. The minimum funding standards of Section 302 of the Employee
Retirement  Income  Security Act of 1974, as amended  ("ERISA") have been met at
all times with respect to all "plans" of Borrower to which such standards apply;
Borrower has not made a "partial withdrawal" or a "complete withdrawal" from any
"multi-employer plan"; and no "reportable event" or "prohibited transaction" has
occurred with respect to any such "plan" (as all of the quoted terms are defined
in ERISA).

      SECTION 3.12. Except as otherwise  expressly disclosed by Borrower to Bank
in writing on the date of this Agreement: No "hazardous substance" (as that term
is  defined  in  Section  101  of  the  Comprehensive   Environmental  Response,
Compensation  and  Liability  Act of  1980,  as  amended  ["CERCLA"])  has  been
released,  discharged,  disposed  of, or stored  on any of  Borrower's  owned or
leased real or personal  property by  Borrower,  by any third  party,  or by any
predecessor  in interest or title to Borrower;  Borrower  and all of  Borrower's
properties  are in  compliance  with all  applicable  local,  state and  federal
environmental laws and regulations; no notice has been served on Borrower by any
governmental  authority or any  individual or entity  claiming  violation of any
environmental  protection law or regulation,  or demanding  compliance  with any
environmental protection law or regulation, or demanding payment,  indemnity, or
contribution for any  environmental  damage or injury to natural  resources;  no
"hazardous  substance"  (as defined in CERCLA) is produced or used in Borrower's
business;  and no  improvement  on any real property owned or leased by Borrower
contains any asbestos,  including,  without  limitation,  asbestos insulation on
ceilings, piping or structural members or supports.

      SECTION 3.13. All Inventory has been produced,  and during the term hereof
will be produced,  in compliance with the requirements of the Federal Fair Labor
Standards Act. No Inventory is now, nor shall any Inventory at any time or times
hereafter be, stored with a bailee, warehouseman or similar party.

      SECTION  3.14.  Borrower  is  not  engaged  in  any  activity  that  might
constitute a pattern of racketeering activity or in any other conduct that might
subject all or a material portion of Borrower's assets to forfeiture.

      SECTION 3.15. All information furnished by Borrower to the Bank concerning
the Borrower,  its financial  condition,  the  Collateral,  or otherwise for the
purpose of obtaining  credit or an  extension  of credit,  is, or will be at the
time the same is  furnished,  accurate and correct in all material  respects and
complete  insofar as  completeness  may be necessary to give the Bank a true and
accurate knowledge of the subject matter.

      SECTION  3.16.  Bank shall not be obligated to make any advance  under the
Revolving  Loan until  Borrower  shall have  furnished  to Bank,  at  Borrower's
expense, such evidence as Bank from time to time may require regarding the truth
or continued truth of the foregoing  representations and warranties,  including,
without limitation,  opinions of Borrower's outside legal counsel,  opinions and
certificates of Borrower's  independent  certified public accountants,  surveys,
appraisals,  environmental audits by qualified  environmental engineers selected
by  Bank,  report  of  other  independent  consultants  selected  by  Bank,  and
certificates  of  Borrower's  officers.  All such  evidence  must be in form and
content satisfactory to Bank.



                                       7                     __________ initials
<PAGE>

      SECTION 3.17. No Collateral or other  property or interests of Borrower is
or shall  be  located  at any  place  other  than as set  forth in the  Security
Agreement.

                      ARTICLE IV - AFFIRMATIVE COVENANTS

      Borrower  covenants  and agrees that,  so long as it may borrow under this
Agreement or so long as any indebtedness remains outstanding under the Revolving
Loan or under the Note, Borrower shall:

      SECTION  4.1.  Deliver  to Bank (i)  within 30 days  after  each  month an
unaudited financial statement including a balance sheet and statements of income
and cash flows,  certified by  Borrower's  chief  executive  or chief  financial
officer to be correct  and  complete,  (ii) within 90 days after the end of each
fiscal year a financial  statement  including a balance  sheet of Borrower as of
the end of such year and statements of income,  cash flows and changes in equity
for such year,  setting forth in each case in comparative form the corresponding
figures  for  the  previous  year,  together  with  accompanying  schedules  and
footnotes, certified or compiled (at Bank's election) by the present independent
certified  public  accountants  of  Borrower or by another  firm of  independent
certified  public  accountants  designated by Borrower which is  satisfactory to
Bank,  such  financial  statement to be prepared in  accordance  with  generally
accepted accounting principles applied in a manner consistent with the financial
statements  previously  furnished to Bank, or if not so prepared,  setting forth
the manner in which such financial  statement  departs from  generally  accepted
accounting principles or from previous financial statements furnished to Bank by
Borrower,  and  (iii)  with  reasonable   promptness,   such  other  information
(including  limitation,  copies of tax returns and  amendments  thereto filed by
Borrower)  as  Bank  may  request.   Each  said  financial  statement  shall  be
accompanied by a Compliance Certificate in the form set forth in Exhibit "B".

      SECTION  4.2.  Furnish the Bank with a copy of each letter  written to the
Borrower by its independent  certified  public  accountant  concerning  internal
controls and management review immediately upon receipt of same and any comments
made by the  Borrower  with  respect  thereto  and  permit  Bank to  communicate
directly with said accountants and with Borrower's insurance representatives and
agents regarding the financial affairs and condition of Borrower,  the books and
records of Borrower, and insurance matters pertaining to Borrower's business.

      SECTION 4.3.  Maintain its books,  accounts and records in accordance with
generally accepted accounting principles or, if not so maintained, setting forth
the manner in which such  books,  accounts  and records  depart  from  generally
accepted  accounting  principles,  applied  in  a  manner  consistent  with  the
financial  statements  previously  furnished  to the Bank,  and shall permit any
person or entity  designated  in writing by Bank to visit and inspect any of its
properties,  books and financial  records,  and to make copies  thereof and take
extracts therefrom,  and to discuss Borrower's financial affairs with Borrower's
financial officers and accountants.

      SECTION 4.4. Pay and discharge all taxes, assessments,  fees, withholdings
and other governmental charges or levies imposed upon it, or upon its income and
profits,  or upon  any  property  belonging  to it,  prior  to the date on which
penalties  attach  thereto,  unless the legality  thereof  shall be promptly and
actively contested in good faith by appropriate proceedings, and unless adequate
reserves for such liability are maintained by Borrower pending  determination of
such contest.

      SECTION 4.5.  Maintain its  existence in good standing in the state of its
organization or  incorporation  and its  qualification  and good standing in all
jurisdictions  where such  qualification  is required under  applicable law, and


                                       8                     __________ initials
<PAGE>

conduct its business in the manner in which it is now conducted  subject only to
changes made in the ordinary course of business.

      SECTION  4.6.  Promptly  notify Bank in writing of the  occurrence  of any
Event of  Default  or an event  that  with  notice of the lapse of time or both,
would  become an Event of Default or of any  pending  or  threatened  litigation
claiming damages in excess of $10,000 or seeking relief that, if granted,  would
adversely affect the financial condition or business operations of Borrower.

      SECTION  4.7.  Maintain  and keep in force at all times  insurance  of the
types and in the amounts  customarily  carried in lines of  business  similar to
Borrower's  and such other  insurance  as Bank may require,  including,  without
limitation,  fire, public  liability,  casualty,  property damage,  wind damage,
flood damage,  and worker's  compensation  insurance,  which  insurance shall be
carried with  companies and in amounts  satisfactory  to Bank.  All casualty and
property  damage  insurance  shall  name Bank as  mortgagee  or loss  payee,  as
appropriate, and shall provide for a minimum of ten (10) days' written notice to
Bank before cancellation or amendment.  Borrower shall deliver to Bank from time
to time at Bank's request copies of all such insurance policies and certificates
of insurance and schedules setting forth all insurance then in effect.  Borrower
hereby  appoints  Bank  the   attorney-in-fact  for  Borrower  for  purposes  of
obtaining,  adjusting,  settling,  and canceling such insurance and endorsing in
Borrower's  name and giving  receipt for checks and drafts  issued in payment of
losses and as returned premiums.  Borrower hereby assigns all insurance policies
at any time covering  property that is Collateral  for the Note and all returned
and unearned premiums thereon to Bank as additional Collateral for the Note.

      SECTION 4.8. Keep all of its properties in good repair and condition,  and
from time to time make necessary repairs,  renewals and replacements  thereto so
that  Borrower's   property  shall  be  fully  and  efficiently   preserved  and
maintained.

      SECTION 4.9.  Perform or take,  on request of Bank,  such action as may be
necessary  or  advisable  to  perfect  any  lien  or  security  interest  in the
Collateral or otherwise to carry out the intent of this Agreement.

      SECTION  4.10.  Pay or  reimburse  Bank on  demand  for any  out-of-pocket
expenses, including reasonable attorneys' fees, incurred by Bank in preparing or
enforcing this Agreement, the Note, and the Separate Agreements, or in preparing
or enforcing any amendment thereto,  or in collecting the Revolving Loan and any
other sum due under the Note or this Agreement  after default by Borrower in the
payment thereof.

      SECTION  4.11.  Fund all of its  "plans"  to  which  the  minimum  funding
standards  of Section  302 of ERISA  apply in  accordance  with such  standards;
furnish  Bank,  promptly  upon  Bank's  request,  copies of all reports or other
statements filed with, or received from, the United States  Department of Labor,
the Internal Revenue Service,  or the Pension Benefit Guaranty  Corporation with
respect to all of Borrower's "plans"; and promptly advise Bank of the occurrence
of any "reportable  event" or "prohibited  transaction" with respect to any such
"plan" (as all of the quoted terms are defined in ERISA).

      SECTION 4.12. Comply with all applicable  present and future local,  state
and federal laws and  regulations  having  application  to the Borrower,  to the
Borrower's business or property, or to any of the Collateral, including, without
limitation,  all  environmental  protection or clean-up laws and regulations and
all laws and  regulations  providing  protection  to persons with  disabilities;
notify Bank  immediately if any "hazardous  substance" (as defined in CERCLA) is
released, discharged, disposed of, stored, or discovered on any real or personal
property  owned or leased by Borrower;  notify Bank in writing within three days
after Borrower receives notice from any governmental authority or any individual
or entity claiming violation of any environmental  protection law or regulation,


                                       9                     __________ initials
<PAGE>

or demanding compliance with any environmental protection law or regulation,  or
demanding payment,  indemnity,  or contribution for any environmental  damage or
injury to  natural  resources;  and  permit  Bank  from time to time to  observe
Borrower's  operations  and to perform  tests  (including  soil tests and ground
water tests) for "hazardous  substances" on any real or personal  property owned
or leased by Borrower.

      SECTION 4.13. Use the proceeds of the Revolving Loan only for repayment of
existing  working  capital  indebtedness  existing  as  of  Effective  Date  and
thereafter for working capital purposes.

      SECTION  4.14.  Furnish to Bank at least  weekly (and more  frequently  if
requested  by Bank) a detailed  accounts  receivable  aging  report,  a detailed
accounts  payable  aging  report,  and an  inventory  report,  all in  form  and
substance,  and containing such detail and  information,  as Bank shall request,
and furnish to Bank copies of all physical  inventory  listings when prepared by
Borrower.

      SECTION  4.15.  Diligently  pursue  collection  of all  Accounts and other
amounts due Borrower by others, including Affiliates of Borrower.

      SECTION 4.16.  Provide Bank with a debt subordination  agreement,  in form
and substance  satisfactory to Bank,  executed by Borrower and any Person who is
an officer,  director,  shareholder,  partner,  member,  owner or  Affiliate  of
Borrower to whom Borrower is or hereafter  becomes  indebted,  subordinating  in
right of payment  and claim all of Debt owed by  Borrower to any said Person and
any future advances thereon to the full and final payment of the Obligations.

      SECTION 4.17. [reserved]


                        ARTICLE V - NEGATIVE COVENANTS

      Borrower  covenants and agrees that,  without the prior written consent of
Bank,  so  long  as it  may  borrow  under  this  Agreement  or so  long  as any
indebtedness  remains  outstanding  under the Revolving  Loan or under the Note,
Borrower shall not:

      SECTION 5.1. [reserved]

      SECTION 5.2. Create, incur, assume, or suffer to exist any indebtedness of
any description whatsoever not existing as of the date of this Agreement, except
(i) indebtedness incurred under this Agreement,  and (ii) any trade indebtedness
incurred  in the  ordinary  course  of  business  payable  within 60 days of its
incurrence.

      SECTION  5.3.  Merge,  consolidate  or enter into a  partnership  or joint
venture with any other person or entity; or sell,  lease,  transfer or otherwise
dispose  of all or any  substantial  portion  of its  assets,  except  sales  of
inventory in the ordinary course of business;  or change its name; or change the
location of its chief executive office or principal place of business.

      SECTION 5.4. Guarantee or become contingently liable for any obligation or
indebtedness  of any other  person or entity,  except that  Borrower may endorse
negotiable instruments for collection in the ordinary course of business.

      SECTION  5.5.  Make any loans,  advances  or  extensions  of credit to any
person or entity.



                                       10                    __________ initials
<PAGE>

      SECTION 5.6. Pay or declare any dividend on any of its capital stock after
the date hereof, provided, however, that if Borrower is an S Corporation, it may
pay  dividends  not  to  exceed  the  amount  of  income  taxes  payable  by its
shareholders attributable to Borrower's income.

      SECTION  5.7.  Grant any lien on or  security  interest  in, or  otherwise
encumber,  any of its properties or assets including,  without  limitation,  the
Collateral, and, except for liens for taxes not yet due and payable or which are
being actively contested in good faith by appropriate  proceedings and for which
adequate  reserves are being maintained by Borrower and those liens disclosed to
Bank by Borrower in writing prior to the execution of this  Agreement,  Borrower
shall not permit to exist any lien,  security  interest or other  encumbrance on
any of its properties or assets.

      SECTION 5.8.  Take, or fail to take, any act if such act or failure to act
results in the imposition of withdrawal liability under Title IV of ERISA.

      SECTION 5.9. Release, discharge,  dispose of, store, accept or receive for
storage  or  disposal,  or allow to be stored or  disposed  of,  any  "hazardous
substance"  (as defined in CERCLA) on or in any real or personal  property owned
or leased by  Borrower,  except as otherwise  expressly  consented to by Bank in
writing; or release,  discharge,  use,  transport,  or dispose of any "hazardous
substance" in an unlawful manner.

      SECTION 5.10. Purchase,  acquire or lease property from, or sell, transfer
or lease any inventory,  materials, goods, equipment, assets, rights or property
to, any  Affiliate of  Borrower,  except in the  ordinary  course of  Borrower's
business  and under terms and  conditions  which  would  apply if  disinterested
parties were involved.

      SECTION 5.11.  Change the locations at which the Collateral is maintained;
change the name, identity, or corporate structure of Borrower; adopt or make use
of any fictitious or trade name not disclosed  elsewhere in this  Agreement;  or
change the location of its chief executive office.

      SECTION  5.12.  Enter into any merger or  consolidation  or acquire all or
substantially  all of the assets of any Person;  or sell,  lease,  or  otherwise
dispose of any of its assets in an aggregate amount exceeding $50,000 during any
fiscal year,  except sales in the ordinary  course of its business;  purchase or
acquire the obligations or stock of or any other interest in any Person,  except
direct obligations of the United States of America or certificates of deposit or
other investments issued by the Bank or by any bank designated in writing by the
Bank;  enter  into any sale  and  lease-back  arrangement,  either  directly  or
indirectly;  hereafter  create any  Subsidiary  or divest itself of any material
assets by transferring them to any Subsidiary;  transfer, sell, pledge, encumber
or otherwise  assign any shares of stock or other  interest in any Subsidiary or
permit any Subsidiary to sell or otherwise  dispose of all or substantially  all
of its assets;  or become or agree to become a general or limited partner in any
general or limited partnership or a joint venturer in any joint venture.

      SECTION 5.13. Prepay any Debt except Debt to the Bank; provided,  however,
the Borrower may take ordinary trade discounts on purchases made in the ordinary
course of business.

      SECTION  5.14.  Enter  into any sale and  lease-back  arrangement,  either
directly or indirectly.

      SECTION  5.15.  Increase the salary and fringe  benefits of any officer or
director  or  shareholder  or  any  Affiliate  of any  officer  or  director  or
shareholder  of  Borrower by more than _____% in any fiscal year from the amount
paid in the previous fiscal year.



                                      11                     __________ initials
<PAGE>

      SECTION 5.16.  Deposit  proceeds of the Collateral  into any account other
than the Special Collection Account.

      SECTION 5.17.  Make any payment  (principal  or interest)  with respect to
Subordinated  Debt, or with respect to any Debt that would be Subordinated  Debt
but for the absence of a subordination agreement in effect with respect thereto,
if the making of such payment or the financial condition of Borrower immediately
after said payment would violate the financial  covenants  contained in the Loan
Agreement dated October 28, 1999, as amended,  between  European Micro Holdings,
Inc., a Nevada  corporation,  American Micro Computers Centers,  Inc., a Florida
corporation,  Nor'easter Micro,  Inc., a Nevada corporation and SouthTrust Bank,
except that  Borrower  shall be entitled to make  payments  with respect to such
Debt to the  extent  provided  in any  subordination  agreement  in effect  with
respect  thereto,  but only  during  such time as no default or Event of Default
exists hereunder.

      SECTION  5.18.  Enter into any  transaction,  or permit any  Subsidiary to
enter  into any  transaction,  which  materially  and  adversely  affects or may
materially and adversely  affect the  Collateral or Borrower's  ability to repay
the  Obligations  or permit or agree to any material  extension,  compromise  or
settlement or make any change or modification of any kind or nature with respect
to any  Account,  including  any of  the  terms  relating  thereto,  other  than
discounts and allowances in the ordinary course of business.

                  ARTICLE VI - EVENTS OF DEFAULT AND REMEDIES

      SECTION 6.1. Any one or more of the following shall constitute an Event of
Default hereunder by Borrower:

      (a)    Failure to pay when due any payment of principal or interest due on
             the Note or any fee, expense, other sum due hereunder; or

      (b)   Failure to pay when due any payment of  principal or interest due on
            any other  obligation  for money  borrowed or the deferred  purchase
            price of goods or services; or

      (c)   Default under any Separate  Agreement or any other  document,  note,
            agreement,    mortgage,    security   agreement,    instrument,   or
            understanding with, held by, or executed in favor of Bank; or

      (d)   Should any representation or warranty contained herein or made by or
            furnished on behalf of Borrower in  connection  herewith be false or
            misleading in any material respect as of the date made; or

      (e)    Failure to perform or observe any covenant or  agreement  contained
             in Articles IV or V of this Agreement; or

      (f)   Failure to pay its debts generally as they become due; or

      (g)    Borrower's or any  guarantor's  making or taking any action to make
             an  assignment  for the benefit of  creditors,  or  petitioning  or
             taking any action to petition any tribunal for the appointment of a
             custodian,  receiver or any trustee for it or a substantial part of
             its assets,  or  commencing  or taking any action to  commence  any
             proceeding  under  any  bankruptcy,  reorganization,   arrangement,
             readjustment  of debt,  dissolution,  liquidation or debt or relief


                                       12                    __________ initials
<PAGE>

             law or statute of any  jurisdiction,  whether now or  hereafter  in
             effect, including,  without limitation,  any chapter of the federal
             Bankruptcy  Code;  or, if there shall have been filed or  commenced
             against Borrower or any Guarantor any such petition, application or
             proceeding  which is not  dismissed  within  30 days or in which an
             order  for  relief  is  entered;  or  should  Borrower  or any such
             Guarantor  by any  act or  omission  indicate  its  approval  of or
             acquiescence  in any such  petition,  application  or proceeding or
             order for relief or the appointment of a custodian, receiver or any
             trustee for it or any substantial part of any of its properties; or
             should  Borrower  or any such  guarantor  suffer  to exist any such
             custodianship, receivership or trusteeship; or

      (h)    Borrower's or any Guarantor's  concealing,  removing, or permitting
             to be concealed or removed,  any part of its property,  with intent
             to hinder, delay or defraud its creditors or any of them, or making
             or  suffering  a  transfer  of  any of its  property  which  may be
             fraudulent under any bankruptcy,  fraudulent  conveyance or similar
             law; or making any  transfer of its  property to or for the benefit
             of a creditor  at a time when other  creditors  similarly  situated
             have not been paid, or suffering or  permitting,  while  insolvent,
             any  creditor  to  obtain a lien upon any of its  property  through
             legal  proceedings or distraint which is not vacated within 30 days
             after the date thereof; or

      (i)   Occurrence of any of the  following  with respect to Borrower or any
            Guarantor: death (if an individual), death, withdrawal or removal of
            a general partner (if a  partnership),  death of a member or manager
            (if a  limited  liability  company),  dissolution  or  cessation  of
            business (if a general  partnership,  limited partnership or limited
            liability  partnership,  corporation,  limited  liability company or
            other organization), or insolvency; or

      (j)    If the  cancellation,  termination or limitation of any guaranty of
             Borrower's  obligations  under this  Agreement  or the Loans  shall
             occur, or if any such guarantor shall be in default under or breach
             the  terms  of any  guaranty  agreement  between  the Bank and such
             guarantor;  or  if  any  such  guarantor  should  die;  or  if  any
             subordination  agreement executed by any creditor of Borrower or of
             any  such  guarantor  in  favor of the  Bank  should  be  canceled,
             terminated,  or breached; or if any Guarantor's financial condition
             as represented in the last personal financial  statement  delivered
             to and received by Bank is substantially impaired; or

      (k)   If Borrower or any Guarantor is a  corporation  and the ownership or
            power to vote more than fifty  percent  (50%) of the voting stock of
            such corporation is transferred,  directly or indirectly  (including
            through any voting trust, irrevocable proxy or the like), during any
            twelve (12) month period; or

      (l)   If a final  judgment  for the  payment of money in excess of $10,000
            shall be rendered  against the  Borrower,  or in the case of the Big
            Blue  Litigation a final judgment for the payment of money in excess
            of reserves  carried on the books of Borrower for said purpose,  and
            the same shall  remain  undischarged  for a period of 30 days during
            which  execution  shall  not  be  effectively  stayed,  unless  such
            judgment is fully covered by collectible insurance; or

      (m)   If  Borrower  or any  Guarantor  shall  be  criminally  indicted  or
            convicted  under  any law that  could  lead to a  forfeiture  of any
            property of the  Borrower or such  Guarantor  or the  indictment  of
            either  Borrower or any  Guarantor  shall  impair  their  respective
            abilities to do business; or



                                      13                     __________ initials
<PAGE>

      (n)   Any material loss, theft, damage or destruction not fully covered by
            insurance  (as  required  by  this  Agreement  and  subject  to such
            deductibles as Bank shall have agreed to in writing), or sale, lease
            or  encumbrance  of any of the Collateral or the making of any levy,
            seizure, or attachment thereof or thereon except in all cases as may
            be specifically permitted by other provisions of this Agreement; or

      (o)    There  shall occur any  material  adverse  change in the  financial
             condition or business prospects of Borrower or any Guarantor; or

      (p)    If a creditor of Borrower  shall  obtain  possession  of any of the
             Collateral by any legal means; or

      (q)    Should their occur any breach,  default or "Event of Default" under
             or with  respect to that certain Loan  Agreement  between  American
             Micro Computer Center, Inc., a Florida corporation and Bank bearing
             even date herewith or any "Loan Document"  referenced  therein,  or
             should said agreement  terminate or cease to be in force and effect
             for any reason, including the repayment in full of the indebtedness
             referenced therein; or

      (r)    Should there occur any "Event of Default" under that Loan Agreement
             dated  October  28,  1999,  as  amended,   between  European  Micro
             Holdings,  Inc., a Nevada  corporation,  American  Micro  Computers
             Centers,  Inc., a Florida  corporation,  Nor'easter Micro,  Inc., a
             Nevada   corporation   and   SouthTrust   Bank,  or  any  "Security
             Instrument" as defined therein, and without limiting the generality
             of the foregoing,  should any financial  covenant therein contained
             be  breached,  or should  said  Loan  Agreement  terminate  for any
             reason,  including  the  repayment  in  full  of  the  indebtedness
             referenced therein; or

      (s)    Should  there  occur any breach or event of  default  under or with
             respect to the Guaranty Agreements or the Liquidity Agreement; or

      (t)   Should there occur any breach or default or "Event of Default" under
            or with respect to any other loan agreement, note, debt, instrument,
            agreement,  indebtedness, pledge, or other obligation or undertaking
            of (i) European Micro  Holdings,  Inc., a Nevada  corporation,  (ii)
            American Micro Computer Center, Inc., a Florida corporation or (iii)
            any Affiliate of either said entity, to Bank.

      SECTION 6.2. Upon the occurrence and  continuation of an Event of Default,
Bank may (i) terminate all obligations of Bank to Borrower,  including,  without
limitation,  all  obligations to lend money under this  Agreement,  (ii) declare
immediately due and payable,  without presentment,  demand, protest or any other
notice of any kind, all of which are hereby expressly  waived,  the Note and any
other note of Borrower held by Bank, including,  without limitation,  principal,
accrued  interest  and  costs  of  collection  (including,  without  limitation,
reasonable  attorneys'  fees, if collected by or through  attorney(s) who is/are
not salaried employee(s) of Bank in bankruptcy or in other judicial proceedings)
and (iii)  pursue any remedy  available  to it under this  Agreement,  under the
Note,  under any other note of Borrower  held by Bank, or available at law or in
equity.


<PAGE>


      SECTION 6.3. Upon and after the  occurrence of any Event of Default,  Bank
may, and is hereby authorized by Borrower, at any time and from time to time, to
the fullest extent  permitted by applicable  laws, and without advance notice to
Borrower (any such notice being expressly waived by Borrower), set-off and apply
any and all deposits (general or special, time or demand,  provisional or final)
at any time held and any other indebtedness at any time owing by Bank to, or for


                                      14                     __________ initials
<PAGE>

the  credit or the  account  of,  Borrower  against  any or all of the Loans and
Obligations  and other  liabilities and obligations of Borrower now or hereafter
existing  whether or not such  obligations  have  matured  and  irrespective  of
whether Bank has exercised any other rights that it has or may have with respect
to such Loans and Obligations and other liabilities and obligations,  including,
without limitation,  any acceleration rights. The aforesaid right of set-off may
be  exercised  by Bank  against  Borrower or against any trustee in  bankruptcy,
debtor in possession,  assignee for the benefit of the creditors,  receiver,  or
execution, judgment or attachment creditor of Borrower, notwithstanding the fact
that such right of set-off  shall not have been  exercised  by Bank prior to the
making,  filing or issuance,  or service upon Bank of, or of notice of, any such
petition;  assignment  for the benefit of creditors;  appointment or application
for the appointment of a receiver; or issuance of execution,  subpoena, order or
warrant.  Bank agrees to notify Borrower after any such set-off and application,
provided  that the failure to give such notice  shall not affect the validity of
such  set-off  and  application.  The rights of Bank under this  Section  are in
addition to the other rights and remedies (including,  without limitation, other
rights of setoff) which Bank may have.

                          ARTICLE  VII - DEFINITIONS

      SECTION 7.1. As used in this Agreement, the following terms shall have the
meanings set forth below:

      (a)   Accounting  terms used herein but not  specifically  defined  herein
            shall  have  the  meanings  normally  given  them by,  and  shall be
            calculated,  both as to  amounts  and  classification  of items,  in
            accordance with generally accepted accounting  principles applied in
            a consistent manner from period to period.

      (b)    "Account  Debtor"  means any Person who is or may become  obligated
             under or on account of an Account.

      (c)    "Accounts" means all accounts, accounts receivable,  chattel paper,
             chattel  mortgages,  leases,  instruments,   documents,  promissory
             notes, contracts for receipt of money, conditional sales contracts,
             and  evidences  of Debt of or  owing  to or  acquired  by  Borrower
             whether  now  existing or  hereafter  arising,  including,  without
             limitation,  (i) all  accounts and other rights to payment of money
             which arise or result from Borrower's  selling or other disposition
             of  Borrower's  goods or the providing of services by the Borrower,
             (ii) the proceeds of any  insurance  covering the  Collateral,  and
             (iii) the return of unearned insurance premiums.

      (d)   [reserved]


      (e)   "Affiliate"  shall mean any  director  or officer of Borrower or any
            Person who, directly, indirectly or beneficially, owns 5% or more of
            the capital stock of Borrower or any member of the immediate  family
            of any such officer, director or stockholder,  or any corporation or
            other entity which is controlled  by,  controls,  or is under common
            control  with  the  Borrower,  including,  without  limitation,  the
            Guarantors.

      (f)   "Agreement"  means  this  Revolving  Loan  Agreement,  as amended or
            supplemented in writing from time to time.



                                      15                     __________ initials
<PAGE>

      (g)   "Bank" means the banking  corporation  or  association  named in the
            first  sentence of this  Agreement and which executes this Agreement
            below as "Bank".

      (h)   "Borrower" means the person or entity named in the first sentence of
            this Agreement and who executes this Agreement  below as "Borrower,"
            for purposes of Section 3.11, 4.11, and 5.8, such term also includes
            any member of a  "controlled  group" (as  defined in ERISA) of which
            the named Borrower is a member.

      (i)   [reserved]

      (j)   "Capitalized  Lease  Obligations"  means  any  Debt  represented  by
            obligations  under a lease that is  required to be  capitalized  for
            financial reporting purposes in accordance with GAAP, and the amount
            of such Debt  shall be the  capitalized  amount of such  obligations
            determined in accordance with GAAP.

      (k)   "CERCLA" is defined in Section 3.12.

      (l)   "Collateral" is defined in Section 2.1.

      (m)   "Commitment Period means the period from the date of initial funding
            hereunder  until the  earlier to occur of the  Maturity  Date or the
            occurrence of an Event of Default.

      (n)   "Debt" means the sum of (i)  indebtedness  for borrowed money or for
            the  deferred   purchase   price  of  property  or  services,   (ii)
            Capitalized  Lease  Obligations,  (iii)  all  other  items  which in
            accordance  with  GAAP  would  be  included  in  determining   total
            liabilities  as shown on a balance  sheet of a person as at the date
            as of which Debt is to be determined.

      (o)   "Eligible  Accounts"  shall  include  only  Accounts  arising in the
            ordinary  course of  Borrower's  business  from the sale of goods or
            rendition of services which Bank, in its sole credit judgment, deems
            to be an Eligible Account.  Examples of Accounts which are not under
            any  circumstance  deemed to be  Eligible  Accounts  by Bank are set
            forth on Exhibit "A" hereto.

      (p)    "Eligible  Inventory"  shall mean Inventory valued at the lesser of
             cost or current  market  value,  all of which  Inventory is, at any
             given time,  (a) not damaged or  defective in any way; (b) not sold
             or segregated for sale and reflected as an Account of Borrower; (c)
             not consigned Inventory; (d) not inventory-in-transit or located in
             a place other than at the locations listed in Section 3.17; (e) not
             work-in-process Inventory; (f) not constituting packaging materials
             and supplies;  (g) not Inventory evidenced by negotiable  warehouse
             receipts or by  non-negotiable  warehouse  receipts or documents of
             title  which  have not  been  issued  in the name of Bank;  (h) not
             subject to a document of title such as a warehouse  receipt or bill
             of lading;  and (i) not Inventory deemed  ineligible by Bank in its
             sole discretion.

      (q)   "ERISA" is defined in Section 3.11.

      (r)   "Event of Default" is defined in Section 6.1.

      (s)   [reserved]



                                      16                     __________ initials
<PAGE>

      (t)   "Governing State" shall mean the State of Alabama.

      (u)   "Guarantor"  means any person or entity who endorses the Note or who
            now or hereafter  guarantees  payment or collection of the Revolving
            Loan in whole or in part.

      (v)   "Inventory"  shall mean all  inventory of whatever kind or nature of
            Borrower,  now owned or hereafter acquired by Borrower, and wherever
            located,  including,  without limitation, all goods held for sale or
            lease or furnished or to be furnished under  contracts,  and any raw
            materials,  goods in  transit,  work in process or  finished  goods,
            supplies, returned or repossessed goods, together with all goods and
            materials used or consumed in Borrower's business

      (w)    "Loan Documents" shall mean this Agreement,  the Note, the Security
             Agreement,  each  Separate  Agreement,  the guaranty  agreements of
             guarantors,  and each and every mortgage, deed of trust, guarantee,
             reimbursement agreement,  credit agreement,  loan agreement,  note,
             security   agreement,   financing  statement  or  other  instrument
             executed  and   delivered  to  evidence  the  Loans  or  any  other
             Obligation,  to  constitute  collateral  for the Loans or any other
             Obligation,  or to  evidence  security  for the  Loans or any other
             Obligation,  and any and all  other  agreements,  instruments,  and
             documents  heretofore,  now or hereafter,  executed by Borrower and
             delivered to Bank in respect to the  transactions  contemplated  by
             this Agreement.

      (x)   "Maturity Date" is defined in Section 1.1.

      (y)   "Note" is defined in Section 1.1 and includes any promissory note or
            notes given in extension or renewal of, or in substitution  for, the
            original Note.

      (z)    "Obligation(s)"  shall  mean the  "Obligations"  as  defined in the
             Security Agreement, together with all loans and all other advances,
             debts,  liabilities,   obligations,  covenants  and  duties  owing,
             arising,  due or  payable  from  Borrower  to Bank  of any  kind or
             nature,  present or future,  whether or not  evidenced by any note,
             guaranty or other instrument,  whether arising under this Agreement
             or any of the other Loan Documents or otherwise,  whether direct or
             indirect  (including  those  acquired by  assignment),  absolute or
             contingent,  primary  or  secondary,  due  or to  become  due,  now
             existing or  hereafter  arising and however  evidenced or acquired.
             The term  includes,  without  limitation,  all  interest,  charges,
             expenses,  fees,  attorneys'  fees and any other sums chargeable to
             Borrower under any of the Loan Documents and all rights Bank may at
             any time or times  have to  reimbursement  in  connection  with any
             letter of credit or guaranty issued for Borrower's benefit.

      (aa)  "Person" means an individual, partnership,  corporation, joint stock
            company,   firm,  land  trust,  business  trust,  limited  liability
            company, limited liability partnership, unincorporated organization,
            or other  business  entity,  or a government  or agency or political
            subdivision thereof.

      (bb)  "Revolving Loan" is defined in Section 1.1.

      (cc)  "Separate Agreement" is defined in Section 2.1.

      (dd)  "Subordinated  Debt" means the Debt of the  Borrower  which is fully
            subordinated to the Loan (including principal,  interest, and agreed
            charges) in a manner  satisfactory  to the Bank (which may be either


                                      17                     __________ initials
<PAGE>

            according  to its terms or by  separate  agreement)  and which  Debt
            arises from the  Borrower's  actual receipt of cash and not from "in
            kind" or non cash consideration.

      (ee)  "Subsidiary"  means any corporate  entity or  partnership,  or other
            business  entity,  controlling  interest  of  which  is owned by the
            Borrower.

      (ff)  [reserved]


                         ARTICLE VIII - MISCELLANEOUS

      SECTION  8.1.  No delay or failure on the part of Bank in the  exercise of
any right,  power or privilege  granted  under this  Agreement  or the Note,  or
available at law or in equity,  shall impair any such right,  power or privilege
or be construed as a waiver of any Event of Default or any acquiescence therein.
No single or  partial  exercise  of any such  right,  power or  privilege  shall
preclude the further exercise of such right, power or privilege. No waiver shall
be valid  against Bank unless made in writing and signed by Bank,  and then only
to the extent expressly specified therein.

      SECTION  8.2.  All  notices or  consents  required  or  permitted  by this
Agreement shall be in writing and shall be deemed to have been given or made (i)
when actually received, if delivered by hand or sent by facsimile or telegraphic
transmission,  or (ii) upon the  earlier of the actual  receipt or five (5) days
after  mailing,  if sent by certified or  registered  mail,  postage or prepaid,
return receipt  requested,  and addressed to Borrower or to Bank as the case may
be at the addresses listed on the first page of this Agreement.  Either Borrower
or Bank, or both, may change its address or facsimile number for notice purposes
by notice to the other party in the manner provided herein.

      SECTION  8.3.  This  Agreement  and the  Note  shall  be  governed  by and
construed and enforced in accordance with the substantive  laws of the Governing
State, without regard to that state's rules governing conflicts of law. Borrower
consents to the nonexclusive  jurisdiction of any court of original jurisdiction
located in the Governing State,  and, to the extent permitted by applicable law,
waives any objection  based on venue or forum non conveniens with respect to any
action  instituted in any such court.  Borrower  agrees that process in any such
action  will be  sufficient  if served on  Borrower by  certified  mail,  return
receipt requested,  or in any other manner provided by law.  Notwithstanding the
foregoing,  Bank shall have the right to bring any action or proceeding  against
Borrower,  or  against  the  property  of  Borrower,  in the courts of any other
jurisdiction  Bank  deems  necessary  or  appropriate  in order to  enforce  the
obligations  of Borrower  under this  Agreement,  and the Note, and any Separate
Agreements.

      SECTION  8.4.  All  representations  and  warranties   contained  in  this
Agreement  or made or  furnished  on behalf of Borrower in  connection  herewith
shall survive the execution and delivery of this  Agreement and the Note,  shall
be  deemed  to be made  anew  each time  Borrower  requests  a loan  under  this
Agreement,  and shall survive until the Revolving Loan and all interest  thereon
are paid in full.

      SECTION  8.5.  This  Agreement  shall  bind and  inure to the  benefit  of
Borrower  and Bank,  and their  respective  successors  and  assigns;  provided,
however,  Borrower  shall  have no right to assign  its  rights  or  obligations
hereunder to any person or entity.

      SECTION  8.6.  Time is of the essence in the payment  and  performance  of
every term and covenant of this Agreement and the Note.




                                      18                     __________ initials
<PAGE>

      SECTION 8.7. This  Agreement may be amended or modified,  and Borrower may
take any action herein prohibited,  or omit to perform any action required to be
performed by it, only if Borrower shall obtain the prior written consent of Bank
to such  amendment,  modification,  action or omission to act,  and no course of
dealing between Borrower and Bank shall operate as a waiver of any right,  power
or  privilege  granted  under  this  Agreement,  under the Note or the course of
dealing between Borrower and Bank shall operate as a waiver of any right,  power
or  privilege  granted  under  this  Agreement,  under the Note or the  Separate
Agreements,  or available at law or in equity. This Agreement, the Note, and the
Separate  Agreements  contain the entire  agreement  between  Borrower  and Bank
regarding the Revolving  Loan and the  Collateral.  No oral  representations  or
statements  shall be binding on Bank,  and no agent of Bank has the authority to
vary the terms of this  Agreement  except in writing on the face  hereof or on a
separate page attached hereto.

      SECTION 8.8. All rights,  powers and privileges granted hereunder shall be
cumulative,  and  shall  not  be  exclusive  of any  other  rights,  powers  and
privileges granted by the Note or any other document or agreement,  or available
at law or in equity.

      SECTION 8.9. Upon the occurrence and during the  continuation  of an Event
of Default, Borrower recognizes Bank's right, without notice or demand, to apply
any  indebtedness  due or to become due to Borrower from Bank in satisfaction of
any of the  indebtedness,  liabilities  or  obligations  of Borrower  under this
Agreement,  under the Note,  or under any  other  note,  instrument,  agreement,
document or writing of Borrower held by or executed in favor of Bank, including,
without limitation, the right to set off against any deposits or cash collateral
of Borrower  held by Bank.  In addition  to the right of setoff,  as  additional
collateral for the Revolving  Loan,  Borrower hereby grants to Bank a continuing
lien on and  security  interest  in all  deposit  accounts  of  Borrower  now or
hereafter held by Bank,  including all  certificates of deposit now or hereafter
issued to Borrower by Bank.

      SECTION 8.10.  Borrower  hereby agrees to indemnify Bank and its officers,
directors,  agents and  attorneys  against,  and to hold Bank and all such other
persons harmless from, any claims,  demands,  liabilities,  costs,  damages, and
judgments  (including,  without limitation,  liability under CERCLA, the Federal
Resource   Conservation  and  Recovery  Act,  or  other   environmental  law  or
regulation,  and costs of defense and attorneys' fees) resulting from Borrower's
breach of any of the covenants set forth in Articles IV or V of this  Agreement.
In addition, Borrower will indemnify and hold Bank harmless from and against any
liability,  claim,  cost or expense incurred by Bank or imposed against Bank for
any stamp  tax,  intangible  tax,  or other  tax,  fee or charge  imposed by any
governmental  entity  arising out of or relating to the  Note(s),  the  Security
Agreement,  or this  Agreement or the  transactions  anticipated  herein.  These
agreements of indemnity shall be continuing agreements and shall survive payment
of the Revolving Loan and the Note and termination of this Agreement.

      SECTION 8.11.  The  provisions of this  Agreement are  independent  of and
separable from each other,  and no such provision  shall be affected or rendered
invalid  or  unenforceable  by virtue of the fact that for any  reason any other
such  provision  shall be invalid or  unenforceable  in whole or in part. If any
provision of this Agreement is prohibited or unenforceable in any  jurisdiction,
such provision shall be ineffective in such  jurisdiction  only to the extent of
such prohibition or  unenforceability,  and such prohibition or unenforceability
shall not  invalidate  the  balance  of such  provision  to the extent it is not
prohibited  or  unenforceable  nor  render  prohibited  or  unenforceable   such
provision in any other jurisdiction.

      SECTION  8.12. A photocopy of this  agreement  may be filed as a financing
statement in any public office.



                                      19                     __________ initials
<PAGE>

      SECTION 8.13.  All  obligations  of each Person named as Borrower shall be
joint and several obligations of all such Persons.

      SECTION 8.14. To the fullest extent permitted by applicable law,  Borrower
waives (i) presentment,  demand and protest and notice of presentment,  protest,
default,  nonpayment,  maturity, release, compromise,  settlement,  extension or
renewal of any or all commercial paper,  accounts,  contract rights,  documents,
instruments,  chattel  paper  and  guaranties  at any time held by Bank on which
Borrower may in any way be liable; (ii) notice prior to Bank's taking possession
or control  of any of the  Collateral  or any bond or  security  which  might be
required by any court prior to allowing Bank to exercise any of Bank's remedies,
including the issuance of an immediate writ of possession;  (iii) the benefit of
all valuation, appraisement and exemption laws; (iv) any right Borrower may have
upon  payment  in full of the  Obligations  to  require  Bank to  terminate  its
security  interest  in the  Collateral  until the  execution  by  Borrower of an
agreement indemnifying Bank from any loss or damage Bank may incur as the result
of dishonored checks or other items of payment received by Bank from Borrower or
any  Account  Debtor and  applied to the  Obligations;  and (v) notice of Bank's
acceptance hereof or of any Separate Agreement.

      SECTION 8.15. Borrower hereby irrevocably designates,  makes,  constitutes
and appoints Bank (and all Persons  designated  by Bank) as Borrower's  true and
lawful  attorney (and  agent-in-fact)  and Bank, or Bank's agent,  may,  without
notice to Borrower and in either  Borrower's or Bank's name, but at the cost and
expense of Borrower:

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

            8.15.2.  At such  time or  times  as Bank or its  agent  in its sole
discretion  may  determine  (and  irrespective  of  whether  an Event of Default
exists):  (i) demand payment of the Accounts from the Account  Debtors,  enforce
payment  of the  Accounts  by legal  proceedings  or  otherwise,  and  generally
exercise all of Borrower's rights and remedies with respect to the collection of
the Accounts; (ii) settle, adjust,  compromise,  discharge or release any of the
Accounts or other Collateral; (iii) sell or collect any of the Accounts or other
Collateral  upon such terms,  and for such  amounts and at such time or times as
Bank  deems  advisable;  (iv) take  possession,  in any  manner,  of any item of
payment  or  proceeds  relating  to any  Collateral  and  apply  the same to the
Obligations;  (v) prepare,  file and sign Borrower's name to a proof of claim in
bankruptcy or similar  document  against any Account  Debtor or to any notice of
lien,  assignment or satisfaction of lien or similar document in connection with
any of the Collateral; (vi) during such time as a lock box arrangement may be in
effect, if any, receive,  open and dispose of all mail addressed to Borrower and
to notify postal  authorities to change the address for delivery thereof to such
address as Bank may  designate;  (vii)  endorse the name of Borrower upon any of
the items of payment or proceeds relating to any Collateral and deposit the same
to the account of Bank or any other bank on account of the  Obligations;  (viii)
endorse  the name of  Borrower  upon any chattel  paper,  document,  instrument,
invoice,  freight bill, bill of lading or similar document or agreement relating
to the  Accounts,  Inventory  and any  other  Collateral;  (ix)  use  Borrower's
stationery  and sign the name of Borrower to  verifications  of the Accounts and
notices  thereof to Account  Debtors;  (x) use the  information  recorded  on or
contained in any data  processing  equipment and computer  hardware and software
relating  to the  Accounts,  Inventory,  and any other  Collateral  and to which
Borrower has access;  (xi) make and adjust  claims under  policies of insurance;
and (xii) for and in the name of  Borrower to give  instructions  and direct any
bank or financial  institution in which proceeds of the Collateral are deposited
to turn over said  proceeds  to Bank;  and  (xiii) do all other  acts and things


                                      20                     __________ initials
<PAGE>

necessary, in Bank's determination, to fulfill Borrower's obligations under this
Agreement.

      SECTION  8.16.  Borrower  will at all times  keep  accurate  and  complete
records of the  Collateral,  and the Bank or its agents  shall have the right to
call at Borrower's  place or places of business at intervals to be determined by
Bank, upon reasonable notice and during  Borrower's  regular business hours, and
without  hindrance  or delay,  to inspect  and  examine  the  Inventory  and the
Equipment  and to inspect,  audit,  check,  and make  abstracts  from the books,
records,  journals,  orders,  receipts,  computer printouts,  correspondence and
other data relating to the Collateral or to any other  transactions  between the
parties  hereto.  If  requested  by Bank,  Borrower  agrees  to make its  books,
records, journals,  orders, receipts,  computer printouts,  correspondence,  and
other data  relating to the  Collateral  available at the Bank's main office for
inspection, audit and checking by the Bank or its agents.

      SECTION 8.17.  Regardless of any provision  contained in this Agreement or
any of the Separate  Agreements,  in no event shall the aggregate of all amounts
that are  contracted  for,  charged or  collected  pursuant to the terms of this
Agreement,  the Note or any of the  Separate  Agreements,  and  that are  deemed
interest  under  applicable  law,  exceed the Maximum Rate. No provision of this
Agreement  or in any of the Separate  Agreements  or the exercise by Bank of any
right hereunder or under any Separate Agreement or the prepayment by Borrower of
any of the  Obligations or the occurrence of any contingency  whatsoever,  shall
entitle Bank to charge or receive,  or to require  Borrower to pay,  interest or
any amounts  deemed  interest by applicable  law (such amounts being referred to
herein  collectively  as  "Interest")  in excess of the  Maximum  Rate,  and all
provisions  hereof or in any  Separate  Agreement  which may  purport to require
Borrower to pay Interest  exceeding  the Maximum  Rate shall be without  binding
force or effect to the extent only of the excess of Interest  over such  Maximum
Rate. Any Interest charged or received in excess of the Maximum Rate ("Excess"),
shall be  conclusively  presumed to be the result of an  accident  and bona fide
error, and shall, to the extent received by Bank, at the option of Bank,  either
be applied to reduce the  principal  amount of the  Obligations  or  returned to
Borrower.  The right to accelerate the maturity of any of the  Obligations  does
not include the right to  accelerate  unaccrued  interest,  and no such interest
will be collected by Bank. All monies paid to Bank hereunder or under any of the
Separate  Agreements shall be subject to any rebate of unearned  interest as and
to the extent  required by applicable  law. By the execution of this  Agreement,
Borrower  covenants that (i) the credit or return of any Excess shall constitute
the  acceptance by Borrower of such Excess,  and (ii) Borrower shall not seek or
pursue any other remedy, legal or equitable,  against Bank, based in whole or in
part upon contracting  for,  charging or receiving any Interest in excess of the
Maximum Rate. For the purpose of determining  whether or not any Excess has been
contracted for, charged or received by Bank, all interest at any time contracted
for,  charged or received from Borrower in connection with this Agreement shall,
to the extent permitted by applicable law, be amortized, prorated, allocated and
spread in equal parts throughout the full term of the Obligations.  Borrower and
Bank  shall,  to  the  maximum  extent   permitted  under  applicable  law,  (i)
characterize any non-principal payment as an expense, fee or premium rather than
as Interest and (ii) exclude voluntary  prepayments and the effects thereof. The
provisions of this Section shall be deemed to be incorporated  into the Note and
each  Separate  Agreement  (whether  or not any  provision  of this  Section  is
referred to therein).  "Maximum Rate" shall be the maximum  non-usurious rate of
interest permitted by applicable law that any time, or from time to time, may be
contracted for, taken, reserved, charged or received on the Debt in question or,
to the extent  permitted by applicable  law, under such applicable laws that may
hereafter be in effect and which allow a higher  maximum  non-usurious  interest
rate than applicable laws now allow. Notwithstanding any other provision hereof,
the Maximum Rate shall be  calculated  on a daily basis  (computed on the actual
number of days elapsed over a year of 365 or 366 days, as the case may be).




                                      21                     __________ initials
<PAGE>

      SECTION 8.18.  WAIVER OF RIGHT TO TRIAL BY JURY.  BORROWER AND BANK HEREBY
WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY  CLAIM,  COUNTERCLAIM,  SETOFF,  DEMAND,
ACTION  OR  CAUSE OF  ACTION  (A)  ARISING  OUT OF OR IN ANY WAY  PERTAINING  OR
RELATING  TO THIS  AGREEMENT,  THE  NOTES,  THE  LOAN  DOCUMENTS,  OR ANY  OTHER
INSTRUMENT,  DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS
AGREEMENT  OR (B) IN ANY WAY  CONNECTED  WITH OR  PERTAINING  OR  RELATED  TO OR
INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT,
THE NOTES, THE LOAN DOCUMENTS,  OR ANY OTHER  INSTRUMENT,  DOCUMENT OR AGREEMENT
EXECUTED  OR  DELIVERED  IN  CONNECTION  HEREWITH  OR  IN  CONNECTION  WITH  THE
TRANSACTIONS  RELATED THERETO OR CONTEMPLATED  THEREBY OR THE EXERCISE OF EITHER
PARTY'S RIGHTS AND REMEDIES  THEREUNDER,  IN ALL OF THE FOREGOING  CASES WHETHER
NOW EXISTING OR HEREAFTER  ARISING,  AND WHETHER  SOUNDING IN CONTRACT,  TORT OR
OTHERWISE.  BORROWER  AND BANK AGREE THAT EITHER OR BOTH OF THEM MAY FILE A COPY
OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN  EVIDENCE OF THE KNOWING,  VOLUNTARY
AND BARGAINED  AGREEMENT BETWEEN THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY,
AND THAT ANY DISPUTE OR  CONTROVERSY  WHATSOEVER  BETWEEN THEM SHALL  INSTEAD BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

      SECTION 8.19. This Agreement and the credit  facilities  described  herein
are  intended  to  be  an  amendment  and  restatement  of  Borrower's  existing
indebtedness  to Bank.  This  Agreement  is not  intended to be, nor shall it be
construed  to  create,  a  novation  or accord and  satisfaction  of  Borrower's
indebtedness to Bank.

      WITNESS  the hand of the  parties  hereto on or as of the date first above
written.

                                    BORROWER:

                                    NOR'EASTER MICRO, INC., a Nevada corporation



                                    By:
                                        --------------------------------------
                                    Title:
                                           -----------------------------------

Attest:
            ------------------------
Title:
            ------------------------

      [CORPORATE SEAL]


                                    BANK:

                                    SOUTHTRUST BANK

                                    By:
                                        --------------------------------------
                                    Its:
                                         -------------------------------------






                                      22                     __________ initials
<PAGE>

                                   EXHIBIT "A"

             EXAMPLES OF ACCOUNTS DISQUALIFIED AS ELIGIBLE ACCOUNTS

Examples of Accounts which are not under any circumstance deemed to be Eligible
Accounts by Bank include the following:

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

      (ii)   it is unpaid  for the lesser of (i) more than sixty (60) days after
             the original due date shown on the invoice or (ii) more than ninety
             (90) days after the original invoice date; or

      (iii)  fifty percent (50%) or more of the Accounts from the Account Debtor
             are not deemed Eligible Accounts hereunder; or

      (iv)   the total unpaid Accounts of the Account Debtor exceed  twenty-five
             percent (25%) of the net amount of all  Accounts,  to the extent of
             such excess; or

      (v)    any  covenant,   representation  or  warranty   contained  in  this
             Agreement with respect to such Account has been breached; or

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

      (vii)  the Account Debtor has commenced a voluntary case under the federal
             bankruptcy laws, as now constituted or hereafter  amended,  or made
             an assignment  for the benefit of  creditors,  or a decree or order
             for relief under the federal bankruptcy laws has been filed against
             the Account Debtor, or if the Account Debtor has failed,  suspended
             business,  ceased to be  solvent,  or  consented  to or  suffered a
             receiver, trustee, liquidator or custodian to be appointed of it or
             for all or a significant portion of its assets or affairs; or

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

      (ix)   Bank  believes,  in its  sole  judgment,  that  collection  of such
             Account is insecure or that payment  thereof is doubtful or will be
             delayed by reason of the Account Debtor's financial condition; or

      (x)    the  Account  Debtor  is  the  United  States  of  America  or  any
             department,  agency or  instrumentality  thereof,  unless  Borrower
             assigns its right to payment of such  Account to Bank,  in form and
             substance satisfactory to Bank, so as to comply with the Assignment
             of Claims Act of 1940, as amended; or



                                 Exhibit "A" - 1             __________ initials
<PAGE>

      (xi)   the Account is subject to a lien; or

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

      (xiii) the total  unpaid  Accounts of the Account  Debtor  exceed a credit
             limit  determined  by Bank, in its sole  discretion,  to the extent
             such Account exceeds such limit; or

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

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

      (xvi)  Borrower  has made an agreement  with the Account  Debtor to extend
             the time of payment thereof; or

      (xvii) the  Account  arises from a retail sale of goods to a Person who is
             purchasing  same  primarily  for  personal,   family  or  household
             purposes; or

      (xviii) the Account Debtor is not a resident  citizen of the United States
             or a corporate entity or partnership  formed and existing under the
             laws of the United States or a political subdivision thereof or the
             Account  arises from a sale to an Account Debtor outside the United
             States  or it  arises  out of a  shipment  of  Inventory,  goods or
             products to an address other than an address in the United  States,
             unless in each case the Account is covered by credit insurance or a
             letter of credit  acceptable  to Bank in the  exercise  of its sole
             discretion; or

      (xix)  the Account is deemed  ineligible  by the Bank in its sole judgment
             and discretion.

      In addition,  Eligible Account shall not include any portion of an Account
      which consists of service charges, late charges or penalties,  interest of
      Account  Debtors,  or other charges relating to the extension of credit by
      the Borrower or the timing of payment by Account Debtor.

      In determining the aggregate amount of Eligible  Accounts,  there shall be
      excluded from  consideration any credit balance of an Account Debtor which
      is more than 90 days old as measured from the date of original  posting of
      said credit balance to Borrower's books and records.




                                 Exhibit "A" - 2             __________ initials


<PAGE>



                                  EXHIBIT "B"

                            COMPLIANCE CERTIFICATE

SouthTrust Bank
Post Office Box 2554
Birmingham, Alabama 35290
Attn: Asset-Based Lending Department

      In  accordance  with the  requirements  of that  certain Loan and Security
Agreement    ("Loan    Agreement")    dated    ___________,     2000,    between
_____________________________  ("Borrower") and SouthTrust Bank, the undersigned
officer(s) of ("Borrower"), based upon my (our) review of the balance sheets and
statements  of income of the  Borrower  for the (month,  quarter,  fiscal  year)
ending _____________, ______, DO HEREBY CERTIFY THAT:

      (1) We are in  compliance  with all  financial  covenants set forth in the
Loan Agreement.

      (2) To the  best of my  (our)  knowledge,  Borrower  has  kept,  observed,
performed,  and  fulfilled  each and  every  undertaking  contained  in the Loan
Agreement and is not at this time in default in the observance or performance of
any terms or conditions  of the Loan  Agreement,  on the date hereof,  except as
follows:
        ----------------------------------------------------.
                                      (if none, so state)

      (3) And, no Event of Default has occurred and is continuing that, with the
giving of notice or the  passage of time or both,  would be an Event of Default,
on the date hereof, except as follows:

----------------------------------------------------------------------.
                        (if none, so state)

Without limiting the generality of the foregoing,  Borrower is solvent as of the
date hereof.

I (we) further certify to you that:

      No material adverse change has occurred in either the financial  condition
or the business of the Borrower  since the date of the Loan  Agreement  and that
all  representations and warranties set forth within the Loan Agreement are true
as of the date hereof.

      During the period  noted  above,  Borrower  has not changed its name,  its
place of business,  principal executive officers,  nor has it become a surviving
corporation  in a merger,  nor has it changed the places where the Collateral is
located.

      Executed this ____ day of _______________, 20____.





                                 Exhibit "B" - 1             __________ initials

<PAGE>


                                    Signed:
                                                ------------------------------
                                    Print Name:
                                                ------------------------------
                                    Print Title:
                                                ------------------------------


                                    Signed:
                                                ------------------------------
                                    Print Name:
                                                ------------------------------
                                    Print Title:
                                                ------------------------------


                                    ON BEHALF OF:


                                    ------------------------------------------

                                    ("Borrower")


















                                 Exhibit "B" - 2             __________ initials